Sindh’s development question

With development spending slashed by 30 per cent despite glaring infrastructure deficits and current expenditure rising by 20pc to sustain an already bloated and inefficient provincial bureaucracy, the proposed Rs3.5 trillion Sindh Budget, which projects a Rs37 billion deficit, is anything but forward-looking.

The current budget reinforces the perception that the PPP has diluted many of its core values to align with the country’s prevailing power structure, making it increasingly difficult to distinguish the party from its rivals. What still sets it apart is its legacy of sacrifices for democracy, its contribution to the Constitution and a more equitable distribution of resou­rces among provinces, and its historic role in mobilising ordinary citizen to stand up for their rights.

Chief Minister Murad Ali Shah, who also holds the finance portfolio, presented the budget — the 28th since the PPP came to power in Sindh in 2008 and retained it through three successive elections. The party’s enduring political dominance in the province appears to have bred a degree of complacency. Despite limited progress on key development indicators, the government continues to prioritise subjects that do not necessarily align with Sindh’s most pressing economic and social needs.

Sindh’s development trajectory has lagged behind that of Punjab for years and even Khyber Pakhtunkhwa in some cases, while its development outcomes remain below potential. According to regionally disaggregated data from the 2023 Population and Housing Census, the province’s literacy rate has remained virtually unchanged since 2019, standing at 57.5pc, compared to 66.3pc in Punjab and 61pc in Khyber Pakhtunkhwa. School enrolment is equally concerning, with only 53pc children enrolled, far below Punjab’s 73pc in Punjab and KP’s 62pc.

After 27 past PPP budgets carrying similar promises, the lack of meaningful progress raises a simple question: why should the public believe this time will be any different?

Despite receiving significantly more resources following the National Finance Commission Award, Sindh has struggled to translate fiscal gains into broad-based social and urban development. Rather than adding more cities to the country’s top tier, it saw Sukkur fall out of the 10 largest cities, leaving only Karachi and Hyderabad in that category. From maternal and child health to nutrition and access to basic amenities, Sindh’s performance continues to fall short of public expectations.

A persistent pattern across Pakistan is the underutilisation of development funds, whether by design or due to weak implementation. Whenever unbudgeted expenditure arises, development allocations are often the first casualty. Even when funds are not formally cut, delayed releases and bureaucratic bottlenecks frequently result in underutilisation of the Annual Development Programme. In the outgoing fiscal year 2025-26, Sindh had spent only about 70pc or Rs520bn of its development budget by May, according to available information.

Last week, while presenting the budget in the Sindh Assembly, Chief Minister Shah said the budget reaffirmed his party’s commitment to inclusive development, poverty reduction and public welfare. “We will continue to serve the people under the guidance of the PPP leadership,” he told the House.

A more convincing case would have required an honest explanation of why a strategy that has repeatedly underperformed in the past is expected to succeed now. After 27 past PPP budgets carrying similar promises, the lack of meaningful progress raises a simple question: why should the public believe this time will be any different?

‘While federal transfers have expanded Sindh’s budget by more than 800pc since the 7th NFC, the local governments’ share has fallen from 16pc of provincial revenues in 2011 to about 5pc in the current budget

In the proposed budget, the Sindh government has increased the minimum wage by Rs3,000, from Rs40,000 to Rs43,000 per month. It has also followed the federal government’s lead by raising the salaries and pensions of provincial employees by 7pc. However, weak enforcement of the minimum wage law and salary and pension increases that remain below the projected inflation rate are likely to limit the real benefits for the intended beneficiaries.

By contrast, a reduction in tax rates on agricultural income and concessions extended to brokers and selected service providers are expected to yield far greater gains for large landowners and better-off segments of the service sector.

Commenting on the budget, Younus Dagha, former Sindh minister, federal secretary and current Chairman, Policy Research and Advisory Council at the Karachi Chamber of Commerce and Industry, highlighted what he called a persistent contradiction with the spirit of democratic devolution. He argued that, as in previous years, the budget redirects resources that belonged to local governments before the 18th Amendment and the 7th NFC Award back to provincial control.

“While federal transfers have expanded Sindh’s budget by more than 800pc since the 7th NFC, the local governments’ share has fallen from 16pc of provincial revenues in 2011 to about 5pc in the current budget,” he said.

On Karachi’s development allocation, Mr Dagha termed it grossly inadequate even on a population basis. With roughly 37pc of Sindh’s population, Karachi’s share of the Rs720.4bn development outlay should be at least Rs266bn, excluding its disproportionately large contributions to provincial revenues, industry, ports, and employment.

He also criticised the continued diversion of the Infrastructure Development Cess (IDC) — which has generated nearly Rs1tr since 1994 — into the provincial consolidated fund instead of a dedicated infrastructure account. Further, he noted that withholding local governments’ one-sixth share of GST transfers since 2010 has deprived them of over Rs1tr, including more than Rs200bn annually for Karachi alone.

Published in Dawn, The Business and Finance Weekly, June 22nd, 2026 ...