LAHORE: The Punjab government has outlined a comprehensive and ambitious development agenda for FY2025–26 which focuses on initiatives for inclusive and equitable economic growth, human development & social service expansion, investment on productive and digital infrastructure, and climate resilience and environmental sustainability.
Similarly, on the current expenditure side, the focus remains on enhancing spending efficiency and minimizing the burden of recurring costs, while ensuring effective service delivery.
As per budget document, the structure of the FY2025–26 budget reflects a deliberate and disciplined realignment of fiscal priorities. While curtailing non-essential current expenditure, the government has expanded development spending through the largest-ever Annual Development Programme (ADP) in Punjab’s history, with 43 % increase over previous year’s ADP. This expansion has been made possible through robust public financial management reforms, including but not limited to the successful retirement of unsustainable commodity operations debt.
As per budget document, the Punjab government has abolished 28,330 vacant posts to rationalize its workforce, aiming to enhance cost savings, boost efficiency, and promote automation in the public sector.
The government has implemented the deregulation of commodity operations of wheat which previously was financed through commercial borrowing from the financial institutions. The scheme had accumulated a circular debt of Rs629 billion outstanding at June 2022 due to unfunded general subsidy expenditure. The Punjab government has eliminated this debt from provincial revenues leading to reduction of commodity debt outstanding down to Rs13.9 billion at April 25, which is fully backed by the wheat stock leveraging the saving of future debt service in the range of approximately Rs50 billion per annum.
As per budget document, this year’s budget reflects a strategic shift from foundational infrastructure to transformative development.
While the first year focused on road connectivity and basic service delivery, FY2025–26 marks the next logical step: empowering communities through integrated urban development and rural uplift. Transport has emerged as a key priority with a focus on expanding eco-friendly public mobility options, including the introduction of electric buses to reduce urban congestion and environmental impact.
The government has also placed unprecedented emphasis on education expanding access through scholarships, laptops, school meals, and higher education grants. Health remains a cornerstone, with flagship initiatives such as Medical City, Free Medicine, and new centres for Cancer and Cardiac care.
Simultaneously, farmer relief through the Kissan Card, Solarised Tubewells and Mechanisation Programmes aim to enhance productivity and rural resilience. New frontiers in IT, affordable Housing, and Climate Action signal the province’s ambition to build an inclusive, forward-looking economy.
Copyright Business Recorder, 2025
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