Education, health get big boost
Punjab Finance Minister Mian Mujtaba Shujaur Rehman on Monday presented a Rs5,335 billion surplus budget for financial year 2025-26 in the provincial assembly amid strong protest by the opposition.
In the next fiscal year, the government estimated Rs4,062.2 billion federal transfers from the Federal Divisible Pool, while Rs828.2 billion would be generated from the province's own resources under the head of provincial revenue.
The government allocated Rs2,706.5 billion for the non-development expenditures – a 6% increase over expenditures in the outgoing fiscal year – which included salaries, pensions, PFC transfers and service delivery. The current capital expenditures was estimated at Rs590.2 billion.
"I am glad to inform that the Punjab government is going to present a record development budget of Rs1,240 billion which is 23% of the total budget and 47% higher than the current year's development outlay," the finance minister said in his speech.
He added that it was a matter of satisfaction that the proposed expenditures under Account-II (Food) had come to Rs58.3 billiona decline of 88% compared to fiscal 2024-25.
"And its prime reason is the reduction in financial burden from national exchequer through payment of the circular debts accumulated over several decades which is glaring evidence of our government's best economic planning and that also caused 94% decrease in payments of the internal debts."
Empowering the local governments, the minister told the house, the provincial government allocated Rs764.2 billion under the head of the PFC Award. Rs150 billion were earmarked for waste management and municipal corporations.
Education
The provincial government has allocated Rs661 billion for education which is 24.4% of the total non-development expenditures. While Rs148 billion has been allocated under the head of development in coming fiscal year for the education sector which is 127% higher than 2024-25.
The government had awarded laptops to 40,000 students of universities and colleges through the Chief Minister Punjab Laptop Scheme initiated with Rs27 billion and Rs10 billion, respectively. To promote digital education, the government also earmarked Rs15.1 billion for this purpose through which 112,000 students will be given laptops in the coming year.
An amount of Rs15 billion was allocated for the Honahar Scholarship Programme wherein efficient and deserving students will be given opportunities of the best education.
For the first time, the government has allocated Rs40 billion for renovation of the dilapidated buildings, missing facilities, IT Labs, extra class rooms in government schools through the school management councils under the Punjab Education Initiative Management Authority (PEIMA).
Rs35 billion has been earmarked for the provision of education through private participation under Punjab Education Foundation (PEF). With Rs3 billion, a project of establishing the Nawaz Sharif Centre of Excellence for early childhood education is being started in 10 divisions. Eight new government-affiliated colleges for girls are being established in the province with Rs2 billion.
For the first time in Punjab's history, that provincial government earmarked Rs25 billion for universities for the promotion of higher education. Rs2billion has been allocated for Mian Nawaz Sharif Engineering and Technology University.
Health
The government earmarked Rs181 billion for health sector under the head of development in the next fiscal year, which is 131% higher than the current fiscal year. Under the non-development head, the government allocated Rs450 billion for next fiscal year which is 16% of the total non-development expenditures.
The government earmarked Rs109 billion for for establishment of Nawaz Sharif Medical District and Land Acquisition. Under this medical district, Rs54billion will be spent on seven new projects being initiated in Lahore City.
The new projects include Children Hospital-II and Institute of Genetic Blood Diseases; Institute of Surgical Orthopaedic and Medical Rehabilitation; Specialised Medical Hospital and Medical College; 1,000-bedded Cardiac Institute; Medical University; State-of-the-art diagnostic lab; and Centre of Excellence for Nursing Education.
The government allocates Rs16 billion for establishing medical colleges in Narowal, Okara and Layyah. The project of establishing burn units in Bahawalpur and Rahimyar-Khan at a cost of Rs4 billion has also been made part of this budget.
Rs79.5 billion has been allocated for free medicines at government hospitals. In 2024-25, Rs56 billion was earmarked for this purpose, through which over 20 million patients were benefitted with free medicines worth Rs11.1billion.
The provision of quality medical treatment with Rs25 billion under the Universal Health Insurance Programme is also included in the priorities of this budget.
