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he Punjab budget for the fiscal year 2025-26 has a total outlay of Rs 5,335 billion. This includes a development allocation of Rs 1,240 billion, larger than the federal government’s development budget. This reflects a provincial commitment to driving its own development agenda. The development allocation for the previous year was Rs 1,109 billion, of which 78 percent was utilised. The 2.75 percent increase in current expenditure over the previous year is a significant departure from the average 22 percent year-on-year increases in the past.
The development budget reveals a shift in sectoral priorities. The social sector has seen a marginal increase, its share of the total development budget growing by 4 percentage points to 40 percent. Conversely, infrastructure development has experienced a significant decrease of 19 percent, dropping to 27 percent of the total from 46 percent in the previous year. The production and services sectors have seen their shares increase by 6 percent and 4 percent, respectively.
The education sector’s development budget is Rs 148 billion, an increase of 80 percent over the previous year’s Rs 82 billion. However, a substantial portion of this increase, Rs 37 billion, is meant for the Punjab Laptop Scheme. Excluding this, the increase in education funding is 35 percent. While school and special education budgets have seen notable increases of 135 percent and 150 percent, respectively, the allocation for literacy and non-formal education has remained stagnant at Rs 4 billion. Key initiatives in this sector include the Punjab Education Foundation, scholarship programmes and the reconstruction of school buildings. The lack of increased funding for non-formal education remains a key concern, suggesting a need for greater focus on equity and access.
The health sector development has been allocated Rs 182 billion, a 10 percent increase from the previous year. While large projects like the establishment of the Nawaz Sharif Medical District in Lahore and a Children’s Hospital in Rawalpindi are part of the plan, a significant portion is dedicated to community-level initiatives. These include the Maryam Nawaz Community Health Services Programme and the revamping of 24/7 basic health units (BHUs).
Stunting is the most widespread form of malnutrition. Some districts in the Punjab have reached 35-40 percent prevalence. Underweight rates are closely following stunting, with some districts showing up to 30 percent underweight children. However,there are no dedicated budget lines for nutrition, with only Rs 100 million allocated under the Water Supply and Sanitation heading for a multi-sectoral nutrition strategy. However, there have been initiatives that aim to address malnourishment among children namely Chief Minister’s Punjab Schools Meal Programme in eight districts (Rs 7 billion) and a meal programme for enrolled students in Special Education Institutions working across the Punjab (Rs 1.45 billion). Given the malnourishment prevalent among women and children in the Punjab, UN/ development partners have been advocating dedicated budget lines in the Annual Development Programme to help focus and monitor the situation for improvement.
For child protection, Rs 108.61 million has been allocated to further expand and strengthen child protection centres in some districts. This allocation is meant for construction of Child Protection and Welfare Bureau buildings/ centres. There is no allocation, however, for running cost. It is important to note that a lack of dedicated human and financial resources has rendered some of these facilities non-functional. As a result, there is a significant gap in child protection services. Currently, the CPWB operates with public resources in only nine districts. The remaining districts lack formal child protection services. The current year’s allocation represents an incremental improvement, but there is a need for integrated protection systems and response mechanism in all districts.
Clubbed together, the water supply and sanitation budget and that of the local government and community development budget, has seen an increase of 129 percent, from Rs 61.75 billion to Rs 142 billion. There has been a significant push for rural water and sanitation through the Punjab Rural Sustainable Water Supply and Sanitation Project, which has an overall allocation of Rs 96 billion, out of which Rs 26 billion will be allocated during the current fiscal year. The increased outlay for the Local Government and Community Development is also supported through a foreign aid component of Rs 42 billion.
The Environment and Climate Change Department has received a 47.5 percent increase in its allocation, now totalling Rs 14.7 billion. A considerable portion of this, Rs 4 billion, is designated for a chief minister’s initiative.
The social protection allocation stands at Rs 70 billion, a reduction from the previous year’s spending of Rs 119 billion. However, social welfare has seen a 75 percent increase to Rs 7 billion. Women’s development has a stagnant allocation of Rs 1.4 billion. Key social welfare initiatives include the Himmat Card Programme for persons with disabilities, the Maryam Nawaz Social Security Ration Card, and programmes for skill enhancement and economic empowerment for rural women. These initiatives signal a growing focus on empowerment and social safety nets.
The international funding landscape in the Punjab is dominated by the World Bank, which provides 67 percent of the foreign development aid, six times more than the Asian Development Bank. This funding is heavily skewed towards large-scale infrastructure and governance projects. There is an opportunity for strategic alignment on child-sensitive outcomes in these externally funded education and health programmes.
The Punjab budget for 2025-26 is a statement of provincial ambition. It demonstrates a commitment to large-scale projects and social welfare initiatives but also highlights areas where a more balanced and equitable approach could be beneficial, particularly in foundational sectors like non-formal education, primary healthcare and nutrition.
The writer is a policy practitioner. The opinions expressed here are personal