The Punjab government has finalised the outline of its budget for fiscal year 2026-27, with the total budget estimated at Rs5.131 trillion.
According to sources, the province is also ready to offer a financial concession of Rs570 billion to the federal government, a move that could help the Centre reduce its fiscal deficit and meet International Monetary Fund (IMF) targets.
Sources said Punjab is expected to receive Rs3.793 trillion from the divisible pool under the National Finance Commission (NFC) Award. In addition to federal transfers, the province is targeting revenue income of Rs1.33 trillion from its own provincial sources.
The projected inflows form the foundation of the province’s largest-ever budget framework.
Rs570bn concession proposed for federation
According to sources, the Punjab government has agreed in principle to provide a financial concession of Rs570 billion to the federal government.
Officials believe the move will help the federation address its fiscal challenges, narrow the budget deficit and remain aligned with IMF commitments.
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The development comes amid ongoing discussions between the federation and provinces over resource distribution and fiscal management.
Salary, pension allocations finalised
Sources said Rs650 billion has been proposed for salaries of government employees in the upcoming budget. An allocation of Rs505.8 billion has been recommended for pension payments.
Officials added that any increase in salaries and pensions for government employees will be in line with the decision taken by the federal government.
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The Punjab government has proposed allocating Rs800 billion to the Punjab Finance Commission. A further Rs25 billion is likely to be set aside for social security initiatives.
Sources also said Rs150 billion has been proposed for the Suthra Punjab Programme, one of the provincial government's flagship cleanliness initiatives.
Development spending remains key focus
Large allocations have also been proposed for development and investment projects across the province. According to sources, Rs221.9 billion has been earmarked for investment and other development programmes.
Another Rs54 billion has been proposed for projects being carried out with external assistance.
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In addition, Rs570 billion is proposed for development and capital expenditure, reflecting the government's focus on infrastructure and public sector development.
Operational expenditure estimated at Rs580bn
Recommendations have been made to allocate Rs580.2 billion for operational expenses. Sources said overall provincial expenditure is expected to reach Rs3.5696 trillion during the next fiscal year.
The spending plan covers salaries, pensions, development projects, social welfare programmes and routine government operations.
The proposed budget highlights Punjab’s effort to balance development spending, social sector funding and fiscal responsibility.
With a total budget size of Rs5.131 trillion, significant development allocations and a possible Rs570 billion concession to the federation, the province is expected to play a central role in Pakistan’s broader fiscal strategy for the upcoming financial year.
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