Punjab Budget: When Optics Trump Economics

A masterclass in fiscal fiction—where numbers bend, public services vanish, and ballooning debt takes centre stage.

WHEN PUNJAB Finance Minister Harpal Singh Cheema presented the ₹2.36 lakh crore budget for FY 2025–26, he struck an upbeat tone—speaking of transformation, empowerment, and a prosperous future.

With a projected revenue deficit of 2.51% and a fiscal deficit of 3.84%, he claimed the AAP government had laid a “strong foundation” for Punjab’s revival, even taking potshots at past regimes for “looting” the state over four decades.

But behind the confident rhetoric lies a different story—one of fiscal jugglery, questionable claims, and a widening gap between announcements and actual delivery.

Lofty Growth Projections, Dubious Assumptions

Cheema pegged Punjab’s Gross State Domestic Product (GSDP) at ₹8,91,301 crore for FY 2025–26, assuming a 9% growth over the previous year’s estimate of ₹8,09,538 crore. On paper, this seems encouraging.

In reality, it assumes buoyant consumption, strong tax compliance, and robust industrial activity—none of which align with the ongoing slowdown in key sectors, declining farm incomes, and persistent outmigration. The absence of any concrete policy or investment roadmap renders this optimism hollow.

The Revenue–Expenditure Mismatch

These grand economic projections begin to unravel when matched against actual receipts. In FY 2024–25, the government had projected ₹58,935 crore in own tax revenue. Yet, by February 2025, collections stood at under ₹40,000 crore. To meet the target, the state would have needed to mop up over ₹19,000 crore in a single month—an implausible feat that exposes the overestimation built into revenue assumptions.

Even more concerning is how deeply committed expenditures are devouring Punjab’s revenue base:

• Salaries: ₹35,168 crore
• Pensions: ₹19,800 crore
• Interest Payments: ₹23,900 crore

Together, these total ₹78,868 crore, while the state’s own revenue projection stands at ₹58,935 crore. That means the state is already short by nearly ₹20,000 crore just to meet fixed costs—let alone fund development, public services, or capital works. In percentage terms, ₹54,968 crore—or 93.32% of projected own revenue—is consumed solely by salaries and pensions.

This means there is nothing left from the state’s own tax revenue for infrastructure, education, healthcare, rural development, or economic incentives. Such an overwhelming tilt toward committed liabilities reveals a structural imbalance—not a temporary strain.

This chronic mismatch between income and expenditure isn’t just unsustainable—it’s a fiscal crisis concealed by borrowed optimism. Without urgent reform, Punjab’s budget will remain a cycle of unrealistic targets and deepening deficits.

Discrepant Employee Data: A Glaring Red Flag

Budget documents contradict each other on state employment numbers. Last year’s Annual Financial Statement (AFS) reported 292,470 employees as of March 2022; this year’s AFS revises that to 290,994. Even grade-wise figures do not align:

Grade	Last Year AFS	Current AFS	Difference
A	22,628	17,539	-5,089
B	41,840	41,813	-27
C	1,54,181	1,59,856	+5,675
D	34,726	34,134	-692
Contingency	39,095	37,652	-1,443
Total	2,92,470	2,90,994	-1,476
Semi-Govt	70,370	61,529	-8,841

This isn’t just clerical error—it raises serious questions about data integrity, budgetary credibility, and whether the Assembly has been misled.

Education: Mission Samrath or Mission Superficial?

The government hailed Mission Samrath as a game-changer, claiming it improved learning outcomes for 14 lakh students and provided training to 70,000 teachers across 19,000 schools. On paper, the initiative looks impressive. But the ground reality tells a starkly different story.

According to the Annual Status of Education Report (ASER) 2024, key learning indicators have actually declined:

• Reading skills (Class 8): Down from 79.1% (2023) to 72.2% (2024)

• Maths proficiency: Down from 62.5% to 58%

• Enrolment in government schools: Down by 90,878—from 24.49 lakh (2023) to 23.58 lakh (2024)

These figures reveal a system in regression, not reform. Despite an expenditure of ₹1,240 crore under Samagra Shiksha, Punjab’s students are falling behind in foundational skills. The steep drop in government school enrolment further suggests a growing lack of public confidence in state-run education.

