White Paper 2021-22

Government of the Punjab
Finance Department
White Paper
Budget FY 2021-22
June 14, 2021

PREFACE
White Paper is an articulate interpretation of the Annual Budget that primarily highlights the Revenues and Expenditures of the Province. It
further outlines the strategic direction, policies, and progammes of the Provincial Government. A focused overview of macroeconomic
conditions, in light of the prevalent situation, sets the context of this White Paper.
The Budget preparation for Fiscal Year 2021-22 is based on extensive review and analysis of the Provincial economy and is primarily aimed
to stimulate economic recovery of the province, along with, management of the COVID-19 pandemic. During the highly rigorous process of
budget making, Finance Department continued to implement and ensure principles of Inclusive Budgeting, to promote participatory
governance, financial transparency and increased accountability. Representatives of the civil society, academia, media, non-governmental
organizations, businesses and financial institutions were formally engaged and proposals were received regarding key interventions in socio-
economic sectors particularly Education, Health, Social Protection, Agriculture, Industry and Information Technology. These proposals have
been reflected in the Budget 2021-22. Further, allocations, based on the Provincial Government’s mission of Strengthened Economy, Equitable
Growth, Human and Infrastructure Development etc. have also been prioritized.
Focus has been directed towards enhancing fiscal space by improving Provincial Own Source Revenue, rationalizing expenditure using strict
fiscal discipline, and premeditated development across the Province. Ideas of linking levying of taxation with benefits derived by the taxpayers
have been explored. Several taxes have been rationalized to capture true potential and update the existing system, moreover, documentation
of economy and tax compliance has been incentivized to expand the tax base. Further, austerity measures and hard budget constraints have
been imposed to ensure efficient and productive utilization of scarce resources.
With an economy recovering rapidly after COVID-19 crisis, the out-going Financial Year has been enormously challenging for the entire Finance
Department team. Budget making in such a situation is a gargantuan exercise requiring teamwork followed with consistent motivation, hard
work and due diligence. I would, therefore, like to take this opportunity to appreciate the continuous and untiring efforts put in by the entire
team working on the Budget. As for the compilation of the White Paper, I would like to acknowledge the efforts of the entire team; in particular
Mujahid Sherdil (SSF-Budget & Resources), Nauman Yousef (AFS-Budget), Bilawal Abro (DS-Resource-1), Saifullah Dogar (Consultant),
Farhan Abbas and Hammad Uddin Khan (IDAP).The Finance Team relied heavily on the wise counsel of Makhdoom Hashim Jawan Bakht,
Finance Minister, throughout the effort.
IFTIKHAR ALI SAHOO

June 14, 2021 Finance Secretary
Page I
TABLE OF CONTENTS
01 Page 01 02 Page 11
Macroeconomic Review and Estimates of Receipts

Outlook
03 Page 27 04 Page 35
Estimates of Expenditures Annual Development Program
05 Page 49 06 Page 53
Public Account Debt and Contingent

Liabilities
07 Page 65 08 Page 73
Post COVID-19 Fiscal Public Financial Management

Challenges and Measures for (PFM) Reforms
Economic Recovery
Page IV
LIST OF ABBREVIATIONS
ABS Annual Budget Statement LFY Last Financial Year

