Policy Update
Anjali Singh
Background
Punjab, with a geographical area of 50,362 sq km and a population of 2.77 crore as per Census 2011, is the sixteenth most populous state in India and one of its smallest by area, contributing about 1.5 percent of the national land mass while supporting roughly 2.3 percent of its population. The state has 23 districts and a population density of 551 persons per sq km, among the highest in the country. Punjab shares an international border with Pakistan and internal borders with Jammu and Kashmir, Himachal Pradesh, Haryana and Rajasthan, and its capital, Chandigarh, is a shared Union Territory with Haryana.
The economy remains predominantly agrarian, anchored in the paddy wheat cropping cycle that powered the Green Revolution, but this legacy has produced acute groundwater stress. The state’s own 2025-26 assessment placed groundwater extraction at 152.22 percent of the annually extractable resource, and in a statement to the Rajya Sabha on 9 March 2026, Member of Parliament Satnam Singh Sandhu said that 19 of the state’s 23 districts fall under the groundwater dark zone; the department-wise section below sets out the underlying block-level CGWB data in more detail.
The Aam Aadmi Party government, led by Chief Minister Bhagwant Mann since March 2022, presented its fifth budget for the state on 8 March 2026, coinciding with International Women’s Day. The budget, presented by Finance Minister Harpal Singh Cheema, set a total outlay of Rs 2,60,437 crore for 2026-27 against a projected Gross State Domestic Product (GSDP) of Rs 9,80,635 crore, implying growth of around 10 percent over the previous year. Total revenue receipts for 2026-27 are estimated at Rs 1,26,190 crore, of which Rs 70,851 crore is expected from own tax revenue and Rs 15,687 crore from non tax revenue.
Total expenditure, excluding debt repayment, is targeted at Rs 1,66,711 crore, an increase of 7 percent over the revised estimate for 2025-26. The revenue deficit is targeted at 2.06 to 2.2 percent of GSDP and the fiscal deficit at around 4.08 to 4.1 percent of GSDP, within limits set by the Punjab Fiscal Responsibility and Budget Management Act, 2003. As of 31 March 2026, the state’s outstanding guarantee on the borrowings of state public sector enterprises stood at an estimated Rs 23,654 crore, or 2.7 percent of GSDP. Welfare delivery in the state continues to rely on Direct Benefit Transfer through bank accounts, alongside expanding networks of Aam Aadmi Clinics and government schools under the Sikhiya Kranti reform programme.
The department-wise list below draws on the budget speech, the detailed Punjab State Budget Analysis 2026-27 published by PRS Legislative Research, and contemporaneous reporting to cover a wider spread of departments than a single budget speech summary typically allows, spanning welfare, agriculture and allied sectors, water and environment, industry and infrastructure, and local governance.
Punjab Budget 2026-27 – Department Wise Schemes List
The entries below for the Finance Department are budgetary and fiscal measures rather than welfare schemes, and are presented separately for that reason.
