KARACHI: Sindh Chief Minister Syed Murad Ali Shah presented a Rs3.56 trillion budget for FY2026–27 on Wednesday, without imposing any new taxes and announcing a 7 per cent increase in government employees’ salaries and pensions.

The session was delayed due to a ruckus created by lawmakers of the Muttahida Qaumi Movement-Pakistan (MQM-P). MPA Ali Khurshidi said the party was boycotting the session because the opposition had not been consulted beforehand.

CM Murad said that in the upcoming fiscal year, the government’s goal was to “maintain fiscal discipline, strengthen public finances, and sustain development momentum during a very challenging year”.

For development, the provincial government has allocated Rs720.39 billion.

Total tax receipts, including sales tax, are projected at Rs690bn for the upcoming fiscal year. Provincial non-tax receipts are projected at Rs85bn.

For capital receipts, local repayments are projected at Rs7.54bn, while bank borrowing is estimated at Rs60.8bn, bringing total capital receipts to Rs68.34bn.

Among other inflows, the Sindh government expects Rs256bn from the Foreign Project Assistance fund, along with Rs64.33bn from the federal Public Sector Development Programme. It is also projected to receive Rs8.14bn in foreign grants.

The provincial budget also allocated Rs402bn for the health sector, Rs185bn for transport and communication, Rs103bn for irrigation, Rs49bn for sanitation, and Rs347.6bn for local government and service delivery.

Furthermore, in FY2026-27, the Sindh government is allocating Rs222bn for law and order.

Murad also referred to the deadly Gul Plaza fire, saying that the provincial government had approved one of the largest relief packages in response to the incident, amounting to Rs8.45bn, including compensation of Rs10 million for the family of each deceased victim.

The government also allocated Rs72.8bn for the agriculture, livestock and fisheries sector. The energy, climate and environment sector would receive Rs84bn.

The Sindh government is allocating Rs3.5bn for the minorities and women development sector, while the chief minister added that this allocation is protected from expenditure rationalisation measures.

For people with disabilities, the government has set aside Rs22.8bn, which would likewise remain a fully protected allocation, according to the chief minister.

Furthermore, the provincial government has proposed Rs26.4bn for the social protection sector.

“Every rupee has been directed towards projects that deliver the highest social and economic return for the people of Sindh,” the chief minister said in the assembly session.

He added that the budget is “a carefully prioritised investment strategy designed to protect human development, strengthen infrastructure, improve connectivity, enhance water security, promote economic growth and create opportunities for future generations.”

The budget also proposed a reduction in sales tax on education support services to 5pc. The tax rate on insurance agents and brokers will be reduced from 5pc to 2–3pc, according to the budget speech.

The provincial government also increased the minimum wage to Rs43,000. Chief Minister Murad Ali Shah said the minimum pay of Grade 1 government employees would be aligned with the revised minimum wage.

LAHORE: Punjab Finance Minister Mujtaba Shuja ur Rehman on Monday presented a surplus budget of Rs5.903 trillion (5903 billion) for the financial year 2026-27 in the provincial assembly amid strong protest by the opposition.

“We did not make hollow promises we delivered what we committed”, said the finance minister.

Punjab Chief Minister Maryam Nawaz was also present in the House.

This budget represented an increase of 10.7 per cent compared to the current fiscal year. Current expenditures are estimated at Rs1,962.93 billion, which is 3.1 per cent lower than those of the ongoing fiscal year. This reduction is primarily attributable to the government’s austerity drive and prudent fiscal management measures.

In the next fiscal year, a 7 per cent increase in the salaries of government employees is being proposed. As a result, salary expenditure will rise by only 1.4 per cent to Rs. 638.93 billion, reflecting the effectiveness of the government’s sound rightsizing and financial management policies.

Furthermore, a 3.5 per cent increase in pensions for retired government employees is being proposed for the next fiscal year. Consequently, the province’s pension expenditure is projected to reach Rs. 500.12 billion.

Read More: Aurangzeb says Budget 2026-27 delivers on promise to move economy from stability to growth

In order to provide public services at the grassroots level, a substantial allocation of Rs. 803.88 billion is being proposed for local governments under the Provincial Finance Commission (PFC) Award, reflecting an increase of 5.2 per cent.

Service delivery expenditure is estimated at Rs. 783.62 billion, of which Rs. 578.62 billion is earmarked for the routine operational expenses of government institutions. Owing to the government’s effective policy measures and prudent financial management, this amount is 5.1 per cent lower than that of the previous fiscal year.

