Punjab slashes development budget by nearly 40% to Rs752 billion

The Punjab government on Tuesday unveiled a Rs752 billion Annual Development Programme (ADP) for fiscal year 2026-27, a reduction of nearly 40 per cent from the Rs1.24 trillion allocated in the outgoing fiscal year, after providing fiscal support to the federal government and adjusting spending priorities amid a constrained economic environment.

According to budget documents, Punjab has extended a fiscal concession of Rs546 billion to support national strategic priorities and macroeconomic stability, while provincial officials said the overall reduction in development spending reflects efforts to align with broader fiscal consolidation measures.

The ADP 2026-27 allocates the largest share of development resources to social sectors, which will receive Rs333.66 billion. Infrastructure development has been allocated Rs117.24 billion, followed by the production sector with Rs103.25 billion, services with Rs86.08 billion, governance, law and order with Rs72.95 billion, and climate and ecology with Rs38.82 billion.

Punjab, home to more than 130 million people and accounting for over half of Pakistan’s economic output, has framed the development programme around improving service delivery, strengthening human capital, supporting economic growth and addressing climate-related challenges.

Social sector receives the largest allocation

Within the social sector, Local Government and Community Development has been allocated Rs115.5 billion, making it the largest recipient. Water and Sanitation follows with Rs62.76 billion.

Other major allocations include Rs43.1 billion for Specialised Healthcare and Medical Education, Rs33.2 billion for Health and Population, Rs30.5 billion for Higher Education and Rs25.3 billion for School Education.

Sports and Youth Affairs has been allocated Rs5.5 billion, while Literacy and Non-Formal Education and Special Education will receive Rs3.8 billion and Rs3.7 billion respectively. Human Rights and Minority Affairs has been allocated Rs3 billion, Women Development Rs2.5 billion, and Social Welfare as well as Auqaf and Religious Affairs Rs2 billion each.

Emergency Services, Rescue 1122, has been allocated Rs800 million.

Budget documents also show broader sectoral allocations of Rs77 billion for health and Rs63 billion for education under the development programme.

Infrastructure spending focused on roads and irrigation

Infrastructure development has been allocated Rs117.24 billion, making it the second-largest component of the ADP.

The Communication and Works Department will receive Rs74.1 billion for roads and public infrastructure projects, while the Irrigation Department has been allocated Rs30 billion to support water management and agricultural productivity.

Housing, Urban Development and Public Health Engineering has been allocated Rs8.84 billion, while the energy sector will receive Rs4.3 billion.

The government has separately highlighted allocations of approximately Rs146 billion for urban development and road infrastructure projects.

Agriculture leads production sector allocations

The production sector has been allocated Rs103.25 billion, reflecting the government's focus on economic activity and productivity enhancement.

Agriculture receives the largest share within the sector at Rs60 billion. Other allocations include Rs16.65 billion for Industries, Commerce and Investment, Rs12.56 billion for Skills Development and Entrepreneurship, Rs6.75 billion for Livestock and Dairy Development and Rs6 billion for Tourism, Archaeology and Museums.

Food Safety and Consumer Protection has been allocated Rs900 million, while Mines and Minerals will receive Rs390 million.

Transport dominates services sector

The services sector has been allocated Rs86.08 billion, of which transport accounts for Rs78.5 billion.

Information and Culture will receive Rs6.7 billion, Labour and Human Resource Development Rs630 million and Cooperatives Rs250 million.

Climate and governance sectors receive dedicated funding

To support environmental protection and climate resilience, the government has allocated Rs38.82 billion to the climate and ecology sector.

The allocation includes Rs15.42 billion for Environment and Climate Change, Rs15.3 billion for Aquaculture and Fisheries, and Rs8.1 billion for Forestry and Wildlife.

Meanwhile, Rs72.95 billion has been allocated for governance, law and order and institutional strengthening.

The largest allocations under this category include Rs25.35 billion for Planning and Development, Rs18.95 billion for the Board of Revenue and Rs12.88 billion for Police.

Other allocations include Rs3.12 billion for Services and General Administration, Rs3 billion for the Judiciary, Rs2.43 billion for Finance, Rs2.2 billion for Law and Parliamentary Affairs and Rs2 billion for the Home Department.

The Provincial Assembly has been allocated Rs1.06 billion, while Public Prosecution and Information Technology and Innovation will receive Rs830 million each. Excise and Taxation has been allocated Rs200 million and Management and Professional Development Rs100 million.

According to the government, the ADP 2026-27 prioritises completion of ongoing projects, efficient use of resources and targeted investments in sectors considered critical for long-term economic growth, social development and climate resilience.