Rs3.2billion has been earmarked for the Chief Minister's Paediatric Heart Surgery Programme, Rs3.6billion for the Chief Minister's Special Initiative for Transport Programme, Rs8.7billion for the Chief Minister's Dialysis Programme, Rs3billion for Cath Labs, Rs9 billion for the Maryam Nawaz Health Clinics Programme and Rs12.6 billion for the Maryam Nawaz Community Health Programme through the community health inspectors.
Two projects of worth Rs20billion has been made part of this budget aimed at upgradation of the BHUs across Punjab. The government earmarked Rs2billion for provision of fire services in 39 tehsils and Rs2billion for establishing the rescue stations in 33 new tehsils and towns.
Agriculture
The government earmarked Rs123 billion under the development head and Rs56.2 billion under the non-development head in the coming fiscal year for agriculture, livestock, irrigation and water.
The government allocated Rs80 billion for agriculture sector, which is 24% higher than the current fiscal year. Green Tractor Scheme's Phase-II will be initiated with Rs5.5 billion and a new project under the banner of High-Power Tractor Programme will be initiated with Rs10 billion.
For the Kisan Card, the government earmarked Rs6.3 billion, while Rs8.7 billion for solarisation of agriculture tube-wells schemes.
The government earmarked Rs8 billion for Chief Minister's Water Efficient Agriculture (2025-27) – a project which is being initiated for the construction, conservation and efficient utilisation of water resources for agriculture purposes to help line the watercourses.
Rs25 billion has been earmarked for three projects – establishment of water reservoirs; water conservation and water use efficiency; and the water infrastructure development and establishment of water storage.
The government estimated Rs9 billion to meet the water's deficiency at Kasur with a project titled the New Ravi Syphon. A dam will also be constructed at Rawalpindi with Rs4.2 billion for watering 2,280 acres of agriculture land.
Climate resilience
To implement the Climate Resilient Punjab Vision, different projects have been made part of the climate budget, tagging a framework of Rs795 billion which is 64% of the total development budget. Out of which Rs277.4 billion is allocated for climate adaption, Rs371.7 billion for climate mitigation, Rs146 billion for environment protection.
Rs40 billion under the development head and Rs12.9 billion under the non- development head have been earmarked for environment protection, forest and wildlife. To deal with environment dangers like smog, the government earmarked Rs5.7 billion for the Punjab Clean Air Programme.
Governance and law, order
The government allocated Rs35 billion under the development head and Rs4 billion under the non-development head for governance and IT sectors. The government earmarked Rs10 billion under the development and Rs290 billion under non-development head.
To enhance efficiency of the police department, the government allocated Rs200 billion under non-development head. A new 'Crime Control Department' is being established with Rs3.3 billion under non-development head, while Rs3.24 billion under the development head to stop heinous nature crimes.
Other allocations
The government allocated Rs336 billion to infrastructure development sector, which is 27% of the total development budget. Rs4 billion is earmarked for the energy sector; Rs31.4 billion under development and Rs107.3 billion under non-development head for the social protection and welfare.
The government allocated Rs19.2 billion for 62 development schemes for the welfare of the women. The government allocated Rs28 billion under the development head and Rs1.3 billion under the non-development head to the tourism, archaeology and museums.
Opposition protest
As the budget speech started, the opposition lawmakers assembled near the chair of the speaker. They tore up the budget books and chanted slogans against the budget, terming it anti-poor people.
