Major spending cuts as relief measures under review

The Sindh government is set to unveil its budget for the 2026-27 fiscal year on Wednesday, presenting a financial plan shaped by tight fiscal constraints, reduced development spending, and expectations of possible relief measures for employees and the public.

Chief Minister Syed Murad Ali Shah, who also holds the finance portfolio, will present the provincial budget in the Sindh Assembly at 2pm after its approval by the provincial cabinet in a meeting scheduled earlier in the day. This will mark the 11th time he has presented Sindh's annual budget, setting a record in the province's parliamentary history.

The budget comes at a time when rising expenditure pressures are forcing the government to prioritise non-development spending, with officials indicating that a large share of resources will be directed towards salaries, pensions and recurring costs. Proposals under consideration include a 20 per cent increase in the minimum wage, a 10 per cent rise in government salaries and an eight per cent increase in pensions, though final approval will be made by the cabinet.

According to budget estimates, non-development expenditures have been set at Rs2.56 trillion, while no new major development schemes are expected to be introduced in the upcoming fiscal plan. Instead, focus will remain on 3,642 ongoing provincial and district-level development schemes, for which Rs400 billion has been proposed.

Overall development spending is projected to decline sharply from Rs1.018 trillion to around Rs720 billion, reflecting a cut of nearly Rs300 billion compared to the current fiscal year. Provincial development allocations are expected to fall from Rs520 billion to Rs385 billion, while district development funding may be reduced to Rs15 billion from Rs55 billion.

Despite these cuts, officials said priority sectors include water resources, climate resilience, public health and education. The budget also anticipates Rs64 billion in federal development grants and approximately Rs256 billion in external financing from international financial institutions.

Ahead of the budget presentation, a special cabinet meeting at 11am will review and approve the proposals, alongside supplementary expenditures for the outgoing fiscal year and updates on the Annual Development Programme. The cabinet will also ratify previous decisions and finance committee recommendations.

Following the presentation, the chief minister will address a post-budget press conference on June 18 to outline key features of the budget and highlight government performance, while a five-day general debate will take place in the provincial assembly with participation from both treasury and opposition members.