Punjab rejects NFC share cut, plans nearly Rs6 trillion FY27 budget

Punjab Finance Minister Mian Mujtaba Shujaur Rehman said the provincial government would not surrender any part of its National Finance Commission (NFC) Award share as it prepared to present a nearly Rs6 trillion budget for fiscal year 2026-27 on June 16.

Addressing a pre-budget roundtable, the minister said Punjab would defend its financial rights if any reduction in provincial transfers was proposed.

Rehman said Punjab would examine any proposal affecting its NFC allocation but would not compromise on the province’s resources.

The upcoming budget will be the provincial government’s third and is expected to impose no new taxes, continuing the policy followed in the previous two budgets.

According to sources, the provincial government is working on a total budget outlay of nearly Rs6 trillion, including around Rs1.45 trillion for development spending.

Planning documents indicate that Rs980 billion may be allocated to core development programmes, Rs320 billion to other schemes and Rs150 billion to foreign-assisted projects.

The provincial government is also considering a Rs100 billion package for small businesses and industrial development, including concessional financing and subsidies for selected sectors.

Small and medium enterprises, manufacturing companies, pharmaceutical businesses and agro-processing units are expected to receive targeted financing facilities.

Some sectors may be offered loans at interest rates of up to 5%, while proposed repayment periods range from five to 10 years.

Separate financing models are under consideration for small, medium and large industrial projects.

Export-oriented industries may receive long-term, low-cost financing to expand production capacity and exports.

Transport is expected to receive the largest share of the development programme, with around Rs303 billion proposed for infrastructure and mobility projects across Punjab.

The proposals include feasibility work for Lahore’s Blue and Purple metro lines, which would expand the city’s mass-transit network to 97.1 kilometres.

The proposed Blue Line would cover 24 kilometres through elevated and underground sections.

The 19-kilometre Purple Line is planned to connect Data Darbar with Allama Iqbal International Airport.

The government is also considering Rs250 billion for the local government sector, including funding for model villages, road rehabilitation, clean water schemes, sewerage projects, infrastructure monitoring systems and urban services at union council level.

Other proposed development areas include education, healthcare, rural development, sanitation, smart police stations and public welfare projects.

Rehman said the province had faced financial pressure from inflation, economic uncertainty, limited fiscal space and climate-related disasters.

Floods and extreme weather events required the government to redirect funds towards relief, rehabilitation and reconstruction, he added.

The minister said the government had reduced discretionary expenditure, administrative costs and non-essential spending to direct more resources towards development and public services.