Sindh Unveils Rs 3.56 Trillion Tax-Free Budget Amid Deficit, IMF Concerns
The Sindh government has presented a Rs. 3.562 trillion tax-free budget for the fiscal year 2026-27, which projects a deficit of Rs. 36.9 billion. Chief Minister Murad Ali Shah, who also holds the finance portfolio, outlined total receipts estimated at Rs. 3.525 trillion, framing the budget as one of hope and public trust amid significant economic pressures.
The budget includes a 7% increase in salaries and pensions, a figure criticized as being lower than the 10% offered by the federal government and below the Pakistan People’s Party’s own calls for a 50% hike at the federal level. However, the provincial minimum wage was raised to Rs. 43,000 from Rs. 40,000, surpassing the federal minimum of Rs. 40,700.
Provincial revenues remain heavily reliant on federal transfers, which account for nearly 64% of total receipts. The budget has drawn scrutiny for projecting only Rs. 6 billion from agricultural income tax, a figure seen as violating the IMF’s push for equitable taxation of the sector. Furthermore, the projected deficit of Rs. 36.9 billion runs contrary to a reported agreement with the IMF for provinces to deliver a budget surplus.
Key long-term initiatives include developing Keti Bandar as a major economic hub and a significant expansion of the province’s public-private partnership portfolio, which has grown to Rs. 876 billion as of 2025.
