KARACHI – Sindh Chief Minister Syed Murad Ali Shah today unveiled the provincial budget for the fiscal year 2026-27, a substantial financial outlay totaling Rs3.56 trillion. The budget brings positive news for the populace, promising no new taxes and a notable 7 percent increase in salaries and pensions for government employees, alongside a substantial raise in the minimum wage.

Budget Highlights: Fiscal Relief and Public Welfare

In a move aimed at easing the financial burden on citizens, Chief Minister Murad Ali Shah confirmed during his assembly address that the Sindh government would not impose any new taxes in the upcoming fiscal year. This commitment to tax relief is coupled with significant welfare measures, most notably a 7 percent raise in salaries and pensions for all provincial government employees, offering much-needed support.

Further enhancing worker welfare, the provincial administration has increased the minimum wage to Rs43,000. To ensure equity, the pay scale for Grade 1 government employees will be aligned with this revised minimum wage. Additionally, targeted tax adjustments include:

• Reduction in sales tax on education support services to 5 percent.
• A decrease in the tax rate for insurance agents and brokers from 5 percent to a more favorable range of 2-3 percent.

Strategic Investment for Development and Growth

The budget outlines an ambitious agenda for provincial progress, allocating a significant Rs720.39 billion for development initiatives. CM Shah emphasized that this budget is “a carefully prioritised investment strategy designed to protect human development, strengthen infrastructure, improve connectivity, enhance water security, promote economic growth and create opportunities for future generations.”

Key Sectoral Allocations to Drive Progress

Investments are strategically distributed across critical sectors to foster comprehensive development:

• Health Sector: A substantial Rs402 billion has been earmarked to enhance healthcare infrastructure and services across Sindh.
• Local Government & Service Delivery: Receiving Rs347.6 billion, this allocation aims to empower local bodies and improve essential public services.
• Law & Order: The government’s commitment to security is reflected in an allocation of Rs222 billion for maintaining peace and stability.
• Transport & Communication: To bolster connectivity and infrastructure, Rs185 billion has been allocated.
• Irrigation: Vital for the province’s agrarian economy, this sector will receive Rs103 billion.
• Energy, Climate & Environment: An allocation of Rs84 billion highlights the growing focus on sustainable energy solutions and environmental protection.
• Agriculture, Livestock & Fisheries: Supporting rural economies and food security, this sector is allocated Rs72.8 billion.
• Sanitation: To address critical public health needs, Rs49 billion has been designated for sanitation projects.

Protected Funds for Social Protection and Vulnerable Groups

The budget also demonstrates a strong commitment to social welfare, with several allocations designated as “protected” to ensure funds reach the most vulnerable segments of society:

• For People with Disabilities, a dedicated Rs22.8 billion has been set aside.
• The Minorities and Women Development sector will receive Rs3.5 billion to promote equity and empowerment.
• The broader Social Protection Sector is further supported with a proposed Rs26.4 billion.

Fiscal Outlook: Revenue Projections and Funding Sources

The financial framework for the upcoming year projects total tax receipts, including sales tax, at Rs690 billion. Provincial non-tax receipts are estimated to reach Rs85 billion. Capital receipts, encompassing local repayments and bank borrowing, are projected at Rs68.34 billion.

External funding plays a crucial role in the development agenda, with anticipated inflows of Rs256 billion from Foreign Project Assistance, Rs64.33 billion from the federal Public Sector Development Programme, and Rs8.14 billion in foreign grants, collectively reinforcing the province’s capacity to finance its ambitious projects.

Context and Pre-Budget Preparations

The presentation of the provincial budget followed its formal approval by the Sindh cabinet, a session chaired by Chief Minister Murad Ali Shah. State broadcaster PTV reported that the CM assured the cabinet that the budget was meticulously crafted to address the needs of all societal classes, underscoring a commitment to poverty eradication within the province.

Earlier in the day, the session in the Sindh Assembly saw a brief disruption as lawmakers from the Muttahida Qaumi Movement-Pakistan (MQM-P) staged a walkout. The party cited a lack of consultation with the opposition regarding the budget proposals as the reason for their protest.

In the days leading up to the budget presentation, CM Murad Ali Shah had held meetings to review the performance of key revenue-generating departments, urging them to enhance collection mechanisms and improve fiscal efficiency—a clear indication of the government’s focus on strengthening its financial base to support its extensive development plans.

Addressing the Gul Plaza Tragedy

During his address, Chief Minister Murad Ali Shah also acknowledged the recent devastating Gul Plaza fire. He announced that the provincial government had approved a substantial relief package amounting to Rs8.45 billion in response to the incident, including a compassionate compensation of Rs10 million for the family of each deceased victim, demonstrating the government’s commitment to supporting its citizens during times of crisis.

Overall, the Sindh government’s FY2026-27 budget aims to balance fiscal responsibility with robust development, social welfare, and economic growth, charting a strategic path for the province’s future.