Lahore, June 16, 2025 – The Government of Punjab presented a record-breaking budget of Rs5.34 trillion for the fiscal year 2025-26, marking a significant leap in development spending and fiscal targets.
The announcement came a week after the federal budget, with Punjab Finance Minister Mujtaba Shuja-ur-Rehman unveiling the provincial budget during a session of the Punjab Assembly.
Addressing the assembly amidst protests by opposition Pakistan Tehreek-e-Insaf (PTI) lawmakers, the minister emphasized that the budget reflects the province’s new strategic direction focused on public welfare, development, and economic resilience. “This is the largest development budget in Punjab’s history,” he declared.
Out of the total budget outlay, Rs2.706 trillion has been allocated to non-development expenditures such as salaries and pensions, showing a 6% increase. Rs590 billion has been earmarked for current capital expenditure. Government employees will receive a 10% salary hike, while pensions will increase by 5%.
The development budget stands at Rs1.24 trillion — a 47% increase over the previous year’s Rs842 billion. A major highlight is the Rs72 billion Nawaz Sharif Institute of Cancer Treatment and Research and Rs109 billion earmarked for the Nawaz Sharif Medical District in Lahore.
The Punjab government also plans to spend Rs630.5 billion on the health sector in FY26, with Rs181 billion dedicated to development and Rs450 billion for non-development. An additional Rs79.5 billion has been allocated for free medicine in public hospitals.
In the education sector, Rs661 billion will go towards non-development expenditure and Rs148 billion for development. Key initiatives include Rs15.1 billion for the Chief Minister’s Laptop Scheme, targeting distribution to 112,000 students, Rs40 billion for school infrastructure improvement, Rs15 billion for merit scholarships, Rs5 billion for special education, and Rs25 billion for higher education.
On the revenue side, federal transfers under the divisible pool (FDP) are projected at Rs4.062 trillion, while Punjab’s own-source revenue target has been set at Rs828.1 billion. The Punjab Revenue Authority (PRA) aims to collect Rs340 billion during FY26.
In line with the federal agreement with the International Monetary Fund (IMF), Punjab has budgeted Rs740 billion in provincial surplus. “Achieving this surplus hinges on the Federal Board of Revenue (FBR)’s revenue performance,” the minister emphasized.
Social sector development remains a key priority with Rs494 billion allocated, comprising 40% of the overall development plan. Under the social security package, Rs70 billion has been proposed to support vulnerable segments of society.
The agriculture, irrigation, and livestock sectors will receive Rs123 billion in development funding and Rs56.2 billion for non-development needs. The construction sector will be supported with Rs335.5 billion in funds. Additionally, local governments will receive Rs411.1 billion, while special grants of Rs150 billion and Rs20 billion have been assigned to waste management authorities and municipal corporations, respectively.
The Punjab budget 2025-26 signals a bold move towards inclusive development, public welfare, and fiscal discipline, aligning closely with national economic reforms and global best practices.