The Finance Minister of Punjab, Mr. Harpal Singh Cheema, presented the Budget for the state for the financial year 2025-26 on March 26, 2025.
Budget Highlights
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The Gross State Domestic Product (GSDP) of Punjab for 2025-26 (at current prices) is projected to be Rs 8,91,301 crore, amounting to growth of 10% over 2024-25.
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Expenditure (excluding debt repayment) in 2025-26 is estimated to be Rs 1,46,632 crore, an increase of 4% from the revised estimates of 2024-25. In addition, debt of Rs 89,449 crore will be repaid by the state.
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Receipts (excluding borrowings) for 2025-26 are estimated to be Rs 1,12,431 crore, an increase of 8% as compared to the revised estimate of 2024-25.
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Revenue deficit in 2025-26 is estimated to be 2.7% of GSDP (Rs 23,957 crore), as compared to a revenue deficit of 3.5% of GSDP (Rs 28,685 crore) at the revised estimate stage in 2024-25.
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Fiscal deficit for 2025-26 is targeted at 3.8% of GSDP (Rs 34,201 crore). In 2024-25, as per the revised estimates, fiscal deficit is expected to be 4.5% of GSDP, higher than the budgeted 3.8% of GSDP.
Policy Highlights
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Rural Development: Rs 3,500 crore has been allocated for infrastructure development in rural areas. This scheme includes works such as cleaning up of village ponds, construction of village playgrounds, installation of streetlights, restoration of canals, and setting up of sewage treatment systems.
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Drug Census: Rs 150 crore has been allocated to carry out a drug census in Punjab in 2025-26. It will collect data related to prevalence of drugs in the state. In addition, Rs 110 crore has been allocated towards deployment of anti-drone systems and 5,000 home guards alongside the BSF to prevent cross-border smuggling of drugs and arms.
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Sports: Under the scheme “Khed-da Punjab, Badalda Punjab”, playgrounds and indoor gyms will be built across the state and 13 existing Centres of Excellence for sports will be modernised.
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Health and Family: State health insurance scheme will be made universal to cover 65 lakh families in Punjab. Families covered under the Mukh Mantri Sarbat Sehat Bima Yojana will receive a Sehat Card through which they can avail cashless treatment of up to Rs 10 lakh at private and government hospitals in the state.
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Punjab’s Economy
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Figure 1: Growth in Punjab’s GSDP at constant prices (2011-12) Note: These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation. |
Budget Estimates for 2025-26
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Total expenditure (excluding debt repayment) in 2025-26 is targeted at Rs 1,46,632 crore. This is an increase of 4% from the revised estimate of 2024-25. This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 1,12,431 crore and net borrowings of Rs 31,701 crore. Total receipts for 2025-26 (other than borrowings) are expected to register an increase of 8% over the revised estimate of 2024-25.
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The state estimates a revenue deficit of 2.7% of GSDP (Rs 23,957 crore) in 2025-26, as compared to a revenue deficit of 3.5% of GSDP at the revised estimate stage of 2024-25. In 2024-25, Punjab had budgeted a revenue deficit of 2.9% of GSDP. The increase in revenue deficit in 2024-25 is driven by a 4% increase in revenue expenditure along with unchanged revenue receipts between budget and revised estimates.
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Fiscal deficit for 2025-26 is targeted at 3.8% of GSDP (Rs 34,201 crore), lower than the revised estimates for 2024-25 (4.5% of GSDP). Punjab had budgeted a similar fiscal deficit of 3.8% of GSDP in 2024-25. For 2025-26, states’ fiscal deficit limit has been fixed at 3.5% of GSDP, of which 0.5% of GSDP is linked to undertaking power sector reforms.