The Punjab government on Monday presented its annual budget for fiscal year 2025-26, unveiling a record-breaking total outlay of Rs. 5.33 trillion, with no new taxes imposed.
Framed as a “people-friendly” and “development-focused” plan, the budget aims to deliver wide-ranging public welfare while achieving a targeted surplus of Rs. 740 billion, aligning with federal fiscal consolidation targets and IMF obligations.
No new taxes
Punjab Finance Minister Mujtaba Shujaur Rehman, presenting the budget in the provincial assembly, stressed the government would not introduce any new taxes. Instead, he said, the focus remains on expanding the tax net and improving tax collection efficiency.
Punjab’s revenue target has been set at Rs. 828.2 billion, including Rs. 525 billion from taxes and Rs. 303 billion from non-tax sources. The Punjab Revenue Authority has been tasked with collecting Rs. 340 billion, while property tax and agriculture income tax will also be enhanced through administrative reforms.
Development program
A key highlight of the budget is the Rs. 1.24 trillion Annual Development Program (ADP), 47% higher than last year. The ADP includes funding for over 850 projects across various sectors, with allocations of Rs. 335.5 billion for infrastructure, Rs. 120 billion for road construction and repair, Rs. 38 billion for irrigation, Rs. 145 billion for urban development, and Rs. 25 billion for public buildings.
Foreign-funded projects have been allocated Rs. 171.7 billion.
Health and education
The health sector has received a significant boost with an allocation of Rs. 630.5 billion, including Rs. 181 billion for development and Rs. 450 billion for current expenditures.
Key health projects include the Nawaz Sharif Medical District in Lahore (Rs. 109 billion) and the Nawaz Sharif Institute of Cancer Treatment and Research (Rs. 72 billion). The government would provide Rs. 79.5 billion worth of free medicines, while burn units in Bahawalpur, Multan and Rahim Yar Khan would also be established at a cost of Rs. 4 billion.
In the education sector, the budget allocates Rs. 811.8 billion, including Rs. 148 billion for development. Major initiatives include Rs. 15 billion for Honhaar Scholarships, Rs. 15 billion for the laptop distribution program, Rs. 40 billion for school upgrades, Rs. 5 billion for special education, and Rs. 25 billion for higher education.
Subsidies
The budget includes Rs. 165 billion under the head of subsidies, aimed at easing the burden on low- and middle-income groups. Key allocations include:
– Rs. 47 billion for the agriculture sector, supporting fertilizer subsidies, mechanization, and interest-free loans
– Rs. 25 billion for the Ramzan Package, ensuring essential food items at controlled rates
– Rs. 15 billion for transport sector subsidies, including student fare discounts and support for public transport fleets
– Rs. 79.5 billion earmarked for free medicines and medical support to patients at public hospitals
– Rs. 20 billion in grants for municipal services improvement in urban and rural areas
– Rs. 70 billion in social protection initiatives, including income support, health insurance expansion, and poverty alleviation schemes
Salaries and pensions
The government has announced a 10% increase in salaries for government employees and a 5% hike in pensions. Additionally, the minimum monthly wage has been increased from Rs. 37,000 to Rs. 40,000, providing much-needed relief amid rising living costs.
The budget also allocates Rs. 411 billion for local governments, with an additional Rs. 150 billion for expanding waste management services to more districts across Punjab. This is expected to enhance sanitation and municipal infrastructure, especially in underserved areas.