ADB Asian Development Bank LG & CD Local Government & Community Development
ADP Annual Development Programme LIBOR London Inter-Bank Offered Rate
AIT Agriculture Income Tax LNFBE Literacy & Non-Formal Basic Education
APDP Automated Pension Disbursement Project Department
BE Budget Estimate LRMIS Land Record Management Information System
BF Benevolent Fund MDGs Millennium Development Goals
BOR Board of Revenue MICS Multiple Indicator Cluster Survey
CDC Central Depository Company MIS Management Information System
CDLs Cash Development Loans MPDD Management & Professional Development
CFU Corporate Finance Unit Department
CFY Current Financial Year MTDF Medium Term Development Framework
CLC Community Learning Centres MTFF Medium Term Fiscal Framework
CMSES Chief Minister’s Self Employment Scheme NFBE Non Formal Basic Education
CTD Counter Terrorism Department NFC National Finance Commission
CVT Capital Value Tax NFIS National Financial Inclusion Strategy
C&W Communication & Works NHP Net Hydel Profit
DFID Department for International Development NLTA Non Lending Technical Assistance
DMU Debt Management Unit NSS National Savings Scheme
E&T Excise & Taxation OSR Own Source Revenue
FBR Federal Board of Revenue PCF Provincial Consolidated Fund
EPS Estimated Provincial Surplus P&D Planning & Development
FD Finance Department PCGIP Punjab Cities Governance Improvement Project
FIEDMIC Faisalabad Industrial Estates Development & PEEF Punjab Education Endowment Fund
Management Company PEF Punjab Education Foundation
FRE Framework for Rolling Expenditure PEOP Punjab Economy Opportunities Program
FY Financial Year PESP Punjab Education Sector Project
GDP Gross Domestic Product PFC Provincial Finance Commission
GDS Gas Development Surcharge PFM Public Financial Management
GI Group Insurance PGPIF Punjab General Provident Investment Fund
GIS Geographic Information System PHNP Provincial Health & Nutrition Program
GP Fund General Provident Fund PHSRP Punjab Health Sector Reforms Program
GoPb Government of Punjab HRITF Health Reforms Innovation Trust Fund
GPF General Provident Fund PIAIPP Punjab Irrigated Agriculture Improvement
GRP Gross Regional Product Program Project
GRR General Revenue Receipt PIBs Pakistan Investment Bonds
GSDP Gross Subnational Domestic Product PIEDMIC Punjab Industrial Estates Development &
GST General Sales Tax Management Company
HUD & PHED Housing Urban Development & Public Health PIFRA Project to Improve Financial Reporting & Auditing
Engineering Department PKLI Punjab Kidney Liver Institute
IBRD International Bank for Reconstruction and PLA Personal Ledger Account
Development PPB Punjab Privatization Board
IC&YA Information Culture & Youth Affairs PPF Punjab Pension Fund
IDA International Development Agency PPIC3 Punjab Police Integrated Command, Control &
J&C Program Job & Competitiveness Program Communication Centre
JICA Japan International Cooperation Agency PPMRP Punjab Public Management Reform Program
KIBOR Karachi Inter Bank Offered Rate PPP Public Private Partnership
L&DD Livestock and Dairy Development PRA Punjab Revenue Authority
Page V
PRAL Pakistan Revenue Automation (Pvt.) Limited SNG Sub-National Governance Programme
PSDP Public Sector Development Programs SPPAP Southern Punjab Poverty Alleviation Project
PSDP Punjab Skills Development Project S&GAD Services & General Administration Department
PSIC Punjab Small Industries Corporation TEVTA Technical Education and Vocational Training
PSPA Punjab Social Protection Authority Authority
PSPC Punjab Saaf Pani Company TFCs Term Finance Certificates
RIMS Restaurant Invoice Monitoring System TMAs Town Municipal Administrators
RE Revised Estimate TRU Tax Reform Unit
RLNG Regasified Liquefied Natural Gas UIPT Urban Immovable Property Tax
SBP State Bank of Pakistan UNICEF United Nations Children Fund
SBS Sector Budget Support WDD Women Development Department
SED School Education Department
SDG Sustainable Development Goals
Page VI
FINANCIAL SNAPSHOT OF THE PROVINCE FY 2021-22 Receipts / Inputs
1,683.7 bn 132.0 bn 25.0 bn

Federal Divisible Pool Non-Tax Revenue Innovative Financing
65.2 bn 272.6 bn 119.4 bn 420.3 bn

Provincial Tax Revenue Capital Receipts (A/C-I)
Foreign Project Capital Receipts (A/C-II)
Assistance
110 million
Population
36%
Urban vs. Rural
64% Population PKR 123.4 bn
Economic Affairs
PKR 835.1 bn
General Public Service
PKR 50 bn + PKR 1,427.9 bn

Tax Relief Package Current Expenditure
PKR 189.7 bn
Public Order & Safety Affairs
PKR 560.0 bn
Development Expenditure
PKR 77.2 bn PKR 540.1 bn

