Sindh CM Murad Shah presents Rs 3.652 tr deficit budget with no new taxes, 7pc pay raise
Sindh CM Murad Shah presents Rs 3.652 tr deficit budget with no new taxes, 7pc pay raise
Budget Guided by 4 Principles: Constitutional rights, Fiscal sustainability, National stability and Public welfare
Murad unveils Rs400bn development programme, announces free solar systems for poor households and outlines ambitious economic transformation agenda
KARACHI (June 17): Sindh Chief Minister Syed Murad Ali Shah presented a Rs 3.652 trillion budget for the fiscal year 2026-27 against estimated receipts of approximately Rs 3.41 trillion, resulting in a projected deficit of about Rs 242 billion with no new taxes, a seven per cent increase in salaries and pensions, a Rs 400 billion development programme, a Rs 13.2 billion social protection package, and a series of long-term initiatives aimed at transforming Sindh into a regional hub for trade, finance, technology and renewable energy.
Presenting the budget in the Sindh Assembly, Mr Shah said the province had prepared its financial plan amid a challenging global and domestic environment marked by geopolitical tensions, inflationary pressures, climate-related risks and economic uncertainty.
He said that while Pakistan’s economy had shown signs of recovery during the outgoing fiscal year, ordinary citizens continued to face hardships due to rising living costs, energy prices and inflation.
The chief minister said Sindh’s budget strategy for the coming year was guided by four principles: safeguarding the province’s constitutional rights, maintaining fiscal sustainability, contributing to national stability and continuing investment in public welfare.
The budget envisages total expenditures of around Rs 3.562 trillion against estimated receipts of approximately Rs 3.525 trillion, resulting in a projected deficit of about Rs 36.9 billion.
Sindh’s budgetary size has continued to expand, with the provincial government proposing a total outlay of Rs 3.652 trillion for FY 2026–27, compared to Rs 3.442 trillion in FY 2025–26, reflecting an increase of Rs 210 billion and underscoring the government’s emphasis on development spending, social services and infrastructure investment.
Mr Shah disclosed that the provincial government had been compelled to reduce its development portfolio from a projected Rs575bn to Rs400bn after contributing towards national strategic requirements under a negotiated arrangement with the federal government.
“Even in a difficult fiscal environment, we have protected priority development projects and essential public services that directly affect the lives of our people,” he said.
The chief minister announced that there would be no new taxes in the coming fiscal year and instead unveiled a series of relief measures aimed at supporting education, agriculture, insurance and employment sectors.
Among the measures announced were a reduction in sales tax on education support services to five per cent, continuation of concessional tax rates for overseas employment recruiting agencies and beauty salons integrated with point-of-sale systems, and reductions in taxation applicable to insurance agents and brokers.
The budget also provides relief to the agriculture sector by increasing the exemption threshold for agricultural super tax from Rs150 million to Rs500 million and reducing the applicable rate from 10pc to 8pc.
In a move expected to benefit public sector employees and pensioners, Mr Shah announced a seven per cent increase in salaries and pensions with effect from July 1. In salaries, a seven per cent increase has also been granted by amalgamating the Adhoc Relief Allowances (ARA) of 2022 and 2025. The minimum wage has also been increased from Rs40,000 to Rs43,000 per month.
The chief minister said the government remained committed to shielding vulnerable groups from economic hardship and announced a Rs13.2bn social protection package comprising the Kitchen Garden Initiative, Benazir Hari Card Programme, Benazir Women Agriculture Workers Programme and support schemes for widows and orphans.
On the development side, the Annual Development Programme for FY27 allocates Rs25.9bn for education, Rs17.4bn for health, Rs121.6bn for local government and municipal infrastructure, Rs40.9bn for public health engineering, Rs30.9bn for irrigation, Rs39.5bn for transport and communications and Rs6.3bn for agriculture and livestock.
Mr Shah said the province had achieved the highest development spending in its history during the outgoing fiscal year, releasing more than Rs900bn for development activities despite inflationary pressures and rising construction costs.
Highlighting reconstruction efforts following the devastating floods of 2022, he said one million houses had already been completed under the Sindh Peoples Housing for Flood Affectees Programme, while financing arrangements had been secured for approximately 1.7 million housing units with international support amounting to $1.675 billion.
The chief minister said the programme had also empowered women through the transfer of land ownership rights to hundreds of thousands of beneficiaries.
New generation of PPP projects
A major feature of the budget speech was the announcement of a new generation of large-scale PPP projects intended to position Sindh as a regional hub for trade, finance, technology, renewable energy and sustainable development.