Finance Department
Measure: State Budget 2026-27, Period: Financial year 2026-27, presented 8 March 2026, Key Details: Overall fiscal plan of the state government, with a total outlay of Rs 2,60,437 crore against a projected GSDP of Rs 9,80,635 crore, presented by Finance Minister Harpal Singh Cheema, Coverage: All departments across 23 districts, Latest Estimate: Rs 2,60,437 crore total outlay Measure: Own Tax Revenue Mobilisation, Period: Financial year 2026-27, Key Details: State GST is the largest source of own tax revenue at an estimated 45 percent share of the total, with State GST revenue projected to rise 19 percent and stamp duty and registration revenue projected to rise 29 percent over the 2025-26 revised estimate, Coverage
Statewide, Latest Estimate: Rs 70,851 crore own tax revenue estimated for 2026-27 Measure: Public Debt and Debt Servicing, Period: 2026-27, Key Details: Rising committed expenditure, with public debt projected to reach about Rs 4,47,754 crore by 2026-27 and interest payments budgeted at Rs 28,755 crore, accounting for roughly 23 percent of the state’s revenue receipts of Rs 1,26,190 crore for the year, Coverage: Statewide, affecting fiscal headroom for all departments, Latest Estimate: Rs 28,755 crore budgeted for interest payments in 2026-27
Department of Social Security, Women and Child Development Scheme:
Mukh Mantri Mawan Dhian Satikar Yojana, Launch Year: 8 March 2026, Key Details: Monthly direct cash transfer of Rs 1,000 to eligible women aged 18 and above and Rs 1,500 to women from Scheduled Caste communities, excluding current or former government employees, MPs, MLAs and income taxpayers, Coverage: About 97 percent of women in the state, Latest Budget: Rs 9,300 crore Scheme: Free Bus Travel Scheme for Women, Launch Year: Ongoing, Key Details: Free travel for women on state-run buses, continued under the 2026-27 budget, Coverage
Statewide, Latest Budget: Rs 600 crore Scheme: Social Security Pensions, Launch Year: Annual, Key Details: Financial assistance for old age persons, widows and destitute persons, Coverage: Statewide, Latest Budget: Rs 6,150 crore Scheme: Integrated Child Development Services and Navi Disha Scheme, Launch Year: Annual, Key Details: Nutrition and early childhood support through anganwadis, along with free sanitary pads for adolescent girls and women under the Navi Disha scheme, Coverage: Statewide, Latest Budget: Rs 932 crore for ICDS and Rs 65 crore for the Navi Disha scheme
Health and Family Welfare Department Scheme:
Mukh Mantri Sehat Bima Yojana, Launch Year: 2026-27, Key Details: Cashless health insurance cover of up to Rs 10 lakh per family per year with no income ceiling, Coverage: About 65 lakh families, Latest Budget: Rs 2,000 crore Scheme: Aam Aadmi Clinics, Launch Year: 2022 onward,
Key Details: Primary healthcare network offering essential medicines and diagnostic tests free of cost expanding from 881 existing clinics with 143 new clinics and the upgrading of 308 subsidiary health centres, along with a new trauma centre and a mother and child care hospital planned at Anandpur Sahib, Coverage: 1,432 clinics on completion of 2026-27 expansion, Latest Budget: Rs 300 crore for medical equipment and Rs 1,220 crore for medical education and research, within a total health sector allocation of Rs 6,879 crore
School Education Department Scheme:
Sikhiya Kranti 2.0, Launch Year: 2026-27, Key Details: Six year school infrastructure and quality improvement programme undertaken in collaboration with the World Bank, Coverage: Government schools statewide, Latest Budget: Rs 3,500 crore over six years, within a total school education allocation of Rs 19,279 crore for 2026-27
Higher Education and Technical Education Department Scheme:
Technical Education Initiatives and Guru Tegh Bahadur University, Launch Year: 2026-27, Key Details: Budgetary support for technical education programmes along with in principle approval for a new university named after Guru Tegh Bahadur at Anandpur Sahib, Coverage: Technical institutions statewide, Latest Budget: Rs 569 crore for technical education initiatives in 2026-27
Agriculture and Farmers Welfare Department Scheme:
Agricultural Power Subsidy and Crop Diversification, Launch Year: 2026-27, Key Details: Free power supply to agricultural tube well connections, crop residue management support to curb stubble burning and financial support for Direct Seeded Rice to conserve groundwater, alongside a target of diversifying 60,000 hectares from paddy to maize in identified districts, Coverage: Farming households statewide, Latest Budget: Rs 15,377 crore for agriculture and allied sectors, including Rs 7,715 crore for agricultural power subsidy, Rs 600 crore for crop residue management and Rs 40 crore for Direct Seeded Rice promotion Scheme: Farm Machinery Subsidy, Launch Year: 2026-27
Key Details: Subsidy for farm machinery used in in-situ crop residue management, covering 80 percent of cost for machinery purchased by Panchayats, cooperative societies and farmer groups and 50 percent of cost for individual farmers, Coverage: Panchayats, cooperative societies and individual farmers statewide, Latest Budget: Rs 600 crore proposed for 2026-27 Scheme: Ban on Sale and Cultivation of the PUSA-44 Paddy Variety, Launch Year: Announced October 2023, reinforced April 2025, Key Details: Administrative order of the Department of Agriculture and Farmers Welfare denotifying the long-duration, water-intensive PUSA-44 variety and prohibiting its sale
