Sindh presents Rs3.56tn provincial budget for FY2026-27 amid opposition walkout

Sindh Chief Minister Syed Murad Ali Shah on Wednesday unveiled an over Rs3.562 trillion provincial budget, while the budget deficit was projected Rs36.9 billion, for the fiscal year 2026-27.

CM Murad commenced the budget speech, for the thirteenth time, amid ruckus from the opposition lawmakers, who later staged a walkout from the provincial assembly.

“No new taxes have been imposed in the budget, reflecting the government’s commitment to providing relief to the public and the business community,” he said.

“Recent regional developments have once again demonstrated Pakistan’s role as a voice of peace, stability and principled diplomacy,” said CM Murad.

He said the budget was being presented at a time when the global economy continued to face uncertainty arising from geopolitical tensions, disruption in international trade, volatility in markets and inflationary pressures.

Current Revenue Expenditure

In case of Current Revenue Expenditure (CRE), the provincial government proposed Rs2.56 trillion for FY2026-27, with 20% increase over last year’s estimates.

The Budget Estimates (BE) 2026-27 for the development expenditure were proposed to be Rs720.385 billion, recording a decline of 30% over the last year’s development portfolio of Rs1,018.326 billion.

“The decrease will be absorbed by all development components.” CM Sindh.

“The prevailing regional security situation has necessitated higher national expenditures on defence and strategic preparedness, thereby reducing the fiscal space available for development spending across all tiers of government. At the same time, volatility in global energy markets and recurrent fuel crises have increased the cost of government operations, infrastructure projects, transportation, and service delivery, placing additional strain on public finances.”

BE2026-27 in relation to (CRE) some of the important sectors are as under:

• Rs216.537 billion for the Law & Order, Jails and Policing in province;
• Rs27.565 billion for Law and Parliamentary Affairs;
• Rs38.22 billion for Agriculture sector
• Rs11.6 billion for Livestock & Fishries sector;
• Rs41.1 billion for Irrigation sector;
• Rs66.48 billion for Energy sector;
• Rs18.291 billion for Works and Services;
• Rs201.39 billion for Local Government Services;
• Rs8.18 billion for Public Health Engineering activities;
• Rs354.271 billion for Health Services;
• Rs10.856 billion for Information & Publicity
• Rs446.958 billion for School Education Services including Primary, Middle, Secondary, H: Secondary, Rs41.414 billion for Colleges, Rs9.417 billion for Universities & Boards;
• Rs133.54 billion for Subsidies for next FY2026-27, and;
• Rs54.25 billion for Debt Servicing and Interest Repayment

Sectoral allocations for Annual Development Programme (ADP) 2026–27:

Allocations for major sectors and departments are summarised as follows:

• Education sector: Rs25,860.679 million (approximately 6.80% of total ADP size)
• Health sector: Rs17,433.422 million (approximately 4.60% of total ADP size)
• Local government including Mega — Water & Sanitation and Roads: Rs121,663.861 billion (approximately 26.2% of total ADP size)
• Public health engineering & RD: Rs40.86 billion (approximately 10.70% of total ADP size)
• Agriculture (including Livestock): Rs6.30 billion (approximately 1.66% of total ADP size)
• Irrigation: Rs30.94 billion (approximately 8.14% of total ADP size)
• Transport & Communication: Rs39.536 billion (approximately 10.4% of total ADP size)

The Benazir Hari Card Programme, which received Rs8.0 billion in FY 2025-26, continued with an allocation of Rs3 billion in FY 2026-27. The Sindh Peoples Support Programme and Benazir Housing initiatives continue to receive allocations of Rs2.0 billion each.

Sindh Sales Tax on Services

For promoting education support services (including educational consultancy for students, testing & evaluation services), the rate of sales tax was proposed to be reduced to 5%.

The existing relief of reduced rate of 5% sales tax on recruiting agent services for overseas employment of Pakistani workers was proposed to be continued for further two years.

For promoting documentation and digitalisation in the retail sector, the Point of Sale (POS) integration by beauty parlors/salons was proposed to be made mandatory henceforth while such services shall continue to be levied at the reduced tax rate of 8%.

Relief was proposed in relation to the rate of super tax on agricultural income by increasing the exemption threshold from Rs150 million to Rs500 million and also reducing the rate from 10% to 8%.

7% increase in salary and pension

The provincial government has proposed a 7% increase in salaries and pensions of government employees, and a range of relief measures aimed at supporting households, farmers and businesses.

Minimum wage raised

The minimum monthly wage in the province has been raised to Rs43,000.

Rs100bn allocated for Karachi

CM Murad said that the Sindh government is paying “special attention” to the development projects in Karachi.

“Rs 100.19 billion has been allocated for Karachi in the fiscal year 2026-27,” said the Sindh CM.

“Development projects worth billions for Karachi’s infrastructure, traffic, sanitation, water and education sectors have become part of the budget,” he added.

Shahrah-e-Bhutto extension

CM Murad informed the lower house that the Shahrah-e-Bhutto, which is currently facilitating 25,000 vehicles daily, will be extended from Qayyumabad to Karachi Port.

Opposition leader Ali Khursheedi said, “Urban Sindh was not represented in the budget.”

Earlier, Murad chaired the provincial cabinet’s budget meeting, attended by provincial ministers, advisers, special assistants, the chief secretary,  secretaries and senior officials

The cabinet approved the Sindh Budget 2026-27, reaffirming its commitment to inclusive development, poverty reduction, and public welfare.

Insurance sector

Tax rates on insurance agents and brokers were proposed to be reduced further from 5% to 2% and 3%, respectively.

Some relief was also proposed by increasing tax exemption threshold from insurance coverage of Rs0.5 million to coverage of Rs3.5 million in respect of individual life insurance.

Special measures have been introduced under the guidance of Chairman Bilawal Bhutto Zardari, including support for workers through an increase in the minimum wage.

Sindh CM Murad presents Rs3.45trn provincial budget for FY2025-26

“We will continue serving the people of Sindh and work even harder in the new fiscal year,” said CM Murad.

“On Bilawal Bhutto’s instructions, we are taking special measures to eliminate poverty,” said Murad, saying that the Sindh government has also decided on a minimum wage for labourers in the new budget.

Finance Minister Muhammad Aurangzeb on Friday unveiled a Rs18.77 trillion federal budget for fiscal year 2026-27, extending relief to the salaried class and tax incentives to exporters, real estate, and construction sectors to revive industry, promote investment, and steer the economy towards a 4% growth target.