Mission Samrath, for all its branding and media coverage, appears to be more about optics than outcomes. The focus seems to be on launching new schemes rather than fixing old problems—like outdated pedagogy, shortage of subject-specific teachers, and poor monitoring.

Even teacher training under the mission has been criticized for being overly generic and disconnected from classroom realities. There is little evidence that these workshops have translated into improved pedagogy or student performance.

In essence, the government’s flagship education programme is failing the very students it claims to empower—a troubling indictment of priorities that favour slogans over substance.

Higher Education: Disparities and Political Bias

While the government claims to be championing equitable development in higher education, the actual fund distribution under the Rashtriya Uchchatar Shiksha Abhiyan (RUSA) paints a different picture. Out of the total ₹1,650 crore earmarked for state universities, the allocations reveal a troubling disparity:

• Punjabi University, Patiala: ₹403.75 crore

• Panjab University, Chandigarh + GNDU, Amritsar: ₹209.77 crore combined

This lopsided distribution—where one university receives nearly double the combined funding of two premier institutions—raises serious concerns. There appears to be no transparent academic or infrastructural rationale for such an allocation. Instead, the pattern suggests political favouritism, with funding aligned more with regional loyalties than institutional needs or merit.

This skewed approach risks undermining the state’s academic ecosystem. GNDU and Panjab University serve vast and diverse student populations, and both have long-standing reputations for academic excellence. Starving them of adequate funding not only stunts their growth but also demoralizes faculty and students.

Moreover, the government has failed to initiate long-pending reforms in higher education governance, appointments, and research funding. While a select few universities are showcased for development, others are left grappling with financial strain and staffing shortages. If Punjab’s higher education system is to truly flourish, resource allocation must be based on transparent criteria—not political convenience.

Healthcare: Big Promises, Bitter Pills

On paper, Punjab’s health schemes paint a picture of universal access and compassion. The state boasts of covering 65 lakh families under its health insurance plans—16 lakh through the Centre’s Ayushman Bharat and 29 lakh under the Mukh Mantri Sarbat Sehat Bima Yojana.

An allocation of ₹778 crore is meant to provide ₹10 lakh insurance cover per family annually, supported by an overall health sector budget of ₹5,598 crore.

But beyond the glowing headlines, the reality is bleak. Private hospitals routinely turn away patients due to massive pending dues from the government—rendering the insurance card a worthless piece of plastic. The much-hyped FARISHTEY Scheme, meant to provide immediate aid to accident victims, has a paltry allocation of just ₹10 crore.

As for the promise of free medicines, ₹100 crore has been earmarked for the entire population—a mere ₹65 per person per year. That buys you about three strips of Paracetamol—hardly a symbol of robust public healthcare. In essence, Punjab’s healthcare narrative is one of big promises and small pills—figuratively and literally.

Streetlight Scheme: Promise with Conditions

The ₹115 crore Mukh Mantri Street Light Yojana aims to install 2.5 lakh streetlights outside residential homes, drawing electricity from domestic connections. The government has assured that the units consumed will be adjusted in household electricity bills. While the initiative seeks to improve public lighting, its success will depend on timely implementation and consistent compensation.

MGNREGA: From 100 Days to a Cruel Joke

Once hailed as a lifeline for rural employment, MGNREGA in Punjab has now been reduced to a shadow of its intended self. The promise of 100 days of guaranteed wage employment for rural households has become a bitter joke. Of the 32 lakh families eligible under the scheme, only 19.46 lakh have job cards. Among these, merely 12,550 cardholders received the mandated 100 days of work by 31st March 2025—a dismal coverage of only about 1% of active job cards.

Even worse, the average number of workdays stands at just 37.38, exposing the deep mismatch between policy rhetoric and on-ground implementation. With a potential wage bill close to ₹14,000 crore if the scheme were implemented in full spirit, the actual expenditure is a paltry ₹1,393.2 crore—a staggering shortfall that reflects both administrative apathy and policy neglect. This performance is not just disappointing; it’s the worst across all three key parameters—coverage, days of work, and spending—in the past four years.

While the state government continues to boast about rural development, the real picture tells a story of abandonment—where lakhs of rural families are left to fend for themselves as a once-robust safety net quietly frays at the edges.

