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Punjab Government has presented a budget total outlay of Rs2.6 trillion yesterday. The first impression about the budget documents are the succinct summery documents for easier understanding and comprehension. The federal government needs to take a leaf from Punjab in terms of presenting documents.

The highlights of the Punjab budget are 66 percent growth in Annual Development Plan (ADP) which is estimated at Rs566 billion for FY22. The current and service delivery budget outlay increased by 8 percent to Rs1,428 billion. The government is offering over Rs50 billion tax relief (out of its domain) to counter COVID impact as provinces collect GST on services and these are most adversely affected by lockdowns. Following the federal government line, pension and salaries are increased by 10 percent.

Within the total outlay of Rs2.6 trillion, majority share of Rs1.7 trillion is coming from federal divisible pool. The calculations are based on FBR’s tall growth target of Rs3.8 trillion. Any shortfall in it would have a proportionate impact on Punjab’s share. In that case, either the provincial surplus (estimated at Rs125 bn) would be lower or development expenditure be compromised.

Nonetheless, Punjab’s own revenue target is growing and has reached almost one fourth of what it is getting from federal divisible pool at Rs405 billion. The collection in the outgoing year (2020-21) is better than what was budgeted- revised estimates at Rs359 billion as compared to budgeted Rs317 billion. Punjab Revenue Authority (PRA) collection for outgoing is revised to Rs142 billion from budgeted Rs125 billion. The target for 2021-22 is Rs156 billion. Board of Revenues (BoR) collection is budgeted at Rs67 billion. Non-tax revenues are performing better – Rs130 billion (from Rs86 bn originally budgeted) are in revised budget FY21, and next year collection is conservatively estimated to be Rs132 billion.

Punjab government is aiming to have an inclusive and participatory budget in FY22. The allocation for education is estimated at Rs442 billion, health at Rs369 billion and infrastructure at Rs204 billion. For rural economy, Rs97 billion are earmarked and Rs79 billion are allocated for agriculture and livestock.

The priority sectors for Punjab can be clued in by looking at the increase in sectoral allocation. Highest increase of 58 percent is reserved for infrastructure. This was expected in the fourth year of government. The second in line is rural economic development where the growth is budgeted at 57 percent. Increase in health and education is by 30 percent and 13 percent, respectively. The increase in local government spending is at 15 percent.

The government has spelled out some flagship initiatives with highest spending budgeted for district development package at Rs360 billion. Following the success of KP, Punjab is increasing its footprint in universal health insurance – Rs80 billon are set aside for entire population of Punjab. The spending at road rehabilitation and development is estimated at Rs105 billion. South Punjab development is the key card for PTI and Rs189 billion are budgeted for 2012-22 within South Punjab development portfolio.

The government has kept over Rs50 billion to combat the pandemic including around Rs10 billion that is being blocked for Covid specific interventions and emergent needs. Then there are tax reliefs across the sector including property tax, motor vehicle tax, stamp duties and relaxation of GST on over 10 services.

Within the current and service deliveries, the spending on salaries is budgeted to increase by 13 percent to Rs381 billion, and pension by 10 percent to Rs275 billion. Resources allocated to provincial finance commission (PFC) are increased by 8 percent to Rs483 billion. Overall service delivery allocations are increased by 5 percent to Rs232 billion.

Within infrastructure, the reliance is aimed to grow on public private partnership (PPP) mode. It is a different debate that how much is to be materialized in the backdrop of NAB fear. Nonetheless, Rs55 billion are allocated to Rawalpindi Islamabad Lai expressway, Rs25 billion for an expressway surrounding Okara and Rs12 billion for Multan Vehari Road. Then Rs16 billion are kept aside for Sialkot ring road. Then Rs10 billion are budgeted for water metering in Lahore in PPP mode.

Environment improvement is something close the PM, and PTI government in Punjab is living up to his expectations. Rs13 billion are earmarked for Billion Tree Tsunami programme and some funds for two national parks. Rs4 billion are budgeted for procurement of 200 Eco friendly busses and Rs13 billion for renewable energy projects. Then the government is committing to install air and water quality monitoring systems across the Punjab.

There was not much on the agriculture and food security front in the federal budget as it is a provincial subject. Punjab seemingly is taking this seriously. An amount of Rs42 billion is allocated for Punjab agriculture improvement projects and Rs52 billion are earmarked for agriculture transformation plan. On water better availability, Rs18 billion are set aside for improvement in watercourses and Rs2 billion for promoting drip and sprinkle irrigation systems.

Overall, like federal, the Punjab budget is pro-growth with emphasis on spending. There is not much to talk about taxes on agriculture and other provincial areas, apart from GST on services. The focus on health and social spending in days of pandemic is good, and decent growth in PRA revenues is commendable.


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