Punjab budget likely to exceed Rs5.1 trillion

The Punjab government has completed preliminary preparations for its budget for the fiscal year 2026-27, with the total outlay expected to surpass Rs5.1 trillion.

The Punjab government has completed preliminary preparations for its budget for the fiscal year 2026-27, with the total outlay expected to surpass Rs5.1 trillion. The budget is being formulated with a focus on maintaining fiscal discipline, supporting development priorities, and ensuring compliance with national economic objectives.

According to official sources, the provincial administration has designed its financial plan in line with federal fiscal policies and commitments linked to broader economic reforms. The budget framework also takes into account targets agreed upon with international financial institutions, including the International Monetary Fund (IMF), while aiming to preserve macroeconomic stability.

Sources said Punjab is expected to receive nearly Rs3.79 trillion from the federal divisible pool under the National Finance Commission (NFC) Award, which remains the province’s largest source of revenue. In addition, provincial authorities are projecting around Rs1.33 trillion in income through taxes, non-tax revenues, and other locally generated resources.

Major Spending Priorities

The proposed budget allocates substantial resources to meet recurring government expenditures, with approximately Rs650 billion reserved for salaries of public sector employees. Pension payments are estimated to require more than Rs505 billion, reflecting the growing financial burden of retirement benefits.

To support local governments and regional development initiatives, the Punjab Finance Commission is expected to receive around Rs800 billion in transfers. Social welfare and public support programmes have been allocated Rs25 billion, aimed at assisting vulnerable segments of society.

A significant allocation of Rs150 billion has also been proposed for the provincial government’s flagship “Suthra Punjab” programme, which seeks to improve sanitation services, waste management systems, and overall urban cleanliness across the province.

Development and Investment Plans

Officials said operational expenditures are projected at Rs580.2 billion, while investment-related programmes are expected to receive nearly Rs222 billion. The government has also earmarked Rs54 billion for development projects financed with foreign assistance, highlighting its commitment to infrastructure and public service improvements.

Meanwhile, an estimated Rs570 billion is likely to be spent on other development schemes and capital projects, including initiatives in health, education, transport, and municipal services.

Fiscal Space for Growth

Total provincial expenditures are projected to stand at approximately Rs3.57 trillion. After accounting for routine spending and mandatory obligations, the government expects to retain fiscal and development space of around Rs1.56 trillion, providing room for new projects and policy initiatives during the next financial year.

Officials noted that the final budget figures could undergo adjustments before formal presentation in the Punjab Assembly. They further confirmed that any increase in salaries and allowances for government employees would be announced in accordance with the federal government’s decisions in the upcoming national budget.