Education Affairs Capital Expenditure
PKR 175.7 bn
Health
Programs / Outputs
Page VIII
EXECUTIVE SUMMARY
Pakistan’s economy is on the path to a strong recovery, despite the protracted COVID-19 pandemic. GDP growth for FY2021
is estimated at 3.94% with contribution from all three major sectors agriculture, industrial and services. The Government’s
prudent yet evidence based policies prioritizing macroeconomic stability, containment of COVID-19 spread and protecting the
most vulnerable segments of society, have enabled Pakistan’s v-shaped economic recovery and kept the impact of COVID-
19 in check. Timings and imposition of smart lockdowns, targeted incentives for construction sector, augmented with monetary
stimulus helped lifting up the growth in industrial and services sectors. The introduction of business responsive policies and
Pakistan’s advance in the “doing business” ranking has reinstated investor confidence leading to a significant increase in
investment.
Punjab, having a central reinforced role in the performance and development of the national economy, played a critical role in
the recovery of the national economy through contribution in all major sectors. Government of the Punjab calibrated its policies
and strategies with the COVID-19 pandemic and developed a comprehensive response to COVID-19 through the Responsive
Investment in Social Protection and Economic Stimulus (RISE) Punjab. Well-designed, targeted interventions helped in
stimulating Provincial economic recovery and restricting the COVID-19 impact to the minimum, in spite of huge resource
constraints. Extension of massive tax relief measures, worth more than PKR50 billion, aimed at businesses and sectors most
hit by COVID-19, provided support to recover economic losses for survival in critical times. Even in such tough conditions, tax
base widened, tax compliance increased and economic transaction improved due to targeted reduction of rates and tax
incentives for several service sectors. It is important to mention that Government of the Punjab has delicately balanced
provision of relief, resource generation, and disbursement for COVID-19 containment, social protection and essential
development. Substantial public investment was made in key social sectors like health, education.
Budget 2021-22 has been designed with the ambition to sustain and accelerate the current economic growth rate. The total
General Revenue Receipts of Government of the Punjab have been pitched at PKR 2,088.3 billion; including Federal Divisible
Pool transfers of PKR 1,683.7 billion and Provincial Revenues of PKR 404.6 billion. The Current Expenditure of the
Government has been pitched at PKR 1427.9 billion. During the CFY 2020-21, Government of the Punjab enforced a strict
monitoring regime on expenditure with prudent spending. Expenditure on Health sector and allied services is expected to
grow. Federal Government’s priority program of provision of low cost housing to public as well as a boost to construction
sector in general has also been kept in attention.
Development priorities and government spending for Annual Development Program, 2020-21 were guided by Punjab Growth
Strategy 2023 and Punjab Spatial Strategy 2047. Priority areas were Livelihood security through social protection schemes;
investments to fill health infrastructure gaps, ensuring food security; education and human capital development along with
support to the MSME sector. Government of the Punjab aims to accelerate the growth momentum gained during the CFY,
therefore, Annual Development Programme 2021-22 has been developed with the aim of increasing economic growth, job
creation and productivity. This explains the increase in size of the Annual Development Program to PKR 560 billion. The
guiding principles adopted for ADP 2021-22 include economic growth led investment, inclusive & balanced regional
development, transformation of agriculture sector, human development through skills development, enabling environment for
private sector resource mobilization, and targeted investments in priority projects through Economic Revival
Programme. Focus on regional equalization for the development of South Punjab will also support the development of the
backward areas of the Province. Some of the critical priorities for South Punjab include education and health, Infrastructure
linkages/connectivity, Agriculture, Industrial and Urban development.
Punjab has amplified its commitment in expanding economic cooperation with China since inception of CPEC. After catering
infrastructure, energy and connectivity, focus has now shifted towards industrial, agricultural and socio-economic cooperation.
To further strengthen CPEC development in the province, Government of the Punjab is developing CPEC Strategy for Punjab,
which is expected to be launched in the upcoming fiscal year, which will outline the roadmap to capture the maximum potential
of this partnership with China and will mainly focus on development of strategies and plans in key cooperation areas of CPEC
Long Term Plan 2030.
Page IX
Further, the Government is determined to capitalize full potential of Public Private Partnerships (PPPs) in Punjab. Enactment
of PPP Act 2019 facilitates the private sector investment along with mobilization of private finance and improved infrastructure
delivery. At the development front, for FY 2021-22, a range of PPP project proposals, are under revision, pertaining to CETPs,
Special Economic Zones, roads and transportation and real estate development.
Government of the Punjab has also made significant progress in calibrating its policies and frameworks with the Sustainable