Chief Minister Maryam Nawaz was present in the House. The Opposition tried its best to disrupt the finance minister's speech through their noisy protest but all in vain as Rehman continued his speech.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
19 hours ago
- Express Tribune
WASA Lahore secures biggest budget share
The Water and Sanitation Agency (WASA) Lahore has emerged as the primary beneficiary in Punjab's development outlay for the water and sanitation sector in fiscal year 2025-26, securing the lion's share of funds under the Annual Development Programme (ADP). According to the budget document presented by Punjab Finance Minister Mian Mujtaba Shujaur Rehman in the Punjab Assembly, a total of 94 ongoing schemes worth Rs58.13 billion have been allocated across five WASA agencies. Of these, Lahore alone accounts for 59 projects with an estimated cost of Rs24.83 billion, highlighting a sharp imbalance in the distribution of development funds. The remaining four agencies — Faisalabad, Gujranwala, Multan, and Rawalpindi — have been allocated a combined total of only 35 schemes valued at Rs33.29 billion. Critics have pointed to this disparity as a sign of systemic neglect toward cities outside the provincial capital. In terms of new schemes, WASA Lahore again topped the list with 24 new initiatives for the upcoming fiscal year. WASA Gujranwala received only two new projects — valued at Rs5.9 billion and Rs1.51 billion respectively — with budgeted allocations of just Rs.122 million and Rs.13 million for the next year. Despite submitting hundreds of new proposals, agencies such as WASA Multan, Faisalabad, and Rawalpindi were left out of the new development portfolio altogether. Senior officials from these agencies, speaking on condition of anonymity, expressed frustration over the exclusion, warning that millions of residents, especially in Faisalabad — the textile hub of Pakistan — will remain deprived of clean drinking water. For ongoing projects, WASA Faisalabad received funding for 17 schemes worth Rs19.5 billion, while WASA Multan secured four schemes totalling Rs5.17 billion, and WASA Rawalpindi was granted five projects amounting to Rs6.38 billion. However, actual fund allocations for 2025-26 remain meagre: Rs126 million for Faisalabad, Rs365 million for Multan, and Rs.166 million for Rawalpindi — figures that stakeholders say are insufficient to meaningfully advance the existing work.
Business Recorder
a day ago
- Business Recorder
Fiscal consolidation and social sector expansion: Punjab govt maintains balanced approach
LAHORE: Despite fiscal challenges and persistent structural rigidities, the Punjab government has maintained a balanced approach between fiscal consolidation and social sector expansion. As per Punjab budget 2025-26 document, the NFC transfers and Provincial Own-Source Receipts for FY 2025–26 are estimated at Rs. 4,890.4 billion, driven by a 10.3% increase in Federal Divisible Pool transfers and a projected 13.3% increase in tax collection by Punjab Revenue Authority, reaching Rs. 340 billion. The province's Own Source Tax Revenue is estimated to grow 11.2%, underpinned by reforms in Urban Immovable Property Tax, Agriculture Income Tax alignment with FBR, and transition to a negative list regime under Punjab Sales Tax on Services Act. Punjab's fiscal framework has also been reinforced through the continuation of Public Financial Management (PFM) reforms. Following the enactment of the Punjab PFM Act, 2022, the province institutionalized several key reforms in FY 2024-25, including elimination of circular commodity debt, introduction of a new pension framework, operationalization of the Cash Management Fund, the Grant-in-Aid Policy, and a Medium-Term Debt Strategy, to name a few. The Parametric Pension reforms are projected to reduce accrued pension liabilities to Rs. 6.385 trillion - down from an otherwise estimated Rs. 11.883 trillion - while the Defined Contribution Scheme now applies to all new entrants, introducing a funded model and easing long-term fiscal pressure, the budget document reveals. It may be added that the Grant-in-Aid Policy enforces ceilings, eligibility criteria, and performance-based disbursements to enhance accountability. The Cash Management Fund allows productive investment of idle balances, supporting non-tax revenue and surplus targets. The Medium-Term Debt Strategy guides prudent borrowing, prioritizes concessional finance, and ensures compliance with debt ceilings under the PFM Act. Collectively, these reforms mark a decisive shift toward fiscal sustainability, transparency, and rules-based public financial management. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business Recorder
An appraisal of provincial budgets
