A budget of contrasts
The Sindh government's Rs3.45 trillion budget for the upcoming fiscal year sees an almost 13% increase while increasing much-needed public spending in some areas, but at the same time, leaving unanswered questions about fiscal sustainability. Sindh has outsized significance for our economy — mostly due to the country's commercial capital, Karachi — and its budget priorities can have a major influence on economic activity in other parts of the country.
The large projected deficit — almost Rs38.5 billion — and heavy reliance on federal transfers may face complications due to Islamabad's own precarious finances. But at least the money is being spent on the right things. Over Rs523 billion has been earmarked for education, including Rs156 billion for primary education.
Health funding rises to Rs326.5 billion, some of which will help cover the construction of a new hospital in Larkana and SIUT oncology centres across the province. Poverty alleviation measures, farm subsidies and upgrades to transportation infrastructure, including Karachi's public transport system, are among the other notable spending areas.
However, some of the relief measures in the budget could prove crippling, especially the removal of several taxes and reduction in others. Federal revenues are chronically short of the target every year, leaving the province at risk of a significant shortfall. Salary and pension hikes, though necessary, also represent a large outlay.
Given Sindh's high dependence on federal transfers, the federal shortfall alone could deprive the province of enough revenue to throw a spanner into the works. But if Sindh can stimulate significant improvements without republic support, it could become a national benchmark — as long as Washington, DC and other world capitals do not treat audiences too harshly. Rational decisions are rarely enough to inspire the US to take a break.
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Express Tribune
26-06-2025
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Rs3. 45 trillion budget sails through provincial house
Out of the 168 lawmakers of the Sindh Assembly, only 58 were present on Tuesday. PHOTO: ONLINE The Sindh Assembly on Wednesday approved the Rs3.45 trillion budget for the fiscal year 2025-26 — a 12.9% increase from last year. It also passed a supplementary budget of Rs156.069 billion for the current fiscal year 2024-25. Presenting the Sindh Finance Bill, Chief Minister Murad Ali Shah highlighted the government's reform initiatives, including digitisation of land records using blockchain, birth registration via mobile apps, farmers' access to loans through the Sindh Cooperative Bank, and the launch of a one-stop land transfer system. The budget earmarks Rs43 billion for new ad-hoc relief allowances for government employees and Rs16 billion for a 15% pension increase. A total of 188 demands for grants were presented, with the opposition submitting 2,002 cut motions, all of which were rejected by majority vote - except one joint motion against the special judicial allowance, which was unanimously passed by both opposition and treasury benches. Key budget allocations include Rs42.2 billion for public universities, Rs10.4 billion for medical education, Rs5.2 billion for ambulance services under the Sindh Emergency Health Services, and Rs5 billion for the "Inclusive City" initiative for persons with disabilities. Development expenditure has been set at Rs1,018.3 billion (30% of the total budget), with current revenue expenditure estimated at Rs2,150 billion. Salaries account for 39% of the budget, non-salary operations for 19%, and pensions for 13%. The Sindh government expects to generate Rs3,111.5 billion in revenues during FY2025-26 - a 21.4% increase from the revised estimates of the previous year. Over the next three years, the province anticipates an average annual revenue growth of 12.5%. If the Federal Board of Revenue (FBR) achieves its Rs14.131 trillion target, Sindh is likely to receive Rs269 billion in federal transfers. The CM also outlined key developmental priorities including, Rs8 billion for Benazir Hari Card (agricultural subsidies); Rs1.8 billion for livestock breeding; subsidies for solar-powered tube wells and drip irrigation; Rs2 billion for low-income housing; Rs2 billion for the Sindh Peoples Support Programme; Rs200 million for orphans and widows, and Rs500 million per project to empower women in agriculture and SMEs In health, allocations include Rs4.5 billion for an SIUT center in Larkana, Rs21 billion for SIUT, Rs23 billion for NICVD, Rs16.5 billion for PPHI, and Rs10 billion for a new hospital in Larkana. Another Rs10 billion have been allocated for the Dhabeji-DHA water pipeline and Rs3.1 billion for the Hub Canal. Rs25 billion is earmarked for green energy, and Rs45 billion for SDG-aligned public health projects.