first announced by Chief Minister Bhagwant Mann in October 2023 and reinforced through departmental field instructions in April 2025, in favour of shorter-duration varieties such as PR-126; the ban on non-notified paddy varieties, including PUSA-44, was upheld by the Punjab and Haryana High Court in August 2025, which in the same order quashed a related state ban on hybrid paddy seeds, Coverage: Seed dealers and paddy growers statewide, concentrated in Malwa districts such as Sangrur, Moga, Mansa and Barnala, Latest Budget: Enforced through departmental orders; no separate budget line disclosed
Horticulture Department Scheme:
Climate-Resilient and High-Value Horticulture Programme, Launch Year: 2026-27 to 2035, Key Details: Ten-year programme implemented in partnership with the Japan International Cooperation Agency (JICA) to promote climate-resilient and high-value horticulture, with a target of increasing the acreage under fruits and vegetables by 300 percent by 2035, Coverage: Horticulture growers statewide, Latest Budget: Programme cost not separately disclosed in the 2026-27 budget documents reviewed
Food, Civil Supplies and Consumer Affairs Department Scheme:
Meri Rasoi Scheme, Launch Year: 2026-27, Key Details: New scheme to strengthen food and nutrition security for vulnerable households by providing free ration kits every three months to families covered under the National Food Security Act (NFSA) and the Smart Ration Card scheme, Coverage: About 40 lakh families statewide, Latest Budget: Rs 900 crore for 2026-27
Power Department and Punjab State Power Corporation Limited (PSPCL) Scheme:
Free Electricity Scheme (300 Units), Launch Year: 2022 onward, Key Details: First 300 units of electricity per month, or 600 units per bimonthly billing cycle, supplied free to domestic consumers, with the Punjab State Electricity Regulatory Commission’s FY 2026-27 tariff order, effective 1 April 2026, further reducing the domestic tariff for consumption up to 300 units from Rs 5.40 to Rs 3.85 per unit and for consumption above 300 units from Rs 7.75 to Rs 7.05 per unit, Coverage: More than 90 percent of domestic households
Latest Budget: PSPCL reported a profit of Rs 2,634 crore for the year ended 31 March 2025 and holds an A plus credit rating Scheme: Total Power Subsidy Outlay, Launch Year: 2026-27, Key Details: Combined electricity subsidy routed through PSPCL, covering free power to agriculture and subsidised power to domestic and other consumer categories, Coverage: Agricultural and domestic consumers statewide, Latest Budget: Rs 15,550 crore budgeted for 2026-27
Water Resources and Irrigation Department Scheme:
Shahpurkandi Multipurpose Project, Launch Year: Completed 2025, Key Details: Multipurpose dam on the Ravi river with two hydropower plants of a combined 206 MW capacity, aimed at utilising Punjab’s share of river water under the Indus Waters Treaty, Coverage: Border districts along the Ravi river, Latest Budget: Rs 3,300 crore project cost Scheme: Canal Based Irrigation Expansion, Launch Year: 2026,
Key Details: Expansion of canal-based water delivery, including to tail-end areas, to reduce dependence on tube wells amid a groundwater crisis; five blocks moved out of the over-exploited category into the critical category following improved canal access in the state’s 2025-26 assessment cycle, Coverage: Over-exploited and critical groundwater blocks statewide, Latest Budget: Not separately disclosed in public budget documents reviewed
Ground Water Department Scheme:
Dynamic Groundwater Resource Assessment, State Report 2025-26, Launch Year: 2025-26 assessment cycle, Key Details: State assessment, prepared by a ten-member state committee, placed annual groundwater extraction at 152.22 percent of the state’s annually extractable resource of 17.29 billion cubic metres (BCM), against annual recharge of 19.14 BCM; agriculture accounted for 24.95 BCM of the 26.32 BCM extracted; 110 of the state’s 153 assessed blocks remained over-exploited, though the rate of decline slowed in 95 assessed blocks compared with the previous cycle, Coverage: 153 assessment blocks statewide,
Latest Budget: Departmental assessment, not a budgeted scheme Scheme: CGWB Dynamic Ground Water Resource Assessment 2024 (National Report), Launch Year: 2024 assessment, released January 2025, Key Details: National assessment prepared jointly by the Central Ground Water Board (CGWB) and the state government classified 114 of Punjab’s 150 assessed blocks (76.47 percent) as over-exploited, 3 blocks (1.96 percent) as critical, 13 blocks (8.5 percent) as semi-critical and 20 blocks (13.07 percent) as safe, Coverage: 150 assessment blocks statewide, Latest Budget: Periodic national assessment, not a budgeted scheme
Separately, in a statement to the Rajya Sabha on 9 March 2026, Member of Parliament Satnam Singh Sandhu said that 19 of Punjab’s 23 districts fall under the groundwater dark zone, and cited the CGWB’s Annual Ground Water Quality Report 2025 to state that uranium levels exceeded the safe limit of 30 parts per billion in 62.5 percent of the state’s post-monsoon groundwater samples and 53.04 percent of its pre-monsoon samples, the highest contamination level recorded among Indian states. This is a parliamentary statement rather than a district-level classification published by the CGWB, whose own assessment units are blocks rather than districts, and it is presented here as such.
