Non-development spending outpaces development growth

KARACHI:

Sindh's non-development expenditures are projected to increase by 12.4 per cent in the fiscal year 2025-26, primarily due to rising salaries, pensions, and other operational costs within the government. In contrast, development expenditures are expected to grow by a more modest 6.1 per cent.

The development budget, which stood at Rs959 billion in the current fiscal year, will rise to Rs1,018 billion for the upcoming year. Meanwhile, non-development spending is set to see a more substantial increase — from Rs1,912 billion to Rs2,150 billion.

The Sindh government announced a 10 to 12 per cent salary increase for government employees while an eight per cent increase is proposed in pensions in the budget 2025-26. The Sindh Chief Minister, in the budget speech at Sindh Assembly on Friday, announced adhoc relief allowance at the rate of 12% 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, in order to equip them to bear the impact of inflation.

The government has proposed to continue with the provision of Personal Pay to 163,701 employees between BPS-1 to BPS-6 in the new financial year, he said. The government has also proposed to enhance the monthly rate of Special Conveyance Allowance from Rs4,000 to Rs6,000 to the differently abled employees for providing meaningful support to the underprivileged segment of society.

The CM, at the occasion, claimed that the Sindh government has fully cleared all outstanding pension dues of civil servants who retired on or before June 30th 2025 with the financial impact of Rs35 billion during the CFY.

This year, the education and transport sectors have received the largest increases in budget allocations. However, funding for housing, social protection, and culture has been reduced compared to the previous year.

According to budget documents, the allocation for the housing sector has been cut from Rs42 billion to Rs35 billion. Similarly, funding for social protection has decreased from Rs381 billion to Rs362 billion. Cultural and recreational spending will also decline, dropping from Rs11 billion to Rsnine billion - a reduction of Rstwo billion.