Recruitment Frauds & Disregard for Punjabi

It is strange that the Government has turned a blind eye to the recruitment scams of unprecedented proportions that have rocked the state. Multiple exams for government posts—from police to clerical services—have witnessed irregularities that go beyond mere procedural lapses. What’s even more shocking is the influx of candidates from neighbouring states, particularly Haryana, who appear to be sweeping selections in bulk.

A curious pattern has emerged where a majority of selected candidates belong to the Ghaggar belt, spanning both Punjab and Haryana—raising serious questions about fairness, regional representation, and possible manipulation.

One would expect a state-led recruitment process to reflect both regional equity and linguistic alignment. Instead, the mandatory requirement of having passed Punjabi as a compulsory subject at the matriculation level—before the last date of application—has been conveniently diluted or bypassed altogether.

This stands in direct contradiction to the spirit and letter of both the Punjab Learning of Punjabi and Other Languages Act, 2008 and the Punjab Official Language Act, 1967, which were meant to uphold Punjabi not just symbolically, but as an essential functional requirement in public service. The government’s silence and inaction on these violations point to either complicity or sheer indifference—both deeply troubling for a state rooted in linguistic and cultural identity.

Overambitious Revenue Targets

Despite the grandiloquent speeches about economic revival, the revenue receipts tell a tale of stagnation. The total revenue receipts are projected at ₹1,11,740 crore for FY 2025–26—a modest 8% increase over the ₹1,04,394 crore revised estimate for 2024–25. Of this, Own Tax Revenue accounts for ₹63,250 crore, with the state banking heavily on an optimistic rise in GST collections.

On the other side of the balance sheet, revenue expenditure is set to rise from ₹1,32,405 crore to ₹1,35,698 crore—a paltry 2.5% increase that suggests more of a weary stagger than a purposeful stride.

The gap between receipts and expenditure continues to persist, exposing a government more comfortable with announcements than arithmetic. While the budget flaunts token allocations and catchy schemes, the core fiscal math shows little movement. Growth, it appears, has been outsourced to slogans, while stagnation has quietly taken over the spreadsheets.

Comparison of three-year trends shows that actual growth under AAP lags behind its predecessor—even before adjusting for inflation:

This reveals stagnation—not progress. In fact, while the past government increased receipts by ₹16,563 crore over three years, the current government has increased it by ₹16,320 crore in the same duration—a lower nominal gain over a period with higher inflation and increased central transfers.

Worse still, expenditure growth has slowed dramatically—down from ₹20,777 crore in the last three years of the previous regime to only ₹13,477 crore under AAP. This undercuts the narrative of an expansionary, welfare-oriented government. Far from ramping up investment in public services, the data suggests that the government is barely keeping pace.

Rising Debt, Soaring Interest Payments

If Punjab’s economy were a household, it would be maxing out credit cards just to pay off interest on old loans. The state’s debt burden, which stood at ₹2,18,327 crore in 2019–20, ballooned to ₹4,17,136 crore by 2024–25.

Interest payments tell an equally worrying story. From ₹17,567 crore in 2019–20, the interest burden has jumped to ₹23,954 crore in 2024–25. Every rupee borrowed to fund grand announcements today becomes a burden tomorrow—and Punjab’s tomorrow looks increasingly mortgaged.

Punjab’s debt burden has surged under AAP:

Debt has risen by ₹1,02,915 crore under AAP.

Final Verdict: Illusions of Revival, Realities of Ruin

This budget isn’t a roadmap to recovery—it’s a playbook of political optics. Behind every grand announcement lies a deficit of delivery; behind every scheme, a silence on substance. From fudged employment data to failing schools, unpaid hospitals to vanishing MGNREGA jobs—the disconnect is glaring.

With debt mounting, essential services crumbling, and truth increasingly optional, Punjab is not witnessing a revival—it’s staring into a fiscal mirage.

Despite the elaborate presentations and lofty claims, the 2025–26 budget offers little real progress. In sector after sector—education, health, rural employment, fiscal discipline—the gulf between projection and performance is too large to ignore. Instead of genuine reform, the state is being served slogans with shrinking substance.

Punjab needs more than PR. It needs a course correction—rooted in performance, not posturing. This budget proves that narrative-building cannot substitute for numbers—and certainly not for results.

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