Water Supply and Sanitation Department Scheme:
Nal Jal Mitra Initiative, Launch Year: 2026-27, Key Details: New initiative under which one person in every Gram Panchayat is trained to strengthen community-level water service delivery and the upkeep of rural water supply infrastructure, Coverage: All Gram Panchayats statewide, Latest Budget: Not separately disclosed in public budget documents reviewed
Science, Technology and Environment Department Scheme:
National Clean Air Programme (NCAP) Implementation, Launch Year: 2019-20 to 2025-26, Key Details: Centrally sponsored programme for city-level air quality action plans, for which a parliamentary standing committee report on the Union Demand for Grants 2026-27 recorded that Punjab had utilised 67 percent of the central assistance released to it between 2019-20 and December 2025, Coverage: Identified non-attainment cities in Punjab, Latest Budget: Centrally funded; state-specific 2026-27 allocation not separately disclosed
Industries and Commerce Department Scheme:
Fiscal Incentives and Fast Track Punjab Portal, Launch Year: 2026-27, Key Details: Fiscal incentives to industrial units combined with a single-window Fast Track Punjab Portal intended to speed up regulatory clearances and improve ease of doing business, Coverage: Industrial units statewide, Latest Budget: About Rs 500 crore in fiscal incentives
Mines and Geology Department Scheme:
Minor Mineral Rules Reform and State Mining Readiness Index, Launch Year: 2026-27, Key Details: Reforms to minor minerals rules, including the introduction of designated crusher and landowner mining sites, following which Punjab was ranked at the top of the State Mining Readiness Index for reforms in the minor mineral sector, Coverage: Mining and quarrying areas statewide, Latest Budget: Not separately disclosed in public budget documents reviewed
Employment Generation and Training Department Scheme:
Ghar Ghar Rozgar Yojana, Launch Year: Ongoing, Key Details: Single online portal for job seekers and employers that publicises job openings, conducts employment generation drives and offers skill training and placement facilitation for unemployed youth, Coverage: Job seekers statewide, Latest Budget: Rs 5 crore initially earmarked for launching the scheme
Social Justice, Empowerment and Minorities Department Scheme:
Post-Matric Scholarship Scheme for Scheduled Caste Students, Launch Year: Reported February 2025, for 2024-25, Key Details: Central sector scholarship scheme under which the state released its share of funds directly to beneficiaries’ bank accounts to support Scheduled Caste students from economically disadvantaged families in completing their post-matriculation education, Coverage: 86,583 students, Latest Budget: Rs 55.45 crore released as the state’s share for 2024-25 Scheme:
Ashirwad Scheme for Scheduled Castes, Launch Year: Reported for the 2023-24 session, Key Details: Marriage assistance scheme for daughters of Below Poverty Line families belonging to Scheduled Castes, backward classes or other economically weaker sections, with eligibility limited to two daughters per family where annual family income is below Rs 32,790, Coverage: 6,314 beneficiaries across nine districts including Hoshiarpur, Sangrur, Moga and Gurdaspur, Latest Budget: Rs 32.20 crore released from the 2024-25 budget
Rural Development and Panchayats Department Scheme:
Rural Employment Scheme (MGNREGA, State Component), Launch Year: 2026-27, Key Details: State budgetary support to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to create employment and strengthen rural livelihoods, Coverage: Rural job card holders statewide, Latest Budget: Rs 1,500 crore for 2026-27 Scheme: Mukh Mantri Tirath Yatra Scheme,
