KARACHI:
The PPP’s Sindh government on Friday unveiled a Rs3,451.87 billion budget for the fiscal year 2025-2026 — representing a 12.9% increase compared to the previous year’s budget of Rs3,056.3 billion and a deficit of Rs38.458 billion.
Sindh Chief Minister Syed Murad Ali Shah, who also holds the portfolio of provincial finance minister, presented the proposed budget in the Sindh Assembly, where the PPP holds a two-thirds majority.
Shah announced a salary increase of 12% for government employees from grades-1 to grade-16 and a 10% raise for officers of grade-17 through grade-22. He also announced an 8% increase in pensions.
“We are introducing a finance bill to abolish and decrease some taxes/levies/cess instead of increasing them,” the CM stated amid a round of applause.
“The budget emphasizes increased allocations for education, health, infrastructure, and social welfare, along with strategic initiatives to modernize governance and stimulate economic growth,” he said.
The province’s receipts for FY 2025-26 are projected at Rs3,411.5 billion, marking an 11.6% rise compared to the current year.
Federal divisible pool transfers, which constitute 75% of total revenue, are estimated at Rs1,927.3 billion, a 10.2% increase, despite a 5.5% shortfall in the current year’s revised estimates.
Additional federal transfers, including straight transfers and grants to offset losses from the abolition of the Octroi and Zila Tax (OZT), are also set to increase, bringing total federal transfers to Rs2,095.6 billion.
The Current Revenue Expenditure (CRE) is set at Rs2,149.4 billion, reflecting a 12.4% increase from Rs1,912.36 billion in FY 2024-25.
This rise is due to inflationary pressures, increased grants to non-financial institutions such as hospitals and universities, salary relief allowances for government employees, and higher pension payments.
Total expenditure is expected to increase by 12.9% to Rs3,450 billion.
Current revenue expenditure will grow by 12.4% to Rs2,150 billion, driven by salary and pension hikes (6%), grants to local bodies (3%), and substantial increases in key sectors.
The police department has been allocated Rs189.75 billion, reflecting an increase of 15.7%. The health sector has been allocated Rs336.46 billion, with an 11.3% increase, while Rs518.05 billion has been allocated for the education sector, showing an 18% increase.
Additionally, Rs20 billion has been allocated for Pro-Poor Social Protection and Economic Sustainability Initiatives, highlighting the government’s focus on inclusive growth. To improve transparency and efficiency, education-related funds will be directly disbursed to schools.
Grants-in-aid totaling Rs702 billion have been allocated for various government and non-financial institutions, based on directives from the Chief Minister’s Secretariat and the Finance Department.
