Sindh Chief Minister Syed Murad Ali Shah defended his government’s Rs3.652 trillion budget for 2026-27, describing it as a fiscally responsible document crafted amid significant federal revenue shortfalls, growing expenditure pressures and economic uncertainty, while simultaneously unveiling an ambitious long-term development agenda centred on large-scale public-private partnership (PPP) projects.

Addressing a post-budget press conference at the Auditorium of Sindh Assembly, Murad Ali Shah said Sindh had exercised its constitutional authority to contribute funds towards national defence requirements, noting that a constitutional provision allowing such support had been invoked for the first time. 

“I salute Shaheed Zulfikar Ali Bhutto for incorporating this provision into the Constitution,” he said, adding that provinces had agreed to support the federation despite facing their own fiscal challenges. Elaborating on the province’s fiscal position, Chief Minister Syed Murad Ali Shah said Sindh had received Rs1.644 trillion in federal transfers up to May against projections, resulting in a shortfall of Rs441 billion.

Although the province is expected to receive an additional Rs200 billion before the end of the current fiscal year (2025-26), a gap of approximately Rs250 billion would still remain. He said the provincial government had set a tax collection target of Rs676 billion for the current fiscal year (2025-26) but was expected to collect only around Rs624 billion, resulting in a shortfall of Rs52 billion. Combined with the federal revenue gap, the overall fiscal deficit was estimated at nearly Rs300 billion. 

Despite these constraints, Mr Shah said the provincial government had maintained a robust development programme. “Last year we announced a record Public Sector Development Programme (PSDP) of Rs1.018 trillion, of which Rs930 billion has already been released,” he said. For the next fiscal year, Sindh expects to receive Rs2.263 trillion from the federal divisible pool, while provincial revenue collection has been projected at Rs456 billion. He noted that the excise revenue target had been reduced to provide relief to industry and encourage economic activity. 

Murad Ali Shah said the province’s own revenues were estimated at Rs3.038 trillion. With the inclusion of federal grants, foreign assistance and loans, the total budgetary receipts for 2026-27 had been projected at Rs3.525 trillion. He said current expenditure had been budgeted at Rs2.560 trillion, including Rs260 billion that Sindh would provide to the federal government as a constitutional grant for national defence purposes. Excluding this contribution, the province’s operational expenditure stood at approximately Rs2.3 trillion. 

Credit: Independent News Pakistan (INP)