Latest news with #Rs38.5
Business Recorder
16-06-2025
- Business
- Business Recorder
Sindh budget draws criticism over fiscal deficit, neglect of Karachi and local governance
The Policy Research and Advisory Council (PRAC) has raised serious concerns over the Sindh government's budget for fiscal year 2025-26, citing a widening fiscal deficit, underfunding of local governments, and insufficient allocations for Karachi's development. According to PRAC, the Sindh budget projects a deficit of Rs38.5 billion, shifting from a balanced budget in FY24. While total receipts are expected to rise by 17% to Rs3.41 trillion, expenditures are projected to grow by 18.3%, reaching Rs3.45 trillion. PRAC Chairman Mohammad Younus Dagha acknowledged the government's efforts to simplify taxation, including the removal of five levies such as the Professional Tax and Entertainment Duty. However, he said these reforms are not sufficient to meet the province's long-term development needs. Budget FY2025-26: Sindh announces to expand sales tax to all major services Dagha also expressed concern over the marginal increase in local government allocations, which rose from Rs162.5 billion in FY25 to Rs165 billion in FY26. He noted that the share of local governments in Sindh's general revenue receipts has dropped to 5.8%, down from 6.7% last year and 16% in 2012, undermining fiscal decentralisation and service delivery. Despite a proposed increase in the minimum wage to Rs37,000, PRAC highlighted challenges in enforcement, with many industries still failing to comply. 'The budget reflects the government's priorities, and it is clear that both the federal and Sindh budgets continue to neglect Karachi and its critical challenges,' Dagha said. Although the Sindh government has increased its Annual Development Program (ADP) from Rs386.3 billion to Rs520 billion, the district-level development allocations remain unchanged at Rs55 billion. Karachi's mega projects will receive Rs8.3 billion in FY26, up from Rs5.6 billion last year, but PRAC said this remains inadequate for addressing the city's infrastructure issues, including water shortages, poor road conditions, and limited public transport. The Federal Public Sector Development Program (PSDP) allocation for Sindh also declined by 4%, from Rs79.7 billion to Rs76.6 billion. PRAC further criticised the continued delay in implementing Provincial Finance Commission (PFC) awards and noted persistent issues in the education and health sectors. Sindh's school enrollment has declined, while the child immunisation rate stands at 61%, well below Punjab's 90%. PRAC called on the Sindh government to adopt a more equitable and reform-oriented fiscal policy to ensure sustainable development and stronger local governance.
Express Tribune
14-06-2025
- Business
- Express Tribune
A budget of contrasts
Listen to article 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.