Development Goals (SDGs) while pledging adequate resources for the implementation of the 2030 Agenda for Sustainable
Development. The targets include strengthening of data availability at the provincial/district level for supervision and decision
making, formulation of sector-specific SDGs localization plans, vulnerability assessment of South Punjab region and
development of South Punjab Regional Development Forum.
Punjab has been further striving for a strong PFM system, through reforms, to ensure most efficient use of resources. Few of
the significant initiatives undertaken in the previous years include the creation of Punjab Revenue Authority, the establishment
of Punjab Pension Fund, Debt Management Unit, Corporate Finance Unit, and the introduction of Medium-Term Budget
Framework, Citizens budget and e-payments of taxes. Consequently, a marked improvement in the own-source revenue,
fiscal responsibility, and quality of technical input for strategic and operational levels decision making, has been observed.
Further, Finance Department, in collaboration with State Bank of Pakistan and Accountant General Punjab, is also working
on the Treasury Single Account framework. It is expected to help in attaining improvement in the liquidity position of the
government, allowing the government to optimize resource utilization. It shall further enable the government to consolidate
and manage cash position, lowering debt servicing costs and reducing the fiscal deficit at the national level.
To enhance fiscal space through Own Source Revenue, the Government is undertaking several tax related reforms involving
taxes such as Electricity Duty, Urban Immovable Property Tax, Motor Vehicle Tax etc. Efforts have also been made to include
new taxes under purview of Epay Punjab. One such important initiative is E-Abyana which is expected to facilitate farmers to
pay Abyana through electronic payments, and improve quality of assessments and transparency in billing system leading to
enhanced revenue generation.
Page X
Following tables provide the key fiscal numbers for Budget 2020-21:
Budget at a Glance
(PKR Billion)
BE RE BE
CLASSIFICATION
2020-21 2020-21 2021-22
A - CURRENT BUDGET
General Revenue Receipts 1,750.0 1712.7 2088.3
Current Revenue Expenditure 1,318.3 1314.9 1,427.9
A- Net Revenue Account – Surplus (+) / Deficit (-) 431.7 397.8 660.4
B- CURRENT CAPITAL BUDGET
Current Capital Receipts (A/C-I) 111.6 73.5 79.2
Current Capital Expenditure (A/C-I) 128.4 87.2 119.8
B- Net Capital Account - Surplus (+) / Deficit (-) (16.8) (13.7) (40.6)
C- Surplus for Development (A+B) 414.9 384.1 619.8
D - ADP Resources
Foreign Assistance for Projects 47.1 30.9 65.2
E- TOTAL RESOURCES (C+D) 462.0 415.0 685.0
F - Annual Development Program 337.0 375.2 560.0
Estimated Provincial Surplus /Deficit (E-F) 125.0 39.8 125
Page XI
(PKR Billion)
BE BE
DESCRIPTION DESCRIPTION
2021-22 2021-22
A - GENERAL REVENUE RECEIPTS A - CURRENT REVENUE EXPENDITURE
General Revenue Receipts 2088.3 General Revenue Expenditure 1,427.9
Divisible Pool Transfers 1,683.7 01 - General Public Service 835.1
Provincial Tax Revenue 272.6 02 - Public Order and Safety Affairs 189.7
Provincial Non-Tax Revenue 132.0 03 - Economic Affairs 123.4
Straight Transfers (Excl. excise duty on NG) 7.4 04 - Environment Protection 0.5
Net Hydel Profit 12.5 05 - Housing and Community Amenities 11.9
Net Hydel Profit Arrears 12.5 06 - Health 175.7
Federal Grants 2.4 07 - Recreational, Culture and Religion 4.3
Provincial Own Non-Tax Revenue 97.2 08 - Education Affairs and Services 77.2
09 - Social Protection 10.1
B - CURRENT CAPITAL RECEIPTS B - CURRENT CAPITAL EXPENDITURE
CAPITAL RECEIPTS 499.5 CAPITAL EXPENDITURE 540.1
Recoveries of Loans and Advances (A/C-I) 3.1 Public Debt -
Debt (A/C-I) 51.1 Repayment of Principal 54.2
Innovative Financing including PPP mode 25.0 Investments 40.0
Recoveries of Investment-State Trading (A/C-II) 217.4 Loans and Advances (Principal) 25.6
Cash Credit Accommodation (A/C-II) 202.9 State Trading in Medical Stores 0.0
State Trading (Wheat) (A/C -II) 273.1
Repayment of Commercial Bank Loans (A/C - II) 147.2
C- DEVELOPMENT RECEIPTS C- DEVELOPMENT EXPENDITURE
Foreign Project Assistance 65.2 Annual Development Program 560.0
Core ADP 515.6
Other Development Initiatives 44.4
Total Receipts A/C-I 2232.7 Total Expenditure A/C-I 2107.7
Total Receipts A/C-II 420.3 Total Expenditure A/C-II 420.3
Provincial Surplus 125.0
Total Provincial Consolidated Fund 2,653.0 Total Provincial Consolidated Fund 2,653.0
Page XII
Chapter I – Macroeconomic Review and Outlook
Macroeconomic Review and Outlook
National Macroeconomic Snapshot
A
fter showing contraction of 0.47% in FY2020 as the onset of
COVID-19 pandemic aggravated the effects of policy options
under the IMF’s stabilization program, Pakistan’s economy
GDP Growth
has made strong recovery in FY2021 despite facing the
secondary and tertiary waves of COVID-19. GDP growth for FY2021 is
estimated at 3.94%, significantly higher than the original target of 2.1%
and IMF’s forecast of 1.5%. The economic expansion has been broad-
based with all three major sectors viz., agriculture, industrial and
services, contributing to the GDP growth. Prudent economic policies
have enabled strong recovery without compromising macroeconomic FY 2020 FY 2021
-0.47%
stability and protected the most vulnerable segments of the society Pakistan’s GPD estimated
while a combination of non-pharmaceutical interventions and
vaccination drive have helped Pakistan keep the health crisis of COVID- 3.94%
19 well under control.
Timely and data-driven policies of the government have expedited