Similarly, it is proposed that Rs. 679.01 billion be allocated under the head of current capital expenditure as part of the budget for the forthcoming fiscal year.

Under the leadership of CM Maryam, despite prevailing economic challenges, the government has ushered in a new era of development through strong fiscal discipline, effective planning, and people-centric policies.

The landmark public welfare initiatives introduced in the Fiscal Year 2025–26 budget are a practical manifestation of this vision. It is also noteworthy that, under the development budget for FY 2025–26, a total of 2,638 development projects with an estimated cost of Rs. 1,150 billion have been completed. This represents a 16 per cent increase over the development expenditures of Fiscal Year 2024–25.

The finance minister further said that he was pleased to inform this House that, owing to a substantial increase in provincial revenues, the efficient utilisation of resources, and the implementation of an expenditure rationalisation policy, an amount of Rs. 752 billion was being allocated for the development budget.

With regard to the provincial economy, transfers from the Federal Government to Punjab under the NFC Award are estimated at Rs. 4,390.94 billion, representing an increase of 8.1 per cent over the previous fiscal year.

At the same time, the Government of Punjab has adopted a strategy aimed at enhancing the province’s own-source revenues. In this context, a target of Rs. 1,209.86 billion has been set for provincial revenue collection in the upcoming fiscal year.

Under this framework, the Punjab Revenue Authority has been assigned a revenue collection target of Rs. 528.50 billion, which is 55.4 per cent higher than the target for Fiscal Year 2025–26.

Similarly, the Board of Revenue has been given a tax collection target of Rs. 86.19 billion. For the next fiscal year, the Excise and Taxation Department has been assigned a revenue target of Rs. 124 billion, reflecting a significant increase of 77 per cent compared to the current fiscal year.

Provincial non-tax revenues are estimated at Rs. 461.17 billion, which is 52 per cent higher than the corresponding figure for the previous fiscal year. These revenue targets will further strengthen the province’s fiscal self-reliance and ensure the availability of resources for development priorities.

“We fully recognise that meaningful investment in productive sectors and public welfare initiatives is not possible without a substantial increase in provincial revenues. Under the leadership of CM Maryam, and through the dedicated efforts of the finance department and all provincial departments, it is expected that 99 per cent of the provincial revenue target will be achieved by the end of Fiscal Year 2025–26,” he said.

Overall, out of the combined tax and non-tax revenue target of Rs. 828 billion, revenues amounting to Rs. 820.16 billion are expected to be realised.

This includes revenue collection of Rs. 370 billion by the Punjab Revenue Authority against a target of Rs. 340 billion, and Rs. 77.22 billion by the Excise and Taxation Department against a target of Rs. 70 billion.

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At this juncture, the finance minister said he considered it important to clarify that our government had achieved the highest level of own-source revenue collection in the history of Punjab without imposing any additional tax burden on the public. This achievement has been made possible through a historic expansion of the tax base and the introduction of positive reforms in tax laws.

Opposition protest

As the budget speech started, the opposition lawmakers assembled near the chair of the Speaker of the Punjab Assembly. They tore the budget books and chanted slogans against the budget.

Earlier, CM Maryam approved the budget after the provincial cabinet formally endorsed the document at its 35th meeting.

Addressing the cabinet meeting, Maryam expressed gratitude to Allah for presenting her third provincial budget and lauded the efforts of Senior Minister Marriyum Aurangzeb, provincial finance minister, Information Minister Azma Zahid Bukhari, Chief Secretary Zahid Akhtar Zaman, Finance Secretary Mujahid Sherdil and the entire team involved in preparing the budget.

She said the budget for FY 2026-27 had been prepared without imposing any new taxes and was focused on public welfare, development and prosperity. She described it as a “budget of hope” aimed at delivering relief to citizens through the province’s own resources.

Maryam said the government had made every possible effort to provide maximum relief to the people and minimise the financial burden on them despite economic challenges and prevailing global conditions.

CM Punjab added that although the province had to allocate a substantial amount as its share to the federation, the government remained committed to safeguarding public interests.

She further directed the Punjab Revenue Authority (PRA) to take effective measures to enhance revenue generation and strengthen the province’s financial capacity. She appreciated the collective efforts of the cabinet members and officials, saying the entire team had worked as one unit to prepare a people-friendly budget.

Maryam expressed confidence in the government’s performance, saying that she hoped the budget would meet the aspirations of the people as in previous years.

