LAHORE, June 10: The Punjab government is considering providing up to Rs570 billion in fiscal relief to the federal government, a move that could help Islamabad reduce its budget deficit and meet key International Monetary Fund (IMF) targets, according to Punjab Assembly sources.
The proposal is being discussed as part of Punjab’s budget planning for the 2026-27 fiscal year. Sources said the potential adjustment would support the federal government’s fiscal management efforts while maintaining the province’s development and operational spending commitments.
According to sources, Punjab is expected to receive Rs3.79 trillion from the National Finance Commission (NFC) divisible pool during the upcoming fiscal year.
The provincial government has finalized the broad framework of its budget, with the total outlay estimated at Rs5.13 trillion.
The federal budget for fiscal year 2026-27 is expected to be presented in the National Assembly on June 12.
Key budget allocations
Sources said revenue from provincial sources is projected at Rs1.33 trillion, while any increase in salaries for government employees will be aligned with decisions announced by the federal government.
The proposed budget allocates Rs650 billion for salaries and Rs505.8 billion for pensions.
An allocation of Rs800 billion has been proposed for the Punjab Finance Commission, while Rs25 billion has been earmarked for social protection initiatives.
The budget also proposes Rs150 billion for the Suthra Punjab Programme.
Development and operational spending
According to budget estimates, Rs580.2 billion has been recommended for operational expenditures and Rs221.9 billion for other investment programmes.
The government has also proposed allocating Rs54 billion for externally funded projects.
Development and capital expenditures are estimated at Rs570 billion, while Punjab’s overall expenditures are projected at approximately Rs3.57 trillion.
The proposed budget is expected to be presented before the Punjab Assembly later this month.
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