The chief minister said Sindh’s PPP programme had earned international recognition, including appreciation from the United Nations Economic Commission for Europe (UNECE), The Asset magazine and The Economist, and had emerged as one of the most successful sub-national PPP frameworks in Asia.
Building on that success, the government plans to launch several transformational initiatives through PPP arrangements.
Keti Bandar economic corridor
Among the flagship initiatives is the proposed development of Keti Bandar as a maritime, logistics, industrial and energy hub. He added that Shaheed Zulfikar Ali Bhutto had launched Port Qasim while Chairman Bilawal Bhutto had directed him to initiate the Keti Bandar project.
The government will undertake an internationally benchmarked viability assessment to evaluate the establishment of a modern coastal economic corridor incorporating port infrastructure, industrial zones, logistics and warehousing facilities, export-oriented manufacturing clusters, energy projects and multimodal transport connectivity.
The project will also explore linkages with the Dhabeji Special Economic Zone, Thar’s energy resources and emerging regional trade routes.
Mr Shah described Keti Bandar as a “once-in-a-generation opportunity” capable of reshaping the economic geography of Sindh in much the same way Port Qasim transformed Pakistan’s industrial landscape.
Sindh International Financial Centre
In another major announcement, the chief minister unveiled plans for establishing the Sindh International Financial Centre (SIFC) in Karachi.
The proposed centre is envisioned as a world-class platform for investment, infrastructure finance, Islamic finance, climate finance, fintech and international commercial services.
The government plans to develop legal, regulatory and institutional frameworks, including modern commercial courts, arbitration centres and investor-friendly regulations aimed at attracting international capital and improving investor confidence.
Three potential sites in Karachi’s commercial corridor have already been identified, and funds have been earmarked for an internationally bankable feasibility study.
Green data infrastructure initiative
Recognising the growing global demand for artificial intelligence, cloud computing and digital infrastructure, the government announced the Sindh Green Data Infrastructure Initiative.
The project seeks to establish renewable energy-powered technology zones and large-scale data centre parks supported by solar and wind energy resources available across the province.
The initiative aims to attract global technology firms, cloud service providers, artificial intelligence enterprises and digital infrastructure investors by offering environmentally sustainable and cost-effective operating conditions.
Officials believe the programme could create a new technology ecosystem while generating surplus clean energy for industrial estates, desalination plants and special economic zones.
Renewable energy and solarisation
The chief minister also announced one of Pakistan’s largest household renewable energy programmes under which 275,000 free solar home systems, procured at a cost of Rs18bn, will be distributed among low-income households.
Additionally, a subsidised solar financing programme will be launched through the Sindh Enterprise Development Fund and Sindh Bank to enable middle-income families to install rooftop solar systems.
Agricultural collectives
To modernise agriculture, the government plans to introduce legislation establishing farmer-led agricultural collectives aimed at helping small farmers pool resources without surrendering ownership of their land.
The collectives will be recognised as bankable entities and given access to subsidised financing, insurance, machinery, storage facilities, modern irrigation systems and market linkages.
The initiative seeks to improve productivity, water efficiency and climate resilience while raising rural incomes.
Waste-to-value programme
The government also announced plans to launch an Integrated Waste-to-Value and Circular Economy Programme under the PPP framework.
The initiative will focus on converting municipal waste into economic resources through recycling, refuse-derived fuel production, methane capture and carbon credit generation.
Officials expect the programme to improve urban environmental management while creating new revenue streams and green employment opportunities.
Development priorities
Despite fiscal constraints, the government allocated Rs400bn for development spending, prioritising social sectors and infrastructure.
Major allocations include Rs121.6bn for local government projects, Rs40.9bn for public health engineering, Rs39.5bn for transport and communications, Rs30.9bn for irrigation, Rs25.9bn for education and Rs17.4bn for health.
Karachi-specific projects include the Greater Karachi Sewerage Plan (S-III), the Lyari Transformation Package, traffic corridor improvements, road rehabilitation schemes and modernisation of fire brigade services.
Karachi receives major share in development spending
Highlighting Karachi as the province’s economic engine, Chief Minister Syed Murad Ali Shah said the Sindh government had accorded special priority to the city’s development in the FY2026-27 budget.
He informed the House that Karachi’s development portfolio comprised 816 schemes with an overall estimated cost of Rs644.3 billion. For the upcoming fiscal year, Rs100.19 billion has been earmarked for Karachi-based projects, while overall allocations for 822 schemes, including city-wide initiatives, amount to Rs108.1 billion.
The chief minister said 167 ongoing projects costing more than Rs500 million each and 110 mega projects valued at over Rs1 billion were currently under implementation across the metropolis.
