Punjab Finance Minister Harpal Singh Cheema on Wednesday presented a Rs 2.36 lakh crore Budget for the fiscal year 2025-26, with a strong focus on tackling drug addiction, improving healthcare, and strengthening rural and urban infrastructure. The Budget, themed ‘Badalda Punjab Roadmap for 2025-26’, aimed at economic consolidation while keeping populist measures in check, notably making no provisions for the Rs 1,100 monthly grant to women — one of the key election “guarantees” of the Aam Aadmi Party (AAP).

This marked the fourth Budget presented by the AAP-led Punjab Government, continuing its emphasis on welfare schemes, youth engagement, and industrial growth. While no new taxes were introduced, the Budget underlined the state’s financial challenges, with an outstanding debt of Rs 3.96 lakh crore by the end of the current fiscal, and a proposed Rs 49,900 crore loan to meet financial requirements.

Stating that this year’s budget set the stage for economic revival, fiscal consolidation, and transformative governance, Cheema noted that the state’s Gross State Domestic Product (GSDP) projected to touch Rs 8,91,301 crore, reflecting a 10 percent growth, which is “a good sign of improvement in state’s economy”. Cheema also emphasized the government’s success in boosting own tax revenue by 14 percent with an estimated Rs 63,250 crore expected in the upcoming fiscal year.

The budget outlined AAP’s bold vision focusing on transformative initiatives across various sectors. From a war on drugs to massive sports investments, rural revival programs, universal healthcare, and industrial incentives, the budget sought to uplift every segment of society.

Among the key announcements and initiatives include the first-ever Drug Census; recruitment of state’s 5000 youth as home guards to prepare a ‘second line of defense’ at Indo-Pak border, deploying anti-drone system to check cross border smuggling, as a part of its ongoing war against drugs. Cheema also announced expansion of the Sehat Bima Yojna covering state’s all 65 lakh families with free health insurance while also doubling the increasing cover from Rs five lakhs to Rs 10 lakhs.

Also giving a major boost to the sports under ‘Khed Da Punjab, Badalda Punjab’, the budget also aimed to give a massive push to infrastructure development across all districts by allocating Rs five crore to each of 117 constituencies. In another major relief, a loan waiver has been announced for Scheduled Caste beneficiaries, who defaulted on loans taken from the Punjab Scheduled Castes Land Development and Finance Corporation (PSCFC) until March 31, 2020 — benefiting 4,650 individuals and providing them a chance to rebuild their lives.

Boasting of the state’s improved financial situation while quoting figures, Cheema pointed that the Fiscal Deficit stood at 3.84 percent of GSDP, adhering to responsible financial management, while the effective revenue deficit stands at 2.51 percent — indicating a steady path to fiscal sustainability. The Debt-to-GSDP ratio has improved to 44.50 percent, from 44.70 percent, reflecting better fiscal discipline compared to previous years.

Cheema also boasted of Punjab’s increased own tax revenue by 14 percent, reaching an estimated Rs 63,250 crore for 2025-26, up from Rs 57,919 crore in 2024-25 (RE). The GST receipts alone are projected to rise to Rs 27,650 crore — the highest-ever estimate for the state, while excise revenue is expected to reach Rs 11,200 crore, continuing a 63 percent surge since 2021-22.

War on Drugs: A Multi-Faceted Approach

Describing drugs as the “biggest threat to the progress and prosperity” of Punjab, Cheema announced the launch of ‘Yudh Nashe De Virudh’ — a statewide anti-drug campaign that has already led to 2,136 FIRs and 3,816 drug smuggler arrests. In one of the one of the most aggressive measures, Cheema announced deployment of 5,000 home guards along the border to combat cross-border trafficking and creating a second line of defense. In a groundbreaking move, the state will invest Rs 110 crore in advanced anti-drone systems to intercept drug-laden drones from across the border. Additionally, a first-ever ‘Drug Census’ will be conducted, with Rs 150 crore allocated for data-driven policymaking to tackle addiction effectively.

Strengthening Law and Order

Punjab’s law enforcement will also undergo a major revamp with the largest-ever expansion of Emergency Response Vehicles (ERVs). The budget allocates Rs 125 crore for 758 new four-wheelers and 916 two-wheelers, aiming to reduce police response time from 30 minutes to just eight minutes — to be the fastest in India. Additionally, Rs 53 crore is earmarked for a state-of-the-art ‘Dial 112’ headquarters in Mohali.   

Khed-da Punjab, Badalda Punjab

Recognizing sports as a powerful alternative to drugs, Punjab has launched its largest-ever sports initiative, ‘Khed-da Punjab, Badalda Punjab’. Every village will get playgrounds with running tracks, children’s play areas, and solar lighting. A historic Rs 979 crore allocation — the highest ever — will fund 3,000 indoor gyms, modernize 13 Centers of Excellence, and develop facilities for a “locally popular sport” in every village playground like volleyball, football, hockey, kabaddi, and others.   

