Budget FY26: Punjab announces 10% raise in salaries, 5% in pensions

Punjab Finance Minister Mujtaba Shuja ur Rehman presented the Rs5,335 billion provincial budget for the fiscal year 2025–26 on Monday.

Speaking on the floor of the Punjab Assembly, he announced a 10% salary increase for government employees from Grade 1 to 22 and a 5% rise in pensions.

The government has earmarked Rs1,240 billion, 23% of the total budget, for the Annual Development Programme (ADP), reflecting a 47% increase compared to Rs842 billion in FY 2024–25. The finance minister emphasized that this increase demonstrates the government's commitment to development and growth.

Rehman highlighted that expenditures under Account-II (Food) have been slashed by 88% to Rs53.3 billion, compared to the current fiscal year, which he cited as evidence of improved economic planning. As a result, internal debt servicing has reportedly decreased by 94%.

Health, education, and other social sectors remain a top priority for the PML-N government, with Rs494 billion—40% of the ADP—allocated to social sector development.

Outlining revenue expectations, the finance minister said total revenue is projected at Rs4,890.4 billion. Punjab is expected to receive Rs4,062.2 billion from the federal divisible pool under the NFC Award, while its own revenue is estimated at Rs828.2 billion. The Punjab Revenue Authority has been set a collection target of Rs340 billion, the Board of Revenue Rs135.5 billion, and the Excise Department Rs70 billion.

Calling the budget “tax-free, progressive, and pro-business,” Rehman noted that Rs2,706.5 billion would be allocated for salaries, pensions, PFC transfers, and service delivery—representing a 6% reduction in these expenditures. An additional Rs590.2 billion is allocated under current capital expenditures.