Murad Shah defends Sindh budget 2026-27, unveils development vision

KARACHI: 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.

Mr Shah said salaries and related employee expenses would account for Rs1.264 trillion during the next fiscal year. He added that ad hoc relief allowances granted in 2022 and 2025 had been merged into basic pay scales, while the minimum wage had been increased to Rs43,000 per month.

Murad Ali Shah said local governments would receive Rs155 billion, while grants to public sector universities had been allocated Rs48 billion. Overall grants to various institutions, including hospitals, universities and autonomous bodies, would amount to Rs686 billion.

He said debt servicing obligations had been estimated at Rs54.2 billion for the coming fiscal year.

Highlighting austerity measures adopted by his government, Mr Shah said non-development expenditure had been substantially reduced from Rs61.87 billion in the current year’s budget to Rs36 billion in 2026-27, reflecting the government’s commitment to fiscal discipline and efficient resource management.

Fiscal pressures and reduced development spending

Mr Shah said the largest component of provincial expenditure continued to be salaries and pensions. He announced that the ad hoc relief allowances (ARA) granted in 2022 and 2025 had been merged into basic pay scales, while the minimum wage had been raised to Rs43,000 per month.

He said grants to hospitals, universities and other public institutions would amount to Rs686 billion during the next fiscal year.

Due to resource constraints, the Annual Development Programme (ADP) had been reduced from Rs1.018 trillion last year to Rs720 billion for 2026-27. However, he stressed that the government had prioritised the completion of ongoing projects rather than launching new schemes.

“We are going to complete 2,056 ongoing schemes next year. There is no new development scheme in this budget,” he said, recalling that similar decisions had been taken in previous years without affecting public support for the government.

Read more: Sindh budget 2026-27 presented with 816 development projects for Karachi

The chief minister added that district-level development allocations had been limited to Rs15 billion, while Rs109 billion had been earmarked for projects under the PPP framework.

Keti Bandar Port among flagship PPP projects

Highlighting the government’s future development strategy, Mr Shah said the PPP leadership, including Asif Ali Zardari and Bilawal Bhutto Zardari, had directed the provincial government to move beyond small-scale projects and focus on transformative infrastructure initiatives.

A key project under consideration is the long-awaited Keti Bandar deep-sea port in the coastal district of Thatta.

The chief minister revealed that President Zardari had already discussed the project with Chinese stakeholders and that consultations with potential investors and companies had begun. He said the port would be developed under a public-private partnership arrangement, and the federal government would also be invited to participate.

“We have been instructed by our leadership to build Keti Bandar Port. It will be a game-changing project for Sindh and Pakistan’s maritime economy,” he said.

Mr Shah linked the vision to the legacy of former Prime Minister Zulfikar Ali Bhutto, who established Port Qasim, describing the proposed port as a continuation of that strategic thinking.

International Financial Centre and Green Data Infrastructure

CM Murad Ali Shah also announced plans to establish a Sindh International Financial Centre in Karachi, saying work had already commenced and three potential sites had been identified

“We intend to complete the project before the end of the present government’s term,” he said. He added that it would not be merely a building but would be equipped with all the required facilities, equipment, gadgets, and connectivity.

Green Energy Data Centre:

In another major initiative, Mr Shah announced the establishment of a Green Energy Data Centre, inspired by the development model adopted in Thar.
He said Sindh possessed abundant solar energy resources, but the federal government had been reluctant to purchase surplus electricity generated by the province. Consequently, the provincial government was exploring opportunities to sell renewable energy to international technology companies and data centre operators.

“This will be a game changer and position Sindh as a hub for green digital infrastructure,” he said.

Expanding solar access and agricultural reforms

Mr Murad Ali Shah said the government was distributing free solar home systems to the poorest households, while a separate financing programme was being developed for middle-income families unable to afford solar installations.

The scheme is being designed jointly by Sindh Bank and the Sindh Energy Department, enabling households to obtain solar systems through affordable financing arrangements.

The chief minister also announced legislation for Agricultural Collectives, aimed at helping small farmers pool landholdings and gain access to larger credit facilities, modern irrigation systems and mechanised farming equipment.

According to him, 93 per cent of Sindh’s farmers own less than 25 acres of land and therefore struggle to benefit from conventional agricultural financing programmes.

Recognition of Sindh’s PPP model

Mr Shah said Sindh’s public-private partnership initiatives had received international recognition and were increasingly being viewed as a model for other provinces.

He cited successful PPP projects including the Mai Bakhtawar International Airport, major bridges across the Indus River and the province’s mangrove restoration and carbon credit programmes.

He noted that federal officials had recently suggested that other provinces receive briefings from Sindh on its PPP framework and implementation mechanisms.

Water crisis and criticism of IRSA

Turning to the water situation, the chief minister expressed concern over severe shortages affecting Sindh.

He said the province was currently facing a 30 per cent water shortage compared to 11 per cent in Punjab, describing the situation as deeply unfair to Sindh’s farmers.

Mr Shah accused the Indus River System Authority of failing to accurately represent the situation and urged both federal authorities and the media to take notice of the growing crisis.

“This shortage is causing serious hardship to our farmers,” he said.

Infrastructure, governance and future outlook

Chief minister Murad Ali Shah said traffic on Karachi’s long-delayed University Road project would be restored by the end of July, attributing earlier delays largely to contractor inefficiency. He added that progress accelerated after the contract was handed over to the Frontier Works Organisation (FWO).

He also highlighted the completion of rehabilitation work at the Sukkur Barrage, where 44 gates had been replaced and modernised, extending the barrage’s operational life by an estimated 30 years.

Mr Shah said the government was pursuing anti-corruption measures, cancelling contracts where irregularities were detected and initiating recoveries from those found responsible.

“Some bad fish will not be allowed to spoil the entire pond,” he remarked.