She also prayed for the ability to continue serving the people of Punjab with sincerity and dedication

ISLAMABAD: Defence Minister Khawaja Asif on Tuesday said Pakistan’s economy had moved “out of the ICU” and is now showing signs of recovery, adding that the country could achieve 6–7% growth in the coming years.

Addressing the National Assembly, the defence minister said, “Whatever time we are living in is a time of celebration; we also have successes,” he said, adding that in the first budget the Pakistan Muslim League-Nawaz’s government tabled three years ago, the economy was “insolvent” before being stabilised with support from the International Monetary Fund on “strict conditions.”

“We were suffering, but from insolvency we are now solvent,” he said, adding that the economy was now “breathing” after a period of severe stress.

Asif said he was not claiming that Pakistan had fully recovered, but argued that indicators pointed towards gradual improvement. “Our trajectory shows that in one or two years Pakistan will reach a growth rate of 6–7%,” he said.

He said inflation and global energy prices remained linked to international markets, adding that expectations of lower domestic fuel prices were constrained by global trends. “When people say petrol prices should come down, do be aware that prices in the international markets have not come down yet,” he noted.

Turning to taxation, the defence minister said the current system contained multiple layers of levies. “We know there are problems with the levy, there are multiple taxes—25 different types— and they have been built into every purchase,” he said.

Asif further stated that the broader goal should be to expand the tax base rather than increase pressure on existing taxpayers. “The only way is that all 250 million people pay taxes,” he said, adding that people often find ways to avoid taxation. “We need to create an atmosphere in which people pay taxes with pride,” he added.

US-Iran

The defence minister hailed Pakistan’s role in helping bring about the recent understanding between the United States and Iran, saying the development had enhanced the country’s standing internationally and should be celebrated as a national achievement.

Asif congratulated the nation on what he described as a major diplomatic success and praised the efforts of Pakistan’s civil and military leadership. “Pakistan’s role was recognised in the world,” he said, adding that Pakistan had played a role in helping achieve the breakthrough.

“These moments in a country’s life come after centuries and become golden moments,” he told lawmakers. “No matter what complaints exist, these moments of jubilation should be celebrated as a nation, as one entity.”

The minister said he would like to thank “the field marshal and the entire team that was working”, adding that “the whole country should thank them”. “They steered a situation that was impossible and made the impossible possible,” he said.

Asif noted that Indian Prime Minister Narendra Modi had congratulated US President Donald Trump on the development but had not acknowledged Pakistan’s role.

Turning to regional implications, the defence minister said recent improvements in Pakistan-Iran relations and the easing of sanctions on Tehran could create economic opportunities for Pakistan.

“With Iran, our relations have seen good developments in the past few months. Sanctions are being relaxed, their oil and gas exports [are increasing],” he said. “Pakistan can benefit immensely from this change, and the biggest beneficiary will be Balochistan,” he added. “Let’s see how we can proceed in this direction.”

Local politics

The defence minister speaking on the security situation in Balochistan said that the crisis in the province “was not born yesterday” and that responsibility for it was shared across political forces over many decades.

“Many colleagues have rightly discussed the situation in Balochistan. This situation was not born yesterday; many people have contributed to it,” he said, adding that he would avoid naming individuals because “it would become partisan”.

He further said terrorism in Balochistan and K-P should be treated as a national issue rather than a party issue. “If roads are not safe in Balochistan, if terrorists have made highways unsafe and acts of terrorism occur, I understand this is the collective responsibility of this House,” he said.

He rejected the idea that political parties should trade accusations over the crisis. “Should I accuse them or should they accuse us?” he asked, adding that the roots of the problem stretched back to the 1950s, when agreements made with tribal communities were later broken. “We need a collective solution. If Balochistan faces terrorism, then responsibility is collective, and there must be a solution that the people of Balochistan accept,” he said.

Asif also spoke emotionally about the human cost of the insurgency and counterterrorism conflict, saying he had attended “21 funerals in the last few days”. “Small children are being orphaned. People are told, just days after their weddings, that they must report to the border,” he said, adding that many personnel request transfers because they fear postings to Balochistan and conflict zones.

“These soldiers standing on the borders of Balochistan and K-P are young men with families. Their sacrifices will bear fruit and will not be wasted,” he said.

The minister also criticised what he described as hypocrisy across the political spectrum regarding the role of the establishment. “We complain that power centres have shifted elsewhere, but they have shifted because of us,” he said.

