Sindh Government Announces Record Development Budget for FY26

The Sindh government has earmarked an unprecedented development budget exceeding one trillion rupees for the upcoming fiscal year (FY26), marking the highest allocation in the province’s history, despite prevailing financial constraints.

During his FY26 budget address on Friday, the Chief Minister of Sindh, Syed Murad Ali Shah, emphasized that the Annual Development Programme (ADP) for FY26 strategically balances economic responsibility with targeted progress. He affirmed the Sindh government’s dedication to fostering inclusive and climate-conscious development aligned with enduring objectives, with a strong emphasis on social sectors, resilience, and fairness.

According to the announcement, the allocation for provincial development expenditure has seen a 6 percent increase, rising from Rs 959.1 billion in FY25 to Rs 1.018 trillion for the next fiscal year. The development outlay for the approaching fiscal year surpasses both actual spending and revised budget projections for the current fiscal year by 24 percent, which stood at Rs 817.2 billion.

The total development expenditure encompasses Rs 520 billion for the Provincial ADP, Rs 55 billion for the district ADP, Rs 366.7 billion for Foreign Project Assistance, and Rs 75.58 billion for federal PSDP schemes.

The Chief Minister stated that despite financial pressures, the ADP for FY26 has seen a modest increase to Rs 1.018 trillion, underscoring the government’s commitment to sustaining development while prioritizing efficiency, equity, and economic recovery.

The proposed allocations indicate a shift toward a climate-resilient, inclusive, and regionally balanced development agenda, in accordance with Sindh’s long-term vision. Out of the 1,777 ongoing schemes funded in FY25, 1,494 schemes, or 84 percent, are slated for completion within the current fiscal year.

Special Initiatives proposed for FY26 include:

  • New development initiatives: Rs 15 billion
  • Rehabilitation of Flood-Damaged Infrastructure: Rs 12 billion
  • Renewable Energy Projects: Rs 25 billion
  • Karachi Urban Infrastructure Development: Rs 12 billion
  • CSR-2024 Cost Impact: Rs 15 billion
  • SDG-Aligned Development: Rs 45 billion
  • Divisional HQ City Uplift: Rs 7.5 billion

Shah mentioned that Sindh initially aimed for an ADP size of Rs 595 billion based on departmental requests. However, due to an expected shortfall in federal transfers, the Sindh Government reduced the ADP to Rs 520 billion, marking a 20 percent decrease. Consequently, only 475 new schemes are proposed in ADP FY26, focusing on high-priority areas such as flood rehabilitation, renewable energy, development in five less-developed districts, uplift of divisional headquarters, and clean water and sanitation.

A targeted 20 percent increase is proposed for social and productive sectors, while allocations for other departments remain unchanged. The budget allocations for key sectors for the next financial year are as follows:

  • Education: Rs 96.7 billion
  • Health: Rs 45.4 billion
  • Irrigation: Rs 80.6 billion
  • Agriculture: Rs 132.79 billion
  • Energy: Rs 155.2 billion
  • Livestock: Rs 11.25 billion
  • Fisheries: Rs 23.1 billion

As part of its development strategy, the Sindh government intends to launch a diverse range of new initiatives across sectors that impact the lives of countless individuals. These initiatives span from youth empowerment and healthcare accessibility to climate-resilient infrastructure, sustainable energy solutions, and community development projects.

The Chief Minister stated that the Government of Sindh has created ADP 2025-26, leveraging the development landscape of the previous FY25 while addressing emerging challenges and strategic development priorities. The FY25 ADP was characterized by fiscal consolidation, emphasizing post-flood reconstruction, completion of ongoing schemes, and safeguarding core development functions amidst rising costs and limited federal transfers.

No fresh initiatives were introduced during FY25, highlighting the government’s focus on fiscal responsibility and timely project completion.

Under the Flood Recovery to Resilience program, the government is transitioning from infrastructure restoration in FY25 to resilience-building investments in FY26, including renewable energy and water conservation systems.

While 1,494 schemes are projected to be completed in FY25, approximately 475 new schemes have been launched for FY26. These new schemes have been carefully chosen and are supported by increased counterpart funding and policy alignment.

The Sindh government is committed to a structured development process that ensures developmental activities proceed even during economic downturns. It is because of this planned approach that the present fiscal year has witnessed record development expenditure.

The Chief Minister of Sindh reported that last year, Sindh voiced concerns over the Federal Government’s reluctance to disburse the promised amount of Rs 52.912 billion in Federal PSDP for 19 schemes in 2024.

However, due to the strong intervention of PPP Chairman Bilawal Bhutto Zardari, the Sindh Government has received Rs 41 billion against the committed amount this year. The revised estimates for FY25 for provincial development expenditure stand at Rs 846.9 billion, including Rs 392.7 billion for Provincial ADP, Rs 55 billion for district ADP, and Rs 296.2 billion for Foreign Projects Assistance (FPA).

For development expenditure, the Sindh government released Rs 666 billion, with approximately Rs 590 billion expected to be utilized by the end of the current fiscal year. This fiscal year will see the highest development expenditure in the province’s history, with over 1,400 development schemes completed, also a record number.