Punjab State Budget 2026-27 Analysis
Budget EstimateTotal expenditure, revenue receipts, fiscal deficit, and department-wise allocation for Punjab FY 2026-27
Punjab State Budget 2026-27 Budget at a Glance
Total Receipts
Rs 1.26 lakh crore
+8.3%
Total Expenditure
Rs 1.67 lakh crore
+7.3%
Fiscal Deficit
4.1%
Rs 39,971 crore
Capital Expenditure
Rs 18,565 crore
+56.3%
Tax Revenue
Rs 1.01 lakh crore
+56.4%
Interest Payments
Rs 28,755 crore
17% of expenditure
Punjab Revenue Receipts 2026-27
Own tax revenue vs non-tax revenue breakdown
Punjab Expenditure Breakdown 2026-27
Revenue vs Capital spending and department allocation
Revenue vs Capital Split
Top 10 Departments by Allocation
Fiscal Deficit as % of GSDP โ Punjab 2026-27
The fiscal deficit for Punjab in 2026-27 is 4.1% of GSDP (Rs 39,971 crore), reflecting the state's borrowing needs to fund development programmes.
States are expected to maintain fiscal deficit within 3% of GSDP as per the FRBM Act. Punjab's deficit is above this threshold, driven by higher capital spending needs.
Interest payments at Rs 28,755 crore consume 17.2% of total expenditure.
Punjab State Budget 2026-27 โ Receipts & Expenditure Summary
| Particulars | Amount | % of Total |
|---|---|---|
| A. Total Receipts | Rs 1.27 lakh crore | 100% |
| 1. Revenue Receipts | Rs 1.26 lakh crore | 99.6% |
| a. Own Tax Revenue | Rs 1.01 lakh crore | 79.9% |
| b. Non-Tax Revenue | Rs 15,687 crore | 12.4% |
| B. Total Expenditure | Rs 1.67 lakh crore | 100% |
| 1. Revenue Expenditure | Rs 1.48 lakh crore | 88.9% |
| 2. Capital Expenditure | Rs 18,565 crore | 11.1% |
| of which: Interest Payments | Rs 28,755 crore | 17.2% |
| C. Fiscal Deficit | Rs 39,971 crore | 4.1% of GSDP |
Source: Punjab State Budget Documents via PRS India. All figures in Indian Rupees.
Punjab Department-wise Expenditure 2026-27
Top departments by allocation in Punjab for 2026-27
| Department โ | Revenue โ | Capital โ | Total โ | Share |
|---|---|---|---|---|
1. Education, Sports, Arts and Culture | Rs 19,108 crore | Rs 2,395 crore | Rs 21,503 crore | 12.9% |
2. Social Welfare and Nutrition | Rs 16,684 crore | Rs 2,091 crore | Rs 18,775 crore | 11.3% |
3. Agriculture and Allied Activities | Rs 13,579 crore | Rs 1,702 crore | Rs 15,281 crore | 9.2% |
4. Police | Rs 8,188 crore | Rs 1,026 crore | Rs 9,214 crore | 5.5% |
5. Health and Family Welfare | Rs 6,920 crore | Rs 867 crore | Rs 7,787 crore | 4.7% |
6. Energy | Rs 5,152 crore | Rs 646 crore | Rs 5,798 crore | 3.5% |
7. Transport | Rs 754 crore | Rs 4,399 crore | Rs 5,153 crore | 3.1% |
8. Urban Development | Rs 2,617 crore | Rs 328 crore | Rs 2,945 crore | 1.8% |
9. Irrigation and Flood Control | Rs 1,225 crore | Rs 1,718 crore | Rs 2,943 crore | 1.8% |
10. Rural Development | Rs 2,540 crore | Rs 318 crore | Rs 2,858 crore | 1.7% |
Punjab Budget 2026-27 Analysis & Highlights
Key Highlights
- Total expenditure (excluding debt repayment) is budgeted at Rs 1,66,711 crore for 2026-27, up 7% over the 2025-26 revised estimate of Rs 1,55,402 crore and 13.7% over the 2025-26 budget estimate of Rs 1,46,632 crore.
- Fiscal deficit is targeted at Rs 39,971 crore (4.1% of GSDP) โ above the 3% ceiling recommended by the 16th Finance Commission for 2026-31, and following slippage to 4.2% in the 2025-26 revised estimate and 4.7% in 2024-25 actuals.