Provincial budgets for Punjab, Sindh, and Khyber Pakhtunkhwa for the fiscal year (FY) 2025–26 reflect a precarious balancing act between growth ambitions and fiscal realism, raising critical questions about their long-term sustainability, administrative capacity, and inclusivity. While presented with the usual optimistic overtones, the budgets also carry signals of policy inertia, revenue dependency, and structural inefficiencies that continue to inhibit Pakistan's provincial autonomy and economic self-reliance. The critical scrutiny of these documents not only reveals political economy underlying fiscal planning in each province but also highlights fundamental concerns about the federation's economic route vis-à-vis fiscal federalism. The Punjab government, presenting its budget on June 16, 2025, announced a massive total revenue target of Rs 4,890.4 billion, an ambitious 18.6 percent increase in transfers from the Federal Divisible Pool and a staggering 24.5 percent growth in provincial tax revenues. The projections are structurally flawed, relying on idealistic assumptions that dismiss the historical underperformance of revenue agencies and tax resistance from powerful local lobbies. Reliance on property and agricultural income tax reforms, both fraught with entrenched political resistance, indicates an overestimation of administrative capacity and political will. The failure to meet revised estimates for FY 2024–25, which were already 10.7 percent below initial projections, casts serious doubt on the credibility of these new targets. An estimated collection of Rs 333.5 billion in sales tax on services, up 22 percent from the revised estimate of Rs 273.7 billion in the outgoing years, is particularly doubtful given the economic uncertainty and enforcement limitations. Non-tax revenue scenario is equally concerning, with estimates for FY 2025–26 set at Rs 273 billion, a 37 percent decline from Rs 432 billion in FY 2024–25. The sharp fall is attributed to reduced inflows from the Cash Management Fund (CMF), a strategic but now underperforming instrument that had previously earned Rs 213 billion. Reduction to Rs 30 billion in CMF returns highlights both the volatility of this revenue stream and the province's lack of a diversified non-tax income portfolio. The expenditure side is dominated by an extraordinarily high allocation of Rs 1,240 billion for the Annual Development Programme (ADP), a 47.3 percent rise from the previous year's budget and an 11.8 percent increase over revised estimates. The dramatic surge in development outlay raises serious concerns about Punjab's absorptive capacity, given chronic issues in project planning, delays in execution, and cost overruns. The risk of low-impact politically motivated spending, looms large particularly in the absence of institutional reform, robust audit mechanisms, and performance-linked budgeting. The move may also undermine federal fiscal consolidation efforts, as Punjab's ability to generate provincial surplus appears jeopardized by such aggressive development financing. The current expenditures present a paradox, as some critical heads see a reduction despite rising service delivery demands. Allocation for public order and safety affairs, at Rs 299 billion, is 14 percent lower than the revised figures for FY 2024–25, a reduction that appears disconnected from the province's growing population and evolving internal security challenges. The housing development budget alarmingly slashed from Rs 94 billion to just Rs 10.2 billion, and the health sector allocation, cut from Rs 292 billion to Rs 267 billion, reflect a misalignment between policy rhetoric and actual resource commitment. Reductions in areas that directly impact citizen welfare, undermine the government's claim of inclusive growth signaling a return to discretionary rather than needs-based budgeting. The budget also contains a slew of rhetorical initiatives around digitization, climate resilience, and strategic growth, which while theoretically commendable, lack operational clarity, institutional alignment, and performance benchmarks. Failure of similar past programmes owing to bureaucratic ineptitudes and poor accountability—offers a cautionary tale. The absence of structural reform in public procurement, service delivery decentralization, and tax net expansion continues to limit the province's development despite higher fiscal outlays. The Punjab budget, while expensive, risks becoming yet another exercise in political signaling rather than transformative governance. The Sindh government, by contrast, has adopted a more calibrated yet still expansionary fiscal posture, presenting a budget with a projected fiscal deficit of Rs 38.46 billion. The total receipts lean heavily on federal transfers, which account for 62% of the provincial inflows, with Rs 2.095 trillion expected under various heads including National Finance Commission (NFC) Award share, straight transfers, and Octroi and Zila Tax (OZT)-related grants. Overdependence on federal allocations not only limits fiscal autonomy but also exposes the province to macroeconomic fluctuations and federal transfer delays, which have historically disrupted cash flows and hindered implementation. Provincial tax revenues, estimated at Rs 676 billion, represent a modest attempt at internal resource mobilisation. Of this, Rs 388 billion is expected from sales tax on services, while other provincial taxes contribute Rs 288 billion. The low non-tax receipts of just Rs 52.6 billion further reflect a narrow fiscal base and underutilised potential for asset monetization, public-private partnerships, and service-based revenue generation. The structural rigidity of Sindh's revenue architecture has persisted despite