WITH the ruling PML-N’s next budget unfolding large infrastructure schemes, and expenditure focusing on service delivery, social protection, relief and subsidies, Punjab appears to be on the move. However, a closer look takes some shine off the rosy picture the numbers paint. For one, flush with cash trickling down from the centre under the NFC arrangement, the budget documents betray the absence of any serious revenue-raising efforts. The projected provincial own tax share of nearly Rs525bn forms just above 10pc of total revenues of Rs4.9tr, speaking volumes about the government’s failure to ramp up efforts to boost its tax collection in Pakistan’s most populous province. Not only that, it has also recorded a shortfall of 10pc in its target for the outgoing year due to lack of effective enforcement of immovable urban property levies and GST on services — both levies are a major revenue source in urban areas globally. Nonetheless, collection under the agriculture income tax is estimated to rise to Rs10.5bn from Rs4bn this year due to the levy’s alignment with federal income tax slabs. But the province’s ability to recover the targeted amount is doubtful.

Moreover, the documents show that the PML-N government is not ring-fencing development funds for Punjab’s underdeveloped southern districts, a practice initiated by the PTI to prevent their diversion to schemes elsewhere. The development focus is back on areas along the GT Road, which provided the ruling party traditional support. For example, Lahore alone gets Rs78bn for development projects. The lopsided development focus on the central and northern regions at the expense of south Punjab under previous PML-N administrations is often blamed for the rising regional disparities in the province. Besides, the budget promises something for almost every segment of the population — from laptops to electric scooters to interest-free loans for farmers to food and transport subsidies for the urban middle class. These measures are aimed at winning back the political support that the ruling PML-N has lost to its rival PTI over the last several years. Will Chief Minister Maryam Nawaz, who has managed to generate headlines for her infrastructure development projects, as well as relief and other social initiatives in the last one year, succeed in restoring the PML-N’s fortunes in its erstwhile stronghold? One can only speculate.

Published in Dawn, June 17th, 2025