Asif said, “I am given establishment taunts. Tell me one party that is innocent.” He added that the soldiers being killed in attacks should not be reduced to political labels. “These are not martyrs of a party; they are martyrs of the army, which we call the establishment,” he said.

The defence minister urged lawmakers to speak “the language of the federation” rather than narrow provincial or partisan politics. “This is the whole of Pakistan’s House,” he said. “Do not come here with political angling and posturing that makes the common man lose trust in this House.”

Asif also accused political parties of selectively forgetting their own dealings with the establishment while criticising opponents for similar conduct.

Referring to former National Assembly speaker Asad Qaiser, he said he had attended legislative meetings at Qaiser’s residence during the Pakistan Tehreek-e-Insaf’s tenure, where politicians from the Pakistan Peoples Party (PPP) and individuals linked to the intelligence services were present.

“Asad Qaiser, whom I respect, in his room I attended meetings at his house on legislation. PPP would sit there, ISI people sent by General [retd] Faiz would sit there, and they would monitor our conversations and, where they wanted, they would decide our direction,” Asif alleged.

The defence minister claimed he was disclosing this to “lower the burden on my conscience”, arguing that politicians often ignored their own past conduct when attacking rivals.

“When you pound your chest and taunt us, do you forget that under your roof the Anti-Money Laundering Bill and NAB law were discussed there under the watchful gaze of people sent by Gen Faiz at that time?” he stated, adding, “This is our problem. In politics, there are grey areas, but we expand them with new levels of hypocrisy.”

Asif was referring to Faiz Hameed, who is a retired three‑star general of the Pakistan Army’s Baloch Regiment and served as the director general of the Inter‑Services Intelligence (ISI), Pakistan’s premier intelligence agency, from June 2019 to 2021.

Hameed, on December 11, was sentenced to 14 years of rigorous imprisonment by a Field General Court Martial after being found guilty on multiple charges after 15 months of proceedings. He was tried on four charges, including engaging in political activities, misuse of authority and government resources, violation of the Official Secrets Act in a manner “detrimental to the safety and interest of the state,” and causing wrongful loss to individuals.

Afghanistan

Responding to criticism that Islamabad had not sufficiently engaged with Kabul, Asif said that Pakistan had repeatedly engaged with the Afghan Taliban multiple times but had failed to secure guarantees that Afghan territory would not be used for attacks inside Pakistan.

Asif said that senior political, military and intelligence officials had held extensive talks with Taliban authorities over several years. “Lots of people complained that we should negotiate with them, and maybe our approach is impersonal, that we are not directly approaching them,” he said. “But this Afghanistan issue is directly linked to terrorism. Whether in Balochistan or Khyber-Pakhtunkhwa, the origin of the terrorism comes from Afghanistan.”

Rejecting suggestions that Pakistan had not pursued dialogue, the minister said he had personally travelled to Afghanistan twice as part of high-level delegations. “This complaint that we didn’t talk — I went twice myself. Both times senior delegation members were there, and I had the DG ISI with me,” he said. “They would agree to everything but would refuse anything in writing,” he added.

The minister disclosed that Afghan authorities had sought financial assistance from Pakistan during the discussions. “They asked us for $10 billion. We agreed, but we told them that terrorists residing in Afghanistan will not come back to Pakistan,” he said. “Apart from Kabul, I also met them in Turkey and Qatar. Negotiations would go on day and night, with high-powered delegations, but there was no conclusion,” he added.

“We were ready to do anything, but we wanted a guarantee that their land would not be used against us. That’s all we wanted.” The defence minister said Pakistan had exhausted diplomatic channels in seeking cooperation from the Taliban government.

Asif also reflected on Pakistan’s role in past regional conflicts, arguing that decisions taken during the Cold War and the US-led war in Afghanistan had left lasting consequences. “I don’t say that our policies of the 1980s and the first two decades of this century, when we were American proxies, were correct,” he said. “We thought we would win a lottery by being an American proxy. Pakistan became a battleground,” he added.

The minister further said that those [Americans] who “came here used us and then went home,” leaving behind their arms and terror. “We are still suffering the consequences, and God knows for how long we will continue to suffer,” he added.

Calling for a practical approach, the minister said Pakistan remained open to further engagement but expected tangible outcomes. “My companions should conduct talks and go there. We are ready, but don’t come back without results,” he said. “Two generations have already suffered, and it seems the coming generations will also suffer.”