Launch Year: 2026-27, Key Details: Free and fully supported pilgrimages, mainly for senior citizens and economically weaker sections, to religious destinations including Sri Harmandir Sahib and Sri Anandpur Sahib, Coverage: About 7.15 lakh citizens, Latest Budget: Rs 312 crore for 2026-27 Scheme: Rural Housing Construction, Launch Year: 2026-27, Key Details: Construction of new houses for eligible rural households, Coverage: 1 lakh new rural houses targeted, Latest Budget: Rs 800 crore for 2026-27
Housing and Urban Development Department Scheme:
Urban Development and GIS-Based City Mapping, Launch Year: 2026-27, Key Details: Urban infrastructure development combined with GIS-based city mapping intended to improve civic services and municipal planning, Coverage: Urban local bodies statewide, Latest Budget: Rs 7,257 crore for 2026-27
Public Works Department Scheme:
Urban and Rural Road Upgradation, Launch Year: 2026-27, Key Details: Upgrading and widening of urban and rural roads, spanning about 2,570 km, along with the construction of 31 new bridges, Coverage: Road network statewide, Latest Budget: Rs 5,440 crore for 2026-27
Transport Department Scheme:
Public Bus Fleet Expansion, Launch Year: 2026-27, phased deployment by November 2026, Key Details: Addition of 1,279 new buses to the existing state fleet of 2,267 buses, alongside continuation of free bus travel for women and improved services on high-demand routes, Coverage: Public bus commuters statewide, Latest Budget: Fleet expansion cost not separately disclosed; the free travel component is budgeted at Rs 600 crore under the Department of Social Security, Women and Child Development
Sixteenth Finance Commission Devolution to Local Bodies Scheme:
Local Body and Disaster Management Grants, 2026-31, Launch Year: 2026-31, Key Details: Sixteenth Finance Commission grants to Punjab for the 2026-31 award period, including a dedicated infrastructure grant for wastewater management in Ludhiana and Amritsar, Coverage: Urban and rural local bodies statewide, with Ludhiana and Amritsar eligible for the wastewater grant, Latest Budget: Rs 8,486 crore for rural local bodies, Rs 7,834 crore for urban local bodies, Rs 2,477 crore for disaster management and up to Rs 5,000 crore each for Ludhiana and Amritsar wastewater management
Defence Services Welfare Department Scheme:
Welfare Services for Ex-Servicemen and Their Dependents, Launch Year: Reported for 2024-25, Key Details: Welfare support for military veterans and their dependents, including an increase in the pension for war jagirs from Rs 10,000 to Rs 20,000 per annum, grant-in-aid to the Mai Bhago Armed Forces Preparatory Institute for girls and the Maharaja Ranjit Singh Armed Forces Preparatory Institute for boys at Mohali, funding for the Sainik School in Kapurthala, and gallery upgrades at the War Memorial Complex in Amritsar;
Punjab has the second-highest number of registered ex-servicemen in India, at more than 3.27 lakh, and the highest number of war widows, Coverage: More than 3.27 lakh registered ex-servicemen and their dependents statewide, Latest Budget: Rs 77 crore for 2024-25, down from Rs 84 crore in 2023-24 and Rs 130 crore in 2022-23; a separate 2026-27 figure was not available in the sources reviewed
Cooperation Department Scheme:
State Focus Paper 2026-27 (NABARD), Launch Year: 2026-27, Key Details: Priority sector credit potential identified for the state at a seminar organised by NABARD in Mohali, chaired by the Finance Minister, Coverage: Priority sector borrowers statewide, Latest Budget: Rs 3.08 lakh crore priority sector credit potential projected for 2026-27
The department-wise entries above are limited to schemes and measures for which specific budget figures and dates are available in the Punjab Budget 2026-27 documents, the Punjab State Budget Analysis 2026-27 published by PRS Legislative Research and contemporaneous government and think tank reporting.
