Sindh Assembly approves FY26 budget

Business Recorder

12 hours ago

KARACHI: The Sindh Assembly on Wednesday approved the provincial budget for the fiscal year 2025–26, amounting to Rs3.45 trillion, along with Rs156.069 billion in supplementary grants for the outgoing year.
Marking a 13 percent increase from the previous year's outlay, the budget places significant emphasis on social protection, infrastructure development, economic reforms, and targeted relief for low-income groups.
Chief Minister Syed Murad Ali Shah presented the Sindh Finance Bill 2025, which aims to rationalise taxes and reform financial laws to reflect changing economic realities. The budget introduces major tax relief measures, including the abolition or restructuring of six key levies.
Among these, professional tax has been eliminated, offering Rs5 billion in direct relief to salaried individuals and small businesses. Entertainment duty has also been removed to promote cultural activities.
Additionally, revenue fees, such as those for land transfer, certified copies, sales certificates, solvency, and succession documents have been slashed by 50 percent. Annual tax on commercial vehicles has been reduced to Rs1,000, while third-party motor insurance stamp duty has been capped at Rs50, and motorcycles will be exempted from mandatory insurance starting FY 2025–26.
The provincial government has also abolished cotton fees in response to a 30.7 percent decline in the agricultural produce and removed the drainage cess to mitigate the impact of erratic weather and poor crop yields.
Amendments or repeals were approved for seven laws, including the Stamp Act (1899), Motor Vehicles Act (1939), Sindh Entertainment Duty Act (1958), Sindh Motor Vehicle Taxation Act (1958), and specific sections of the Sindh Finance Act (1964), the Sindh Sales Tax on Services Act (2011), and the Sindh Local Government Act (2013).
The budget further raises the sales tax exemption threshold for businesses from Rs2.5 million to Rs5 million, offering an estimated Rs400 million in relief. Small enterprises with an annual turnover of up to Rs4 million will now be exempt from sales tax. The government expects that the removal of local cess will help lower production costs and boost agricultural profitability.
Murad Ali Shah highlighted that total expenditures for FY 2025–26 are projected at Rs3.45 trillion. Of this, 39 percent is allocated to salaries, 62 percent to current revenue expenses (Rs2.15 trillion), 30 percent to development expenditure (Rs1.018 trillion), and Rs281.7 billion to capital expenses. Grants to local and autonomous bodies constitute 29 percent, non-salary operations and maintenance 19 percent, and pensions 13 percent.
He noted that, despite a 3.6 percent drop in last year's budget, Sindh expects to receive Rs3.111 trillion in revenues, marking a 21.4 percent rise from revised estimates. The province anticipates an average annual revenue growth of 12.5 percent over the next three years. If the Federal Board of Revenue (FBR) meets its Rs14.131 trillion target, Sindh expects to receive approximately Rs269 billion from the federal divisible pool.
Major allocations include Rs42.2 billion for public universities, Rs10.4 billion for medical education, and Rs5 billion for the 'Inclusive City' initiative supporting persons with disabilities. Other allocations include Rs6.6 billion for the Sindh Institute of Child Health & Neonatology, Rs5.2 billion for ambulance services under the Sindh Emergency Health Services, and Rs10 billion for a new hospital in Larkana. The SIUT has been allocated Rs21 billion, NICVD Rs23 billion, and PPHI Rs16.5 billion.
In terms of infrastructure and green energy, Rs10 billion has been earmarked for the Dumloti–DHA water pipeline, Rs3.1 billion for the Hub Canal, and Rs25 billion for green energy projects. Public health initiatives aligned with the Sustainable Development Goals (SDGs) have received Rs45 billion.
Agriculture and social support programs include Rs8 billion for the Benazir Hari Card, Rs1.8 billion for livestock breeding, and subsidies for solar tube-wells, drip irrigation systems, and super seeders. Low-income housing projects will receive Rs2 billion, while Rs2 billion has been allocated to the Sindh Peoples Support Program. Additional support includes Rs200 million for orphans and widows, and Rs500 million per initiative for women's empowerment in agriculture and SMEs. The budget also doubles stipends for persons with disabilities and increases assistive devices distribution from 20,000 to 40,000 units.
Speaking after the budget's passage, Murad Ali Shah extended congratulations to all members of the Sindh Assembly, including opposition legislators, and expressed gratitude to his party leadership and cabinet. He noted with appreciation that every member of the opposition participated in the budget debate, calling it a healthy sign of democratic engagement.
Murad Ali Shah remarked that Sindh belongs to all, and love for the province should rise above political point scoring. 'It is heartening that another budget has been passed by this Assembly. On this important occasion, I thank the party leadership, the cabinet, and all members of this House who took part in the process,' he said.
The Chief Minister added that wherever a majority exists, the government has the mandate to pass a budget, but meaningful suggestions are welcome from all quarters. 'I have speeches from every member; some have made very constructive proposals, and we will consider them,' he said, adding that future efforts would include digitizing cut motions in the budget to ensure better tracking and evaluation.
He praised the relentless work of the Sindh Finance Department in preparing the budget, highlighting that the department staff worked late nights for weeks without breaks. Murad acknowledged the contribution of P&D's Najam Shah and announced bonuses for both Finance Department personnel and the staff of the Assembly for their exceptional efforts.
Opposition Leader Ali Khurshidi also addressed the House, extending his congratulations on the budget's approval and expressing hope that the government would work to overcome its shortcomings. 'The opposition has played its part, and I commend all opposition members as well as the government,' he said.
Jamaat-e-Islami (JI) MPA Muhammad Farooq congratulated all members, noting that democratic proceedings enhance trust in governance. He appreciated the Chief Minister's openness to criticism.
PTI's Shabbir Qureshi said both government and opposition members represented their constituencies well during the budget session, praising ministers Sharjeel Inam Memon and Zia Lanjar for their contributions. 'Murad Ali Shah showed grace in his final speech. I hope this marks the beginning of a new era of development in Sindh,' he said.
Senior Minister Sharjeel Inam Memon lauded the role of journalists and cameramen who worked under challenging conditions throughout the session. 'This time, the budget session ended on a positive note, unlike in previous years. Everyone deserves congratulations for that,' he remarked.
In his closing remarks, Murad Ali Shah called the budget a 'responsible, inclusive, and forward-looking financial plan' that promotes equitable development and responds to the economic challenges faced by the people. 'This budget is a roadmap for recovery, opportunity, and social justice in Sindh,' he said.
Copyright Business Recorder, 2025