- Revenue deficit narrows to Rs 21,955 crore (2.2% of GSDP) from 3.0% of GSDP in the 2025-26 revised estimate โ the strongest consolidation signal in the budget.
- Capital outlay jumps 76% to Rs 18,381 crore, from Rs 10,434 crore in the 2025-26 revised estimate and just Rs 6,876 crore in 2024-25 actuals; central 50-year interest-free capex loans of Rs 6,799 crore finance over a third of it.
- Committed expenditure โ salaries Rs 39,115 crore, pensions Rs 22,465 crore and interest Rs 28,755 crore โ totals Rs 90,335 crore, absorbing 72% of revenue receipts (down from 85% in 2024-25 actuals).
- Outstanding liabilities are estimated at 45.1% of GSDP at end-March 2027 โ the heaviest ratio among major states โ with the absolute stock reported at about Rs 4.47 lakh crore.
- The new Mukh Mantri Mawan Dhian Satikar Yojana gets Rs 9,300 crore to pay women above 18 years Rs 1,000 per month (Rs 1,500 for SC women), driving a 66% surge in social welfare and nutrition spending to Rs 18,775 crore.
- Power subsidies total Rs 15,550 crore โ 12.3% of revenue receipts โ comprising Rs 7,715 crore for agriculture, Rs 5,771 crore for domestic consumers and Rs 2,064 crore for industry.
- Own tax revenue is budgeted to rise 15% to Rs 70,851 crore, lifting the own-tax-to-GSDP ratio to 7.2%; State GST leads at Rs 32,000 crore (up 19%) and stamps duty and registration at Rs 9,000 crore (up 29%).
- Central tax devolution rises 21% to Rs 30,464 crore as the 16th Finance Commission lifts Punjab's share of the divisible pool from 1.81% to 2.00%.
- Education takes the largest sector allocation at Rs 21,503 crore (up 13%), including Rs 3,500 crore for the new Sikhya Kranti 2.0 school-transformation initiative โ yet at 12.9% of sectoral spending Punjab trails the 14.5% all-state average.
- Health and family welfare rises 17% to Rs 7,787 crore, anchored by Rs 2,000 crore for the Mukhya Mantri Sehat Yojana universal health coverage scheme.
- Nominal GSDP is projected at Rs 9,80,635 crore for 2026-27 (10% growth); real growth was 7.4% in 2025-26 โ ahead of India's 6.5% โ even as agriculture contracted 2.5%.
Compare Punjab Budget โ Recent Years
Year-over-year comparison of key fiscal metrics
| Metric | 2022-23 | 2023-24 | 2024-25 | 2025-26 | 2026-27 |
|---|---|---|---|---|---|
| Total Expenditure | โ | โ | โ | Rs 1.55 lakh crore | Rs 1.67 lakh crore |
| Revenue Receipts | โ | โ | โ | Rs 1.17 lakh crore | Rs 1.26 lakh crore |
| Capital Expenditure | โ | โ | โ | Rs 11,880 crore | Rs 18,565 crore |
| Fiscal Deficit (% GSDP) | โ | โ | โ | 4.2% | 4.1% |
| Own Tax Revenue | โ | โ | โ | Rs 64,800 crore | Rs 1.01 lakh crore |
Columns showing "โ" will populate as more data is ingested. Data from official budget documents via PRS India.
Understanding Punjab State Budget 2026-27
The Punjab state budget is the annual financial plan presented in the state legislature. It covers all revenue receipts, expenditure allocations across departments, and fiscal deficit management. State budgets are critical because states handle key development areas including education, health, agriculture, and infrastructure.
Punjab Revenue Sources
State revenue comes from three sources: own tax revenue (state GST, stamp duty, excise, vehicle tax), non-tax revenue (fees, fines, interest), and transfers from the Centre (share of central taxes as per Finance Commission recommendations, plus grants-in-aid for specific schemes).
Fiscal Deficit and State Borrowing
Under the FRBM framework, states target a fiscal deficit of 3% of GSDP. States can borrow from the market via State Development Loans (SDLs), and the central government also provides loans. The RBI manages the borrowing calendar for states to ensure orderly market conditions.
Explore More
Compare Punjab with other states
Side-by-side comparison of fiscal metrics across Indian states