Sindh Chief Minister Murad Ali Shah, who holds the additional charge of the finance portfolio, on Wednesday presented the provincial budget for the financial year 2026-27 with a total outlay of Rs. 3.56 trillion.
In his budget speech, Shah expressed gratitude for presenting Sindh’s budget for the 12th time, adding no new taxes had been imposed on the public. He said the Sindh government was proposing a 7% increase to the salaries and pensions of government employees.
This appears a marked departure from the Pakistan Peoples Party’s histrionics in the National Assembly, where MNA Abdul Qadir Patel criticized the federal government for proposing the same in its budget.
According to Shah, the province was increasing the minimum wage from Rs. 40,000/month to Rs. 43,000/month. He said the province would establish a Sindh International Financial Center in Karachi to serve as a platform for infrastructure finance, Islamic finance, and climate finance. He also said the budget strategy was guided by four principles: safeguarding the province’s constitutional rights, maintaining fiscal sustainability, contributing to national stability and continuing investment in public welfare.
He said the budget estimated receipts of Rs. 3.41 trillion and projected a deficit of Rs. 242 billion, a potentially problematic position in light of International Monetary Fund (IMF) requirements.
The chief minister said the government had allocated Rs. 400 billion for development, and Rs. 13.2 billion for a social protection package. He explained the development portfolio had been decreased from an estimated Rs. 575 billion to Rs. 400 billion after contributing for national strategic requirements under a negotiated arrangement with the federal government.
Shah said the Annual Development Program for fiscal year 2026-27 allocates Rs. 25.9 billion for education; Rs. 17.4 billion for health; Rs. 121.6 billion for local government and municipal infrastructure; Rs. 40.9 billion for public health engineering; Rs. 30.9 billion for irrigation; Rs. 39.5 billion for transport and communications and Rs. 6.3 billion for agriculture and livestock.
Detailing proposed “relief” measures the upcoming fiscal year, the chief minister announced a reduction in sales tax on education support services to 5%; continuation of concessional tax rates for overseas employment recruiting agencies and beauty salons integrated with point-of-sale systems; and reductions in tax applicable to insurance agents and brokers. The government also proposed increasing the exemption threshold for agricultural super tax from Rs. 150 million to Rs. 500 million, and reducing the applicable rate from 10% to 8%.
Shah said the government was allocating a Rs. 13.2 billion social protection package comprising the Kitchen Garden Initiative, Benazir Hari Card Program, Benazir Women Agriculture Workers Program and support schemes for widows and orphans. He further announced the Sindh Green Data Infrastructure Initiative, recognizing the growing global demand for artificial intelligence, cloud computing and digital infrastructure.
Under a household renewable energy program, 275,000 free solar home systems, procured at a cost of Rs18 billion, would be distributed among low-income households. The Sindh Enterprise Development Fund and Sindh Bank are also launching a subsidized solar financing program to enable middle-income families to install rooftop solar systems.
The provincial government also announced plans to launch an Integrated Waste-to-Value and Circular Economy Program under the PPP framework.
Karachi allocations
According to Shah, the Sindh government has accorded special priority to Karachi’s development in the FY27 budget, including the Greater Karachi Sewerage Plan (S-III), the Lyari Transformation Package, traffic corridor improvements, road rehabilitation schemes and modernization of fire brigade services.
He said the overall development portfolio for Karachi consists of 816 schemes with an overall estimated cost of Rs. 644.3 billion. Of this, Rs. 100.19 billion has been earmarked for Karachi-based projects, while overall allocations for 822 schemes, including city-wide initiatives, amount to Rs. 108.1 billion. He claimed 167 ongoing projects costing more than Rs. 500 million each and 110 mega projects valued at over Rs. 1 billion were currently under implementation across the metropolis.
The budget includes Rs. 1.2 billion flyover from Airport Road to Star Gate; Rs. 1.5 billion right-turn underpass from Malir Halt to Shahrah-e-Faisal; and Rs. 1.65 billion flyover at the Sir Shah Suleman Road crossing over Gujjar Nullah. Funds have also been allocated for the Shahrah-e-Bhutto-Korangi Causeway junction; the Azeempura Intersection Flyover project; new interchanges linked with the Malir Expressway; and underpasses on Khayaban-e-Ittehad and Khayaban-e-Shahbaz.
To improve urban drainage and flood resilience, the government has allocated funds for the third phase of rehabilitation of major stormwater drains, restoration of Gujjar Nullah and its service roads, and the M-9 to Thaddo Nullah stormwater drainage project.
Allocations have been made for expansion of the K-IV water supply system, upgrading water pumping stations in Karachi East and Central districts, rehabilitation of the city’s trunk main network to reduce leakages, and construction of a new water supply line along the Lyari Expressway. Funding has also been earmarked for the Karachi Water and Sewerage Services Improvement Project Phase-II and the Greater Karachi Sewerage Plan (S-III).
Additionally, the province has allocated Rs. 13.2 billion for the Red Line Bus Rapid Transit project and over Rs. 3.5 billion for the Yellow Line BRT corridor.
The allocations include Rs. 1 billion for the Sindh Infectious Diseases Hospital and Rs. 1.4 billion for the Pediatric Cardiology Unit at NICVD Karachi. Additionally, funds have been set aside for a new medical college, the Bilawal Bhutto Engineering College in Lyari, the Shaheed Zulfikar Ali Bhutto Law University, the Karachi Education Complex, and development projects at major public-sector universities including the University of Karachi and Jinnah Sindh Medical University.
The budget also aims to establish a Provincial Civil Services Academy for Rs. 1 billion, a new Sindh Revenue Board training academy and office complex, and improvement of commercial centers and markets across the city.
Opposition lawmakers protested against the budget during its presentation, questioning why they were not consulted at any stage.