Punjab’s own state government web portal lists 53 departments, while the Government of India’s Integrated Government Online Directory lists 39; this update covers 23 of them. It is therefore not an exhaustive account of every department of the Government of Punjab, and figures for departments not listed here, or for which only an older year’s figure could be verified, have been dated accordingly and have not been independently verified for 2026-27 as of the date of this update.
Conclusion
The Punjab Budget 2026-27 reflects a welfare-oriented approach centred on a universal cash transfer for women, an expanding network of primary health clinics, a multi-year school reform programme and continued subsidy support for agriculture and domestic electricity consumption, alongside a broader spread of allocations across rural development, urban infrastructure, roads, transport, horticulture and food security that a summary limited to the largest schemes would otherwise leave out.
With a total outlay of Rs 2,60,437 crore against a projected GSDP of Rs 9,80,635 crore, the budget maintains fiscal deficit targets within the limits of the state’s Fiscal Responsibility and Budget Management Act while directing a large share of new spending toward social security, health and education. At the same time, structural constraints, particularly the extent of groundwater over-extraction, the narrow window for canal-based alternatives and the state’s reliance on indirect taxes such as GST and excise revenue from liquor, remain central to the state’s long-term development challenge and will continue to shape the design of its agriculture, water resource and revenue mobilisation measures in the years ahead.
References
- PRS Legislative Research, Punjab Budget Analysis 2026-27 — https://prsindia.org/budgets/states/punjab-budget-analysis-2026-27
- PRS Legislative Research, Punjab State Budget Analysis 2026-27 (detailed PDF) — https://prsindia.org/files/budget/budget_state/punjab/2026/Budget_Analysis_2026-27-PB.pdf
- News on Air, Prasar Bharati, Punjab government announces Rs 2.60 lakh crore outlay — https://www.newsonair.gov.in/punjab-government-announces-%E2%82%B92-60-lakh-crore-outlay-with-focus-on-welfare-and-development/
- The Tribune, Rs 1,000 per month cash dole for women, no new taxes in Punjab Budget — https://www.tribuneindia.com/news/punjab/1k-month-cash-dole-for-women-no-new-taxes-in-punjab-budget/
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- Indian Masterminds, Punjab Budget 2026-27, Rs 2.6 lakh crore for health, education, agriculture, women empowerment and infrastructure development — https://indianmasterminds.com/news/punjab-budget-2026-27-meri-rasoi-scheme-health-education-infrastructure-190038/
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- News on Air, Prasar Bharati, Punjab government releases Rs 55.45 crore for SC students under Post-Matric Scholarship Scheme — https://www.newsonair.gov.in/punjab-govt-releases-%e2%82%b955-45-cr-for-sc-students-under-post-matric-scholarship-scheme
- The Tribune, Rs 32.20 crore released to 6,314 SC beneficiaries under the Ashirwad Scheme — https://www.tribuneindia.com/news/punjab/rs-32-20-crore-released-to-6-314-sc-beneficiaries-baljit-kaur-639255/amp
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- Punjab State Electricity Regulatory Commission, Tariff Orders — https://pserc.punjab.gov.in/pages/tariff-orders.html
- Sixteenth Finance Commission, Government of India, Report for 2026-31, Volume I, Main Report — https://cdnbbsr.s3waas.gov.in/s316026d60ff9b54410b3435b403afd226/uploads/2026/05/202605201532742448.pdf
- Press Information Bureau, Government of India, Rural Local Body grants recommended by the Sixteenth Finance Commission — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2298161®=1&lang=1
About the Contributor
Anjali Singh is currently an M.A Political Student at Hindu College , University of Delhi. Her academic interests lie at the intersection of social inclusion , gender development and urban mobility.
Acknowledgements
The author acknowledges the reviewer Prisha Sachdeva Karnavi Shende and Anamika P K for their valuable comments and suggestions on this policy update.
Disclaimer
All views expressed in the article belong solely to the author and do not necessarily represent the views or policies of the organisation.
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