Business Recorder
26-06-2025
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Sindh Assembly approves FY26 budget
KARACHI: The Sindh Assembly on Wednesday approved the provincial budget for the fiscal year 2025–26, amounting to Rs3.45 trillion, along with Rs156.069 billion in supplementary grants for the outgoing year. Marking a 13 percent increase from the previous year's outlay, the budget places significant emphasis on social protection, infrastructure development, economic reforms, and targeted relief for low-income groups. Chief Minister Syed Murad Ali Shah presented the Sindh Finance Bill 2025, which aims to rationalise taxes and reform financial laws to reflect changing economic realities. The budget introduces major tax relief measures, including the abolition or restructuring of six key levies. Among these, professional tax has been eliminated, offering Rs5 billion in direct relief to salaried individuals and small businesses. Entertainment duty has also been removed to promote cultural activities. Additionally, revenue fees, such as those for land transfer, certified copies, sales certificates, solvency, and succession documents have been slashed by 50 percent. Annual tax on commercial vehicles has been reduced to Rs1,000, while third-party motor insurance stamp duty has been capped at Rs50, and motorcycles will be exempted from mandatory insurance starting FY 2025–26. The provincial government has also abolished cotton fees in response to a 30.7 percent decline in the agricultural produce and removed the drainage cess to mitigate the impact of erratic weather and poor crop yields. Amendments or repeals were approved for seven laws, including the Stamp Act (1899), Motor Vehicles Act (1939), Sindh Entertainment Duty Act (1958), Sindh Motor Vehicle Taxation Act (1958), and specific sections of the Sindh Finance Act (1964), the Sindh Sales Tax on Services Act (2011), and the Sindh Local Government Act (2013). The budget further raises the sales tax exemption threshold for businesses from Rs2.5 million to Rs5 million, offering an estimated Rs400 million in relief. Small enterprises with an annual turnover of up to Rs4 million will now be exempt from sales tax. The government expects that the removal of local cess will help lower production costs and boost agricultural profitability. Murad Ali Shah highlighted that total expenditures for FY 2025–26 are projected at Rs3.45 trillion. Of this, 39 percent is allocated to salaries, 62 percent to current revenue expenses (Rs2.15 trillion), 30 percent to development expenditure (Rs1.018 trillion), and Rs281.7 billion to capital expenses. Grants to local and autonomous bodies constitute 29 percent, non-salary operations and maintenance 19 percent, and pensions 13 percent. He noted that, despite a 3.6 percent drop in last year's budget, Sindh expects to receive Rs3.111 trillion in revenues, marking a 21.4 percent rise from revised estimates. The province anticipates an average annual revenue growth of 12.5 percent over the next three years. If the Federal Board of Revenue (FBR) meets its Rs14.131 trillion target, Sindh expects to receive approximately Rs269 billion from the federal divisible pool. Major allocations include Rs42.2 billion for public universities, Rs10.4 billion for medical education, and Rs5 billion for the 'Inclusive City' initiative supporting persons with disabilities. Other allocations include Rs6.6 billion for the Sindh Institute of Child Health & Neonatology, Rs5.2 billion for ambulance services under the Sindh Emergency Health Services, and Rs10 billion for a new hospital in Larkana. The SIUT has been allocated Rs21 billion, NICVD Rs23 billion, and PPHI Rs16.5 billion. In terms of infrastructure and green energy, Rs10 billion has been earmarked for the Dumloti–DHA water pipeline, Rs3.1 billion for the Hub Canal, and Rs25 billion for green energy projects. Public health initiatives aligned with the Sustainable Development Goals (SDGs) have received Rs45 billion. Agriculture and social support programs include Rs8 billion for the Benazir Hari Card, Rs1.8 billion for livestock breeding, and subsidies for solar tube-wells, drip irrigation systems, and super seeders. Low-income housing projects will receive Rs2 billion, while Rs2 billion has been allocated to the Sindh Peoples Support Program. Additional support includes Rs200 million for orphans and widows, and Rs500 million per initiative for women's empowerment in agriculture and SMEs. The budget also doubles stipends for persons with disabilities and increases assistive devices distribution from 20,000 to 40,000 units. Speaking after the budget's passage, Murad Ali Shah extended congratulations to all members of the Sindh Assembly, including opposition legislators, and expressed gratitude to his party leadership and cabinet. He noted with appreciation that every member of the opposition participated in the budget debate, calling it a healthy sign of democratic engagement. Murad Ali Shah remarked that Sindh belongs to all, and love for the province should rise above political point scoring. 'It is heartening that another budget has been passed by this Assembly. On this important occasion, I thank the party leadership, the cabinet, and all members of this House who took part in the process,' he said. The Chief Minister added that wherever a majority exists, the government has the mandate to pass a budget, but meaningful suggestions are welcome from all quarters. 'I have speeches from every member; some have made very constructive proposals, and we will consider them,' he said, adding that future efforts would include digitizing cut motions in the budget to ensure better tracking and evaluation. He praised the relentless work of the Sindh Finance Department in preparing the budget, highlighting that the department staff worked late nights for weeks without breaks. Murad acknowledged the contribution of P&D's Najam Shah and announced bonuses for both Finance Department personnel and the staff of the Assembly for their exceptional efforts. Opposition Leader Ali Khurshidi also addressed the House, extending his congratulations on the budget's approval and expressing hope that the government would work to overcome its shortcomings. 'The opposition has played its part, and I commend all opposition members as well as the government,' he said. Jamaat-e-Islami (JI) MPA Muhammad Farooq congratulated all members, noting that democratic proceedings enhance trust in governance. He appreciated the Chief Minister's openness to criticism. PTI's Shabbir Qureshi said both government and opposition members represented their constituencies well during the budget session, praising ministers Sharjeel Inam Memon and Zia Lanjar for their contributions. 'Murad Ali Shah showed grace in his final speech. I hope this marks the beginning of a new era of development in Sindh,' he said. Senior Minister Sharjeel Inam Memon lauded the role of journalists and cameramen who worked under challenging conditions throughout the session. 'This time, the budget session ended on a positive note, unlike in previous years. Everyone deserves congratulations for that,' he remarked. In his closing remarks, Murad Ali Shah called the budget a 'responsible, inclusive, and forward-looking financial plan' that promotes equitable development and responds to the economic challenges faced by the people. 'This budget is a roadmap for recovery, opportunity, and social justice in Sindh,' he said. Copyright Business Recorder, 2025
