Punjab Finance Minister Mujtaba Shuja-ur-Rehman on Monday presented a Rs5.335 trillion provincial budget for FY2025-26, featuring a record Rs1.24 trillion development outlay—a 47% increase over the previous year.
The budget was unveiled a week after the federal budget, and in line with the federal government’s agreement with the International Monetary Fund (IMF), the Punjab government announced a Rs740 billion estimated provincial surplus (EPS) for FY26.
Out of the total outlay, Rs2.706 trillion has been allocated for current (non-development) expenditures, including pensions and salaries, marking a 6% increase over the previous year. An additional Rs590 billion has been budgeted under current capital expenditure.
Federal transfers are expected to amount to Rs4.062 trillion, while Punjab’s own-source revenue target has been set at Rs828.2 billion. The minister highlighted that achieving the provincial surplus will be contingent upon the Federal Board of Revenue (FBR) meeting its revenue target.
In his address, the minister noted the completion of 6,104 projects in the outgoing fiscal year. He also reiterated the government’s commitment to long-term investments in health, education, infrastructure, and municipal development.
Development Focus
The Rs1.24 trillion development budget prioritizes social sector spending, with Rs494 billion—or 40% of the total—allocated for this segment. Within this, the education sector will receive Rs148 billion for development, while non-development education expenditure is budgeted at Rs661 billion.
Among major new initiatives is the Rs72 billion Nawaz Sharif Institute of Cancer Treatment and Research in Lahore. Additionally, the government plans to expand the Nawaz Sharif Medical City under a public-private partnership framework.
A Rs70 billion social security package has been proposed, alongside allocations of Rs764.2 billion for local governments. The budget also earmarks Rs150 billion and Rs20 billion as special grants for waste management companies and municipal corporations, respectively.
Education Initiatives
Under the Chief Minister’s Laptop Scheme, Rs15.1 billion has been allocated for laptop distribution to students. A further Rs15 billion has been budgeted for a merit-based scholarship programme to support deserving students.
Tax Policy and Infrastructure
No new taxes were introduced in the budget, in line with earlier indications of a tax-free provincial fiscal plan. Infrastructure development remains a central component of the government’s agenda, alongside broader initiatives to expand access to clean drinking water and improve sanitation systems across the province.
Assembly Reaction
The budget session was marked by protests from opposition lawmakers affiliated with the Pakistan Tehreek-e-Insaf (PTI), who disrupted the proceedings as the finance minister delivered his speech.
The Punjab budget for FY26 reflects the provincial government’s intent to support economic growth through higher development spending, while maintaining fiscal discipline under the IMF-led federal framework.