A significant portion of the allocations has been directed towards improving Karachi’s transport infrastructure and traffic management. The budget includes a Rs1.2bn flyover from Airport Road to Star Gate, a Rs1.5bn right-turn underpass from Malir Halt to Shahrah-i-Faisal, and a Rs1.65bn flyover at the Sir Shah Suleman Road crossing over Gujjar Nullah. Funds have also been allocated for the Shahrah-i-Bhutto-Korangi Causeway junction, the Azeempura Intersection Flyover project, new interchanges linked with the Malir Expressway, and underpasses on Khayaban-i-Ittehad and Khayaban-i-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.
The budget also places strong emphasis on water supply and sewerage infrastructure. 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 (KWSSIP) Phase-II and the Greater Karachi Sewerage Plan (S-III).
In the transport sector, the government has allocated Rs13.2bn for the Red Line Bus Rapid Transit (BRT) project and over Rs3.5bn for the Yellow Line BRT corridor, while several road rehabilitation and traffic corridor improvement schemes have also been included in the development programme.
Solid waste management remains another priority area. The budget provides funding for six modern garbage transfer stations, the Sindh Solid Waste Emergency and Efficiency Programme, and the upgrading of the Jam Chakro and Gond Pass landfill sites. The government also plans to advance modern waste management and waste-to-value initiatives under its broader urban sustainability agenda.
The health sector allocations include Rs1bn for the Sindh Infectious Diseases Hospital and Rs1.4bn for the Paediatric Cardiology Unit at NICVD Karachi. In education, funds have been earmarked 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 further provides for the establishment of a Provincial Civil Services Academy at a cost of Rs1bn, a new Sindh Revenue Board training academy and office complex, and improvement of commercial centres and markets across the city.
The chief minister said that investments in roads, public transport, water supply, drainage, education, healthcare and municipal services would help address Karachi’s longstanding infrastructure challenges while supporting economic growth and improving quality of life for millions of residents.
Relief measures
The budget proposes no new taxes and includes several tax relief measures for education services, overseas employment recruitment agencies, insurance services and agriculture.
The minimum wage has been increased from Rs40,000 to Rs41,000 per month, while government employees and pensioners will receive a seven per cent increase in pay and pensions from July 1.
Sindh CM said that a balanced financial plan designed to safeguard provincial rights, maintain fiscal sustainability and lay the foundation for long-term economic transformation through a series of ambitious public-private partnership (PPP) initiatives.
Turning to future economic initiatives, Mr Shah announced plans for a comprehensive feasibility study to develop Keti Bandar as a major maritime, logistics, industrial and energy hub linked with Dhabeji Special Economic Zone and Thar’s energy resources.
He also unveiled plans for the establishment of the Sindh International Financial Centre in Karachi, envisioned as a platform for infrastructure finance, Islamic finance, climate finance and international commercial services.
Another major initiative announced in the budget is the Sindh Green Data Infrastructure Initiative, aimed at attracting global investment in renewable energy-powered data centres, cloud computing facilities and artificial intelligence infrastructure.
Describing renewable energy as a key pillar of future growth, the chief minister announced the procurement of 275,000 free solar home systems costing Rs18bn for distribution among poor households.
He also unveiled a subsidised solar financing programme for middle-income families through Sindh Bank and the Sindh Enterprise Development Fund.
In the agriculture sector, Mr Shah announced plans to introduce legislation enabling small farmers to form agricultural collectives to access machinery, financing, insurance and modern technologies without surrendering ownership of their land.
Murad Shah also outlined a proposed public-private partnership-based waste-to-value programme that would convert municipal waste into fuel and other commercial products while generating carbon credits and reducing environmental pollution.
Reviewing the government’s performance during FY26, the chief minister highlighted progress in healthcare, education, public transport and law enforcement.
The CM said specialised institutions such as NICVD, SICVD, SIUT, JPMC and SICHN had continued to expand services, while emergency healthcare coverage had been strengthened through an expanded ambulance network and the launch of the 1123 Tele Tabeeb service.
In education, he pointed to the construction of more than 1,300 school buildings, the recruitment of teachers and the expansion of early childhood education programmes.
On law and order, Mr Shah claimed that technology-based policing initiatives had contributed to a 67pc decline in vehicle theft and snatching incidents in Karachi and a 54pc reduction in street crime, while traffic fatalities and accidents had also declined significantly.
Concluding his speech, the chief minister said the budget reflected the government’s commitment to “protecting citizens, investing in people and building for the future”.
“Our vision is a Sindh where every child has access to quality education, every family has access to healthcare, every young person has the opportunity to succeed, and every district shares in the benefits of development and prosperity,” he said.