by In a highly anticipated session on June 16, 2025, the Punjab Assembly approved a “tax-free” provincial budget for FY 2025–26 totaling Rs 5,335 billion (≃ Rs 5.35 trillion).
💰 What “Tax-Free” Means
- No new taxes or tax rate hikes—the budget introduces no additional tax burdens on businesses or individuals .
- The government aims to boost revenue by expanding the tax base, not through increased rates .
📈 Key Budget Figures
- Total outlay: Rs 5,335 billion
- Development (ADP): Rs 1,240 billion—up 47% from FY 2024–25’s Rs 842 billion
- Non-development expenses (salaries, pensions, transfers): Rs 2,706.5 billion—up about 6%
- Provincial surplus (EPS): Rs 740 billion, conditional on federal FBR targets
- Own-revenue goals: Rs 828.2 billion, with Rs 340 billion from PRA, Rs 135.5 billion by Board of Revenue, and Rs 70 billion via Excise
- Local government transfers: Rs 764.2 billion
👷♂️ Public Servants & Pensioners
- Salaries: A 10% increase across Grades 1–22 effective July 1, 2025
- Pensions: A 5% hike for retired government employees
- Despite higher compensation and pensions, operational costs rose just 3%, reflecting tighter budget control
🏥 Priority Sectors & Big Projects
Development spending across key areas:
- Health: Rs 630.5 billion—with Rs 181 billion for capacity upgrades like burn centres and teaching hospitals
- Education: Rs 811.8 billion—21% increase, including Rs 15.1 billion for laptops and Rs 35 billion for scholarships
- Agriculture, livestock & irrigation: Rs 379 billion total, Rs 123 billion development component
- Sports: Rs 7.6 billion for facilities and grassroots programs
- Roads & infrastructure: Expanding 12,000 km of roads; also funding safe city initiatives and environmental projects
🛠️ Reform Agenda & Governance
- Introduces e‑tendering and digital systems to enhance transparency across spending
- Continues e‑governance reforms: digital wage systems, family registries, citizen-friendly services
- Focus on fiscal discipline reflected in 94% reduction in internal debt servicing
🔍 How the Budget is Funded
- Federal NFC transfers: Rs 4,062.2 billion
- Punjab’s own revenue: Rs 828.2 billion target
- Tied to IMF’s EPS conditions—surplus depends on FBR performance
✅ Bottom Line
Punjab’s historic Rs 5.335 trillion ‘tax-free’ budget reflects a bold commitment to development, welfare, and fiscal restraint. With no new taxes, a 47% surge in development funds, and raises for public servants and pensioners, the province is banking on growth-driven revenue rather than increased taxation.
The success of this ambitious plan hinges on meeting revenue targets, executing digital reforms, and demonstrating transparent governance. If managed effectively, this budget could mark a pivotal moment in Punjab’s path to sustainable development and improved public services.
