KARACHI (Dunya) - Sindh Chief Minister Murad Ali Shah on Thursday said the province's budget had been prepared in accordance with constitutional provisions following consultations between the federal government, provincial administrations and political stakeholders.
Addressing a post-budget press conference, Shah said the Sindh government had unveiled a Rs3.562 trillion budget for the 2026-27 fiscal year against estimated receipts of Rs3.525 trillion, resulting in a projected shortfall of approximately Rs36.9 billion.
He noted that the budget does not introduce any new taxes and includes a seven per cent increase in salaries and pensions. The financial plan also allocates Rs720 billion for development projects and Rs13.2 billion for social protection initiatives.
The chief minister said Article 164 of the Constitution permits provinces to provide grants to the federation, adding that all four provinces had collectively extended support in the interest of national defence and unity.
Discussing the National Finance Commission (NFC) framework, Shah said the Federal Board of Revenue's collection target had been fixed at Rs15.264 trillion. Provincial governments are expected to receive up to Rs13.35 trillion under the agreed distribution.
He said any revenue generated beyond the benchmark would first pass through provincial allocations before being transferred to the federal government. Shah expressed optimism that the FBR would achieve its target, citing a 23 per cent growth in revenue collection.
According to the chief minister, Sindh has faced a Rs441 billion gap in federal transfers up to May, along with a Rs52 billion shortfall in provincial receipts. These factors have contributed to an overall fiscal gap of around Rs300 billion.
Despite financial pressures, he said the province continued to spend heavily on development schemes and relief measures, including support for farmers, fuel and electricity subsidies, and expenses related to the Gul Plaza incident.
Shah said government assistance to the agriculture sector had helped increase wheat production to 4.9 million tonnes, compared with 3.5 million tonnes in the previous year.
He further stated that Sindh expects to receive Rs2.263 trillion in federal transfers and has set a provincial revenue target of Rs456 billion. Total provincial revenues are projected at Rs3.083 trillion, while the overall budget size stands at Rs3.525 trillion.
The chief minister said Rs1.264 trillion had been earmarked for salaries and pensions. He added that previous relief measures introduced in recent years would raise the minimum wage to Rs43,000.
Allocations include Rs155 billion for local governments and Rs48 billion for universities. In the health sector, funding has been reserved for major institutions, including SIUT, NICVD, SICVD, Indus Hospital, SICH, ChildLife Foundation and the Patient Aid Foundation.
Shah said foreign-assisted projects are expected to receive around Rs225 billion, while development assistance from international financial institutions and donor agencies is projected at about Rs64 billion.
He said the government's financial strategy seeks to maintain development spending and public services while ensuring fiscal discipline amid economic challenges.