years of reform narratives, and this budget does little to change that trajectory. The current expenditures, estimated at Rs 2.15 trillion, have increased 12 percent year-on-year, driven largely by public sector salaries, pensions, and operational costs in health, education, and law enforcement. The size and rigidity of these obligations reflect the state's expanding administrative footprint, which leaves limited fiscal room for development initiatives. The lack of serious pension reform and growing salary commitments create future liabilities that will constrain discretionary spending and development financing for years to come. The development expenditure, accounting for nearly 30 percent of the total budget, offers some hope, with Rs 520 billion allocated to the provincial ADP and Rs 366.7 billion earmarked as Foreign Project Assistance (FPA). The combined development outlay highlights Sindh's commitment to infrastructure and social investment. However, execution remains a chronic weakness. The efficiency of foreign-assisted projects is often hampered by slow disbursements, procurement bottlenecks, and weak monitoring systems. The development agenda, while commendable in size, remains vulnerable to the province's institutional fragility. The strategic posture of Sindh government is one of cautious ambition aiming to maintain development momentum while handling a manageable deficit. However, long-term resilience of this strategy depends on structural reforms in tax administration, expenditure rationalization, and innovation in public financial management. Continued reliance on federal funds and concessional borrowing, in the absence of productivity-enhancing investments, risks eroding the province's fiscal sovereignty and development dividends. The Khyber Pakhtunkhwa budget for FY 2025–26, structured around Rs 1,754 billion in total outlays, is perhaps the most constrained of the three, owing to the province's demographic pressures, post-conflict challenges, and limited economic base. The revenue projections include Rs 1,212 billion from federal transfers and Rs 93 billion from provincial tax and non-tax sources. The stark gap between total budgetary size and internally generated revenue — merely 5.3 percent of total income — reflects a crippling fiscal dependency that leaves the province highly vulnerable to federal fiscal dynamics and delays in NFC disbursements. The total development budget of Rs 416 billion is split between Rs 120 billion for the Provincial ADP and Rs 296 billion under the Accelerated Implementation Program (AIP) and Foreign Project Assistance. Dominance of externally financed or federally supported development initiatives highlights a fundamental weakness in fiscal autonomy. ADP's modest size relative to the total budget also reflects structural crowding caused by salary, pension, and security issues particularly acute in Khyber Pakhtunkhwa due to its proximity to conflict zones and the burden of displaced populations. The current expenditure, standing at Rs 1,338 billion, continues to be dominated by salaries and pensions, which collectively consume over 70% of recurring expenses. Lack of pension reforms is creating a time bomb that threatens fiscal space for critical sectors like health, education, and infrastructure. The rising cost of debt servicing further puts pressure, as the province increasingly turns to domestic borrowing and overdraft facilities to meet monthly obligations, a practice that undermines fiscal discipline and increases inter-governmental friction. The budget does reflect some rationalization in sectoral allocations, with increased funds for health and elementary education, acknowledging post-pandemic service delivery gaps. The commitment to fund Sehat Card Plus scheme and education infrastructure reflects intention, but execution remains mired in weak provincial monitoring capacity. The fragmented governance structure is divided between regular provincial departments, and the AIP umbrella creates duplication, opacity, and administrative inefficiencies that slow down service delivery inflating project costs. The long-term outlook for Khyber Pakhtunkhwa remains risky unless institutional capacity is strengthened, resource mobilization is improved, and a clear strategy for economic diversification is implemented. Absence of industrial policy, low private investment, and limited natural resource monetization continue to limit province's revenue potential and employment generation capacity. The current budget, while pragmatic within existing constraints, offers little by way of transformative vision. A combined analysis of the Punjab, Sindh, and Khyber Pakhtunkhwa budgets reveals a troubling pattern: overdependence on federal transfers, lack of serious pension and salary reform, weak tax enforcement, and political tokenism in development outlays. The way forward lies not merely in higher allocations, but in structural changes reform of provincial tax codes, modernization of service delivery, investment in human capital, and accountability-led governance. The provincial budgets must evolve from annual rituals into policy instruments that truly reflect the needs, rights, and aspirations of the people. Copyright Business Recorder, 2025
