Punjab’s budgetary borrowing jumps 145pc

Dawn reported that Punjab's borrowing from banks for budgetary support reached Rs753.4 billion between July 1 and Aug 21, according to fresh State Bank data. That compares with Rs306.8bn over the same stretch of the previous fiscal year, a rise of more than 145 per cent. The figures point to growing liquidity pressure in the country's largest province.

Federal borrowing for the same purpose stood at Rs571bn over those seven weeks, below Punjab's total. The World Bank, in a recent report cited by the newspaper, said the Centre passes a bigger share of revenue to provinces without cutting its own spending by a matching amount. The divisible pool has been frozen at Rs13.35 trillion, while FY27 tax collection is projected at Rs15.264tr.

Around 80 per cent of consolidated provincial spending goes to recurrent costs, and the largest rise since 2010 has been in administrative expenses instead of education or health. Provinces lean heavily on federal transfers, which make up as much as 78 per cent of their revenues. Agriculture contributes more than 20 per cent of GDP, yet agricultural income tax collections remain negligible.