Budget FY2025-26: Punjab govt presents Rs5.3trn ‘tax-free’ budget

Punjab Finance Minister Mujtaba Shuja-ur-Rehman on Monday presented the provincial budget for the financial year 2025-26 in the assembly session.

A week after the federal government announced its budget, the provincial government proposed its Rs5.335 trillion budget for the upcoming fiscal year.

Out of the total budget outlay, Rs2.706 trillion has been allocated for non-development expenditure, including pensions and salaries. “The non-development expenditure has increased by 6%,” he said.

The provincial government has budgeted Rs590 billion under current capital expenditure.

As the provincial minister presented the budget, the opposition lawmakers of Pakistan Tehrik-e-Insaf (PTI) protested.

He started the budget speech by mentioning the measures taken by the incumbent provincial government.

“I would like to congratulate the political and military leadership for safeguarding national interests during the recent tensions with India,” the minister said.

“We have completed 6,104 projects during the ongoing fiscal year,” he informed.

He shared that the government is establishing the Nawaz Sharif Institute of Cancer Treatment and Research in Lahore for Rs72 billion.

‘Record development budget’

The provincial government allocated Rs1.24 trillion for development in FY26, an increase of 47% as compared to Rs842 billion allocated in FY25.

“This budget marks a strategic shift in Punjab’s history,” said the minister. “This is the highest ever development budget in the province’s history.”

For the province of Punjab, federal transfers have been estimated at Rs4.062.2 trillion under FDP for the upcoming fiscal year. Meanwhile, the provincial government has set a target of Rs828.1 billion for its own-source revenues in FY26.

Punjab Revenue Authority (PRA) targeted to collect Rs340 billion in FY26.

Provincial surplus

The Punjab government has allocated Rs740 billion under the estimated provincial surplus (EPS) for FY26, amid an understanding reached between the federal government and the International Monetary Fund (IMF).

“It is pertinent to mention that the achievement of this provincial surplus is directly related to FBR’s revenue target,” said the minister.

The provincial government has allocated Rs494 billion for the social sector, which accounts for 40% of the development budget.

Salaries and pensions

Provincial government employees to receive a 10% salary increase. Meanwhile, the provincial government increased pensions by 5% for FY26.

Education

The provincial government has allocated Rs148 billion for education under the development package for FY26. Whereas, Rs661 billion was budgeted for the non-development expenditure of the education sector.

Laptop scheme

Under the Chief Minister’s Laptop Scheme, Rs15.1 billion has been earmarked to distribute laptops to 112,000 students in FY26.

The provincial government has budgeted Rs40 billion for the upliftment of government schools. Moreover, the Merit Scholarship Programme will receive Rs15 billion to provide educational opportunities to deserving students.

For special education, the province has allocated Rs5 billion for FY26. Moreover, Rs25 billion has been earmarked for higher education in FY26.

Health

Health budget for the province has been raised to Rs630.5 billion for FY26.

“Similar to last fiscal, the health sector remains pivotal for the provincial government,” the minister said.

The province has allocated Rs181 billion under the development budget for the health sector, an increase of 131% as compared to the last fiscal. Whereas, Rs450 billion has been earmarked under non-development expenditure for FY26.

The minister shared that the provincial government has earmarked Rs109 billion for the establishment of the Nawaz Sharif Medical District in Lahore.

He shared that Rs79.5 billion has been allocated for free medicines disbursement in government hospitals.

Budget FY2024-25: Punjab govt presents Rs5.4 trillion ‘tax-free’ budget

The Punjab government has allocated Rs411.1 billion for local bodies. Whereas, Rs150 billion and Rs20 billion will be provided as special grants for waste management and municipal corporations.

Social security package

The provincial government has proposed to allocate Rs70 billion under a social security package.

Agriculture

The provincial government has allocated Rs123 billion for the development expenditure of the agriculture, livestock and irrigation sector. Whereas, Rs56.2 billion has been budgeted for non-development expenditure.

The Punjab government has allocated Rs335.5 billion for the construction sector.

Earlier, Business Recorder, citing its sources, informed that the upcoming provincial budget will be tax-free, and no new taxes will be introduced. Estimated at over Rs1,200 billion, the new fiscal plan is expected to feature a record-breaking development outlay, emphasising health, education, infrastructure, and tourism.

As per the report, the new budget will include over 850 development schemes, and the key projects include the expansion of Nawaz Sharif Medical City in Lahore, where new hospitals will be constructed under a public-private partnership model. The government also plans to roll out extensive sanitation and clean drinking water initiatives throughout Punjab. Infrastructure development remains a central priority.