Punjab presents Rs5.3tr 'budget of hope' for FY26-27

Punjab Finance Minister Mujtaba Shuja ur Rehman on Monday presented a surplus budget of Rs5.903 trillion (5903 billion) for the financial year 2026-27 in the provincial assembly amid strong protest by the opposition.

“We did not make hollow promises we delivered what we committed”, said the finance minister.

Punjab Chief Minister Maryam Nawaz was also present in the House. 

This budget represented an increase of 10.7 per cent compared to the current fiscal year. Current expenditures are estimated at Rs1,962.93 billion, which is 3.1 per cent lower than those of the ongoing fiscal year. This reduction is primarily attributable to the government's austerity drive and prudent fiscal management measures.

In the next fiscal year, a 7 per cent increase in the salaries of government employees is being proposed. As a result, salary expenditure will rise by only 1.4 per cent to Rs. 638.93 billion, reflecting the effectiveness of the government's sound rightsizing and financial management policies.

Furthermore, a 3.5 per cent increase in pensions for retired government employees is being proposed for the next fiscal year. Consequently, the province's pension expenditure is projected to reach Rs. 500.12 billion.

Read More: Aurangzeb says Budget 2026-27 delivers on promise to move economy from stability to growth

In order to provide public services at the grassroots level, a substantial allocation of Rs. 803.88 billion is being proposed for local governments under the Provincial Finance Commission (PFC) Award, reflecting an increase of 5.2 per cent.

Service delivery expenditure is estimated at Rs. 783.62 billion, of which Rs. 578.62 billion is earmarked for the routine operational expenses of government institutions. Owing to the government's effective policy measures and prudent financial management, this amount is 5.1 per cent lower than that of the previous fiscal year.

Similarly, it is proposed that Rs. 679.01 billion be allocated under the head of current capital expenditure as part of the budget for the forthcoming fiscal year.

Under the leadership of CM Maryam, despite prevailing economic challenges, the government has ushered in a new era of development through strong fiscal discipline, effective planning, and people-centric policies.

The landmark public welfare initiatives introduced in the Fiscal Year 2025–26 budget are a practical manifestation of this vision. It is also noteworthy that, under the development budget for FY 2025–26, a total of 2,638 development projects with an estimated cost of Rs. 1,150 billion have been completed. This represents a 16 per cent increase over the development expenditures of Fiscal Year 2024–25.

Also Read: Budget 2026-27: FinMin projects 4% growth as govt unveils fiscal, tax and reform agenda

The finance minister further said that he was pleased to inform this House that, owing to a substantial increase in provincial revenues, the efficient utilisation of resources, and the implementation of an expenditure rationalisation policy, an amount of Rs. 752 billion was being allocated for the development budget.

With regard to the provincial economy, transfers from the Federal Government to Punjab under the NFC Award are estimated at Rs. 4,390.94 billion, representing an increase of 8.1 per cent over the previous fiscal year.

At the same time, the Government of Punjab has adopted a strategy aimed at enhancing the province’s own-source revenues. In this context, a target of Rs. 1,209.86 billion has been set for provincial revenue collection in the upcoming fiscal year.

Under this framework, the Punjab Revenue Authority has been assigned a revenue collection target of Rs. 528.50 billion, which is 55.4 per cent higher than the target for Fiscal Year 2025–26.

Similarly, the Board of Revenue has been given a tax collection target of Rs. 86.19 billion. For the next fiscal year, the Excise and Taxation Department has been assigned a revenue target of Rs. 124 billion, reflecting a significant increase of 77 per cent compared to the current fiscal year.

Provincial non-tax revenues are estimated at Rs. 461.17 billion, which is 52 per cent higher than the corresponding figure for the previous fiscal year. These revenue targets will further strengthen the province’s fiscal self-reliance and ensure the availability of resources for development priorities.

"We fully recognise that meaningful investment in productive sectors and public welfare initiatives is not possible without a substantial increase in provincial revenues. Under the leadership of CM Maryam, and through the dedicated efforts of the finance department and all provincial departments, it is expected that 99 per cent of the provincial revenue target will be achieved by the end of Fiscal Year 2025–26," he said.

Overall, out of the combined tax and non-tax revenue target of Rs. 828 billion, revenues amounting to Rs. 820.16 billion are expected to be realised.

This includes revenue collection of Rs. 370 billion by the Punjab Revenue Authority against a target of Rs. 340 billion, and Rs. 77.22 billion by the Excise and Taxation Department against a target of Rs. 70 billion.

Read This: Govt cuts taxes, ends surcharge for four salaried class income slabs

At this juncture, the finance minister said he considered it important to clarify that our government had achieved the highest level of own-source revenue collection in the history of Punjab without imposing any additional tax burden on the public. This achievement has been made possible through a historic expansion of the tax base and the introduction of positive reforms in tax laws.

Opposition protest

As the budget speech started, the opposition lawmakers assembled near the chair of the Speaker of the Punjab Assembly. They tore the budget books and chanted slogans against the budget.

Earlier, CM Maryam approved the budget after the provincial cabinet formally endorsed the document at its 35th meeting.

Addressing the cabinet meeting, Maryam expressed gratitude to Allah for presenting her third provincial budget and lauded the efforts of Senior Minister Marriyum Aurangzeb, provincial finance minister, Information Minister Azma Zahid Bukhari, Chief Secretary Zahid Akhtar Zaman, Finance Secretary Mujahid Sherdil and the entire team involved in preparing the budget.

She said the budget for FY 2026-27 had been prepared without imposing any new taxes and was focused on public welfare, development and prosperity. She described it as a "budget of hope" aimed at delivering relief to citizens through the province's own resources.

Maryam said the government had made every possible effort to provide maximum relief to the people and minimise the financial burden on them despite economic challenges and prevailing global conditions.

CM Punjab added that although the province had to allocate a substantial amount as its share to the federation, the government remained committed to safeguarding public interests.

Read: Punjab safest province for kids, claims CM

She further directed the Punjab Revenue Authority (PRA) to take effective measures to enhance revenue generation and strengthen the province's financial capacity. She appreciated the collective efforts of the cabinet members and officials, saying the entire team had worked as one unit to prepare a people-friendly budget.

Maryam expressed confidence in the government's performance, saying that she hoped the budget would meet the aspirations of the people as in previous years.

She also prayed for the ability to continue serving the people of Punjab with sincerity and dedication