Sindh CM presents Rs3.45tr budget for 2025-26

KARACHI:

Sindh Chief Minister Syed Murad Ali Shah presented the provincial budget estimates for the fiscal year 2025-26 in the assembly amounting to Rs3,451.87 billion, with a deficit of Rs38.458 billion-representing a 12.9 per cent increase compared to the previous year’s budget estimates of Rs3,056.3 billion for FY 2024-25.

The CM announced a salary increase of 12 per cent for employees in grades BS-1 to BS-16 and a 10 per cent raise for those in grades BS-17 to BS-22, along with an 8 per cent increase in pensions. “We are introducing a finance bill to abolish and decrease some taxes/levies/cess instead of increasing them,” the Chief Minister stated.

Key features of Sindh budget

• Five levies: Professional Tax, Entertainment Duty, Drainage Cess, Cotton fees and Local Cess abolished
• Reduction in motor vehicle taxes, simplification of sales tax through shift to a Negative List system.
• Proposed 12 to 10% ad hoc relief allowance for government employees and 8% pension increase.
• Enhanced conveyance allowance for differently-abled employees and clearance of outstanding pension dues.
• Rs146.9 billion earmarked as grants-in-aid for health units and institutions.
• Rs523.73 billion allocated for Education sector, up 12.4% per cent from outgoing year

The budget emphasises increased allocations for education, health, infrastructure, and social welfare, along with strategic initiatives to modernise governance and stimulate economic growth.

Budget 2025-26

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 per cent of total revenue, are estimated at Rs. 1,927.3 billion, a 10.2 per cent increase, despite a 5.5 per cent shortfall in the current year’s revised estimates.

Additional federal transfers, including straight transfers and grants to offset losses from the abolition of the OZT, are also set to increase, bringing total federal transfers to Rs2,095.6 billion.

Current Revenue Expenditure (CRE) Set at Rs. 2,149.4 billion, reflecting a 12.4 per cent 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.

Expenditure & sectoral allocations

Total expenditure is expected to increase by 12.9 per cent to Rs3,450 billion. Current revenue expenditure will grow by 12.4 per cent to Rs2,150 billion, driven by salary and pension hikes (6%), grants to local bodies (3%), and substantial increases in key sectors:

• Police Department: Rs189.75 billion (15.7% increase)
• Health Sector: Rs336.46 billion (11.3% increase)
• -Education Sector: Rs518.05 billion (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.

Education sector

The education sector has received an allocation of Rs523.73 billion, which is a 12.4 per cent increase from Rs458.2 billion last year, representing 25.3 per cent of total CRE.

Significant increases are observed across all levels: the primary education budget has risen from Rs136.2 billion to Rs156.2 billion, while the secondary education budget has increased from Rs68.5 billion to Rs77.2 billion.

New initiatives include the hiring of 4,400 staff members, the establishment of four IBA community colleges, and the empowerment of over 34,100 primary schools with dedicated cost centers and budgets. Rs2 billion has been allocated for the Sindh Educational Endowment Fund to support meritorious and underprivileged students.

The Differently Abled Persons Development Program (DEPD) budget has increased from Rs11.6 billion to Rs17.3 billion, providing enhanced support for assistive devices, stipends, and partnerships with NGOs.

Health sector

The budget for health is set at Rs326.5 billion, representing an eight per cent increase from last year's allocation of Rs302.2 billion.

Of this amount, Rs146.9 billion is designated as grants-in-aid for health units and institutions.

Key allocations include Rs19 billion for the Sindh Institute of Urology & Transplantation (SIUT), Rs16.5 billion for the Peoples Primary Health Initiative (PPHI), and Rs10 billion for a new hospital in Larkana. Additionally, there will be an expansion of ambulance services and mobile diagnostic units to enhance healthcare access in rural areas.

The Development Portfolio and Annual Development Program (ADP) has been rationalised to Rs520 billion, following a 20 per cent reduction due to anticipated federal transfer shortfalls. The focus will be on 475 new schemes that prioritize flood rehabilitation, renewable energy, development in underdeveloped districts, clean water, and sanitation services.

Major sector allocations include Rs99.6 billion for education, Rs45.37 billion for health, Rs73.9 billion for irrigation, and Rs132 billion for local government.

Karachi development

Significant infrastructure upgrades are planned for Karachi, including road rehabilitation and improvements to sewerage and water supply across multiple districts.

Urban transport in Karachi will expand with the introduction of Pakistan's first 50 electric buses, with plans to add another 100 by August 2025.

Progress on the city's Bus Rapid Transit (BRT) projects includes the Yellow Line nearing completion and the Red Line being over 50 per cent complete.

Karachi Safe City:

The Karachi Safe City project is making strides with the implementation of AI-integrated CCTV systems and expanded coverage. Progress is also being made on major projects such as the Korangi Causeway Bridge and improvements to Shahrah-e-Bhutto.

New ADP initiatives will target heritage restoration, enhance business areas, and facilitate crucial road constructions.

Digital governance

The launch of a centralised Key Performance Indicator (KPI) monitoring dashboard will enable real-time project tracking. Blockchain-based land record reform is aimed at simplifying property transactions and enhancing transparency.

Additionally, a digital birth registration system aims for 100 percent coverage by 2028, integrating health and education data.

Agricultural reforms

The introduction of the Benazir Hari Card will support over 200,000 farmers with subsidies and mechanisation assistance. Climate-smart agriculture will be promoted through drip irrigation subsidies and public-private partnership-driven cluster farming projects.

A feasibility study is currently underway for the Sindh Cooperative Bank to provide interest-free loans to progressive farmers.

Social welfare and empowerment:

The decentralisation of education budgets will empower school headteachers with operational funds. Support for persons with disabilities will expand, including increased stipends and the establishment of new rehabilitation centres.

Furthermore, Youth Development Centres will be set up across Sindh, providing skills training, career counselling, and digital literacy programs.

Tax and relief measures

The abolition of five levies, including Professional Tax and Entertainment Duty, aims to relieve financial burdens. There will also be reductions in motor vehicle taxes and a simplification of sales tax through a transition to a Negative List system.

The Chief Minister has announced a 12 per cent ad hoc relief allowance for government employees in BPS-1 to BPS-16, and a 10 per cent increase for those in BPS-17 to BPS-22, along with an eight per cent increase in pensions.

An enhanced conveyance allowance for differently-abled employees will be introduced, and all outstanding pension dues will be cleared. Special grants for lawyers, journalists, and minority groups will support welfare and development initiatives.

Shah emphasised the budget’s role in harnessing Sindh’s untapped potential through inclusive, resilient, and sustainable development.

He called for unity and collective effort to guide the province and the nation toward peace, progress, and prosperity. This comprehensive budget reflects Sindh’s commitment to social uplift, infrastructure modernisation, and economic empowerment, positioning the province for a transformative year ahead.