Universal Health Insurance: Rs 10L Cover for All Families

In a historic move, Punjab will provide universal health insurance, covering state’s all 65 lakh families under the Mukh Mantri Sarbat Sehat Bima Yojana. Cheema announced doubling the insurance cover to Rs 10 lakh per annum, with a Rs five lakh top-up for Centre’s Ayushman Bharat beneficiaries. Additionally, families will receive Sehat Cards for cashless treatment in government and private hospitals. For the same, Punjab has also allocated Rs 778 crore, part of a Rs 5,598 crore health sector budget — reflecting a 10 percent increase over the previous year. “There will be no bar or discrimination - rural or urban, rich or poor everyone can participate in this scheme,” Cheema clarified.

AAP Government’s ambitious Farishtey Scheme also gets Rs 10 crore for accident victims’ emergency care; while allocating Rs 268 crore for expansion of Aam Aadmi Clinics, currently 881 in number.

Reviving Rural Punjab with Rs 6,373-cr Boost

Cheema unveiled ‘Badalde Pind, Badalda Punjab’ initiative, committing Rs 3,500 crore for infrastructure development across 12,581 villages in the next two years. Key projects include pond rejuvenation, sewage treatment, Nehri Khaal (irrigation channels) restoration, new village playground construction, and streetlight installation. Additionally, Rs 2,873 crore has been allocated to upgrade or construct 18,944 km of rural link roads by Punjab Mandi Board, ensuring seamless connectivity. “Our goal will be to ensure that there doesn’t remain a single link road that is broken after a year,” said Cheema.

Rangla Punjab Vikas Scheme: Rs 5-cr to Each Constituency

To ensure holistic district-wise development, Cheema announced Rs 585 crore ‘Rangla Punjab Vikas Scheme’, under which Rs five crore per constituency will be allocated for roads, bridges, healthcare, education, water, and sanitation. The fund, to be administered by the Deputy Commissioners, will be utilized based on inputs from MLAs, community groups, and citizens to address local needs and restore Punjab’s lost glory.

Urban Transformation with Rs 5,983-cr Push

Cheema announced a Rs 140 crore project to build 50 km of world-class roads in Ludhiana, Amritsar, Jalandhar, and Mohali — a first-of-its-kind initiative. Designed by top architects, these roads will feature redesigned lanes, obstruction-free footpaths, aligned public utilities, and 10-year contractor-led maintenance with mechanized cleaning. Additionally, Rs 225 crore is allocated to improve essential municipal services in all 166 towns and cities, ensuring better cleanliness, water supply, sewage, roads, and streetlights. To enhance public transport, 347 e-buses will be procured, and major bus depots upgraded, besides Rs 300 crore for Punjab Municipal Services Improvement Project to strengthen urban governance, finances, and delivery of sustainable water services to the citizens of Amritsar and Ludhiana city. In all, Rs 5,983 crore has been allocated for housing and urban development.

New Scheme to Illuminate Villages with 2.5L Streetlights

Cheema announced a new scheme — Mukh Mantri Street Light Yojana — with a Rs 115 crore allocation to install 2.5 lakh streetlights across villages and towns. In a first-of-its-kind model, lights will be installed outside homes, drawing power from domestic connections, with consumed units deducted from household bills. Additionally, Rs 7,614 crore has been earmarked for 300 free units of power per month for domestic consumers.

Industrial and Economic Revival

A historic Rs 250 crore allocation has been made for financial incentives to industries — the highest in the state’s history. Cheema said: “In contrast, the previous Congress government spent only Rs 53 crore in five years, while the Akali-BJP regime allocated nothing.” Further, to promote national integration and Punjab’s industrial growth, an Rs 80 crore ‘Unity Mall’ will be set up in Amritsar, featuring stalls from all States or UTs and Punjab’s 23 districts to support artisans and entrepreneurs. Additionally, Rs 120 crore under the Raising and Accelerating MSME Performance (RAMP) Scheme will support MSMEs, while Rs 3,426 crore is earmarked for subsidized power, besides Rs 10 crore for upgradation of R&D Centre and the Institute of Auto Parts and Hand Tools Technology (IAHT) in Ludhiana.

Major Boost for Welfare, Social Justice

Cheema also announced Rs 9,340 crore allocation for social welfare, ensuring support from birth to old age. He also announced a loan waiver scheme, benefitting 4,650 Scheduled Caste beneficiaries who defaulted on loans from PSCFC before March 31, 2020. The key allocations include Rs 6,175 crore for financial aid to the elderly, widows, destitutes, and persons with disabilities; Rs 1,177 crore for Nutrition and ICDS; Rs 360 crore for the Ashirwad Scheme; and Rs 262 crore for various scholarship programs. The government has also allocated Rs 450 crore to continue free bus travel scheme for women. A whopping Rs 13,987 crore has been allocated to the Scheduled Caste Sub-Plan (SCSP), accounting for 34 percent of the State's total development budget.

