Punjab budget 2026-27 — The Punjab government has unveiled a Rs5.903 trillion budget for the 2026-27 financial year, projecting a cash surplus of Rs910 billion and committing large allocations to education and health, even as it slashed the Annual Development Programme by roughly 40 percent and transferred, for the first time in the province’s history, a Rs546 billion grant to the federal government in compliance with an agreement tied to the IMF programme.
Finance Minister Mujtaba Shujaur Rehman presented the budget in the Punjab Assembly, saying the government had adopted fiscal discipline and administrative reforms to create room for public welfare and development initiatives despite economic challenges. The government said its fiscal strategy was anchored in prudent financial management, expenditure rationalisation and revenue mobilisation.
A Budget of Two Faces: Surplus and Cuts
The budget is 10.7 percent higher than the current fiscal year’s outlay, with total estimated expenditure rising 9.6 percent, or Rs568 billion, from last year’s Rs5.335 trillion. Current expenditures have been estimated at Rs1.963 trillion, reflecting a 3.1 percent decrease attributed to austerity measures.
The ADP allocation stands at Rs752 billion, down 39.3 percent from Rs1.24 trillion in the outgoing year. Budget documents lack full transparency, glossing over the Rs588 billion drop in development spending even as the government promised major investments in education, health, agriculture and infrastructure.
General revenue receipts are projected to increase from Rs4.74 trillion in the outgoing year to Rs5.60 trillion in the next, supported by growth in federal divisible pool transfers and enhanced provincial own-source revenues. The province expects to receive Rs4.201 trillion under the NFC Award, against Rs4.622 trillion last year, while provincial own-source revenue is targeted at Rs1.21 trillion.
The Rs910 billion provincial surplus has been included to comply with the financial framework signed between the federal government and the IMF, while the Rs546 billion grant to the Centre forms part of the budget for the first time in the province’s history.
Punjab Budget 2026-27: Salaries, Pensions and Revenue Targets
The government has proposed a 7 percent increase in salaries for government employees and a 3.5 percent increase in pensions. The Punjab Revenue Authority has been given a collection target of Rs528.86 billion, or 55.4 percent more than the outgoing year, while the Excise and Taxation Department has been assigned a target of Rs124 billion, 77 percent higher than the outgoing year. Provincial non-tax revenue collection is estimated at Rs461.17 billion, 52 percent more than last year.
The minister clarified that the increase in revenue generation would come through broadening the tax base rather than raising the burden on existing taxpayers, with revenue from own resources projected to rise by over 42 percent, from Rs524.7 billion to Rs748.7 billion.
Education and Health as Flagship Priorities
Education has been allocated Rs750 billion and declared a top priority. Key initiatives include the continuation of the Chief Minister’s Laptop Programme providing 110,000 laptops, the Honhaar Scholarship Programme benefiting more than 108,000 students, Rs40 billion for the Maryam Centre of Academic Leadership, STEAM laboratories and Nawaz Sharif Centres of Excellence, new autism schools in every division of the province, and 244 IT labs in colleges at a cost of Rs6.9 billion.
For the health sector, Rs500.82 billion has been proposed, covering the Nawaz Sharif Institute of Cancer Treatment and Research, new cardiac facilities, upgraded teaching hospitals, expanded dialysis and transplant programmes and a Nawaz Sharif Medical District worth Rs169 billion.
PIVOT Initiative and Industrial Growth
The budget places strong emphasis on economic transformation through the Punjab Innovation for Value, Opportunity and Transformation initiative, a three-year plan envisaging total investment of nearly Rs1.995 trillion, comprising Rs1.09 trillion in public investment and more than Rs905 billion from the private sector. Of this, Rs193 billion will be used for subsidised financial assistance to 463 industrial projects expected to generate 29,400 direct jobs and USD 5.6 billion in additional export earnings, with the overall programme targeting USD 16.5 billion in total additional exports.
Agriculture, livestock and aquaculture have been allocated Rs132.54 billion, covering the Kissan Card Programme, subsidised tractor schemes, agro-processing parks worth Rs60 billion and climate-resilient agriculture support. The Asaan Karobar interest-free financing programme has to date delivered loans to more than 110,000 entrepreneurs.
Published in SouthAsianDesk, June 18, 2026
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