Focus on Crop Diversification; Horticulture

Cheema also allocated Rs 14,524 crore for agriculture and allied sectors in 2025-26, marking a five percent increase from the previous year. To incentivize crop diversification, a new scheme in Bathinda, Kapurthala, and Gurdaspur will encourage farmers to shift 21,000 hectares from paddy to Kharif maize, supporting India’s 20 percent ethanol blending target. Farmers will receive a Rs 17,500 per hectare subsidy, benefiting 30,000 farmers, with Rs 115 crore allocated for crop diversification initiatives.

Under Krishonnati Yojana, Rs 149 crore is earmarked for agriculture extension, food security, horticulture, seed development, and digital agriculture. Additionally, Rs 9,992 crore is allocated for power subsidies to farmers. Punjab will also launch a Rs 137 crore Natural Farming initiative in five districts — Amritsar, SBS Nagar, Ropar, Mohali, and Hoshiarpur — promoting eco-friendly practices through awareness programs, farmer incentives, and training support.

Stubble Management, Water Conservation Efforts

A total of Rs 560 crore has been allocated to tackle stubble burning and promote sustainable agriculture — of which Rs 60 crore will support industries adopting paddy stubble-based boilers, utilizing three million tonnes of crop residue annually; while Rs 500 crore will assist farmers, cooperatives, and gram panchayats in purchasing Crop Residue Management (CRM) machines and developing supply chains. For water conservation, Rs 100 crore is earmarked for strengthening canal irrigation in Sangrur, benefiting 20,000 farmer families, covering 38,000 hectares.

Rs 17,975-cr Education Budget

Cheema allocated Rs 17,975 crore for education — 12 percent of total expenditure — aiming for transformative reforms. Key allocations include Rs 1,240 crore for Samagra Shiksha Abhiyan, Rs 466 crore for PM Poshan, Rs 75 crore for free books, and Rs 35 crore for uniforms. Higher education gets Rs 199 crore under RUSA and Rs 160 crore for infrastructure upgradation; while technical education sees Rs 579 crore for upgrading infrastructure, new courses, skill development and ITI expansion. Total Rs 1,336 crore has been allocated for Medical Education, including setting up a new medical college, with 50 MBBS seats, at Barnala Kalan in Nawanshahr. Additionally, Rs 1,650 crore is earmarked as grants-in-aid for state universities.

Enhanced Prison Security, Police Infrastructure

A Rs 11,560 crore allocation strengthened home affairs, including AI-powered CCTV in jails, V-Kavach jammers, and inmate rehabilitation. Rs 233 crore is earmarked for modernizing police infrastructure, while Rs 132 crore will fund new court complexes in Derabassi, Khanna, and Patran. Additionally, Rs 100 crore is set aside for jail infrastructure upgrades.

Rs 3,246-cr for Water Management, Irrigation

Allocation of Rs 3,246 crore has been made for irrigation and water conservation. With an investment of Rs 2,604 crore, the Shahpur Kandi Dam is expected to generate 1,042 MU hydroelectricity and irrigating 1.55 lakh hectares. Additionally, Rs 85 crore will fund 207 new tubewells — including 40 deep and 167 shallow; while Rs 315 crore is set for canal rejuvenation. With groundwater extraction at 166 percent, Rs 8,227 crore worth of surface water projects are planned to ensure sustainable water management across Punjab.

BOX---------------------I

Budget Allocation for Various Departments

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Major Initiatives

·         First-ever Drug Census to assess drug addiction patterns

·         Anti-drone systems to intercept drug smuggling across borders

·         5,000 home guards to be deployed along the border

·         Universal Health Insurance, covering all 65 lakh families with a Rs 10 lakh per annum insurance cap

·         Loan waiver for PSCFC loan defaulters

·         Rs 3,500 crore for rejuvenating 12,581 villages with better sewage, irrigation, and streetlights

·         Rs 2,873 crore for repairing village link roads

·         Rs 5 crore per constituency for holistic development

·         Rs 5,983 crore for urban infrastructure, including Rs 140 crore for world-class roads

·         Rs 25,564 crore for power subsidy, including Rs 9,992 crore for farmers; Rs 7,614 crore for 300 units of free electricity for domestic consumers; Rs 3,426 crore for industries

·         Rs 500 crore for stubble management to curb pollution

·         Rs 315 crore for canal rejuvenation

·         3,000 indoor gyms and playgrounds in villages

·         Rs 80 crore for ‘Unity Mall’ in Amritsar to showcase artisans' products

·         Rs 10 crore to develop Nangal as a tourism hub