economic recovery. There was a notable pickup in economic activity as
restrictions eased, large-scale manufacturing gained traction, demand indicators started showing encouraging growth, and all major crops,
except cotton, exceeded their respective production targets. The services sector also showed buoyancy, fiscal and external sector exhibited
marked improvement as primary budget and current account balances have turned into surpluses. Key macroeconomic indicators show that
Pakistan is on the path of economic recovery and sustainable growth, as can be seen in the table below.
FY 2020 FY 2021
Revised Target Actual Debt/GDP Consolidated
79.7% Fiscal Balance
Real GDP Growth (%) -0.47 2.10 3.94
(%GDP)
Inflation (%) 10.7 6.5 8.8 Jul-May'21 -3.5%
Current
Consolidated Fiscal Primary
-8.1 -7.0 -3.5 Jul-Mar'21 A/C
Balance (%GDP) Fiscal
Primary Fiscal Balance
-1.8 -0.5 1.0 Jul-Mar'21 Balance
Balance (%GDP) (%GDP)
(%GDP)
Current A/C Balance 0.2%
-1.7 -1.6 0.2 Jul-Apr'21 1.0%
(%GDP)
Debt/GDP 87.6 87.7 79.7 Mar'21
Real GDP Inflation

Growth 8.8%
Source: MOF, SBP, IMF.
3.94%
Page 1
Economic growth
Pakistan’s real GDP growth fell to -0.47% in FY2020, which was the second year of economic contraction in the country’s history, after FY1952.
While contractionary macroeconomic policies were already in play as part
of IMF’s stabilization program, the arrival of COVID-19 pandemic towards
Agriculture 2.8%
the end of 3QFY2020 exacerbated the situation with lockdowns leading to

Services 2.6%
Industry 0.1% sudden economic disruption and consequent surge in unemployment.
The Annual Plan for FY2021 envisaged GDP growth of 2.1% based on
Government’s contributions from agriculture (2.8%), industry (0.1%) and services (2.6%).
special However, prudent policies and timely interventions of the government
incentives made economic contraction short and shallow with high frequency data
started showing signs of recovery early into FY2021. While IMF had
projected Pakistan’s GDP growth rate at 1.5% for the fiscal year FY2021,
provisional estimates by the National Accounts Committee placed the
GDP growth for the year at 3.94%. Disaggregated data suggests that the
growth has been well supported by all major sectors including agriculture,
industry and services. Except for cotton, all major crops showed
significant increases with wheat production touching all-time high. The
government’s special incentives for construction sector complemented by
SBP’s monetary stimulus helped lift the growth in industrial and services
sectors albeit intermittent lockdowns continuing through the year.
FY2019 FY2020 FY2021

Final Revised Provisional Large Scale
GDP (Factor Cost) 2.08 -0.47 3.94 Manufacturing
Agriculture 0.56 3.31 2.77 9.29%

Finance & Insurance
- Major Crops -7.69 5.24 4.65
7.84%
- Livestock 3.82 2.10 3.06 Construction
Industrial -1.56 -3.77 3.57 8.34%

Wholesale & Retail
- Large Scale Manufacturing -2.60 -10.12 9.29
Trade 8.37%
- Construction -15.50 5.46 8.34 Major Crops
Services 3.79 -0.55 4.43 4.65%
- Wholesale & Retail Trade 1.08 -3.94 8.37
- Finance & Insurance 4.51 1.13 7.84
- Housing Services 4.00 4.01 4.01
Inflation and the cost of living

Headline inflation remained elevated through FY2021 mainly due to domestic supply chain disruptions caused by the pandemic, hefty
adjustment in electricity tariffs and sharp surge in international commodity prices, although the government absorbed a lot of the increase in
international oil prices by reducing the petroleum levy.
National CPI averaged 8.83% during July-May’21 compared to 10.94% in the same period of the preceding fiscal year. Core inflation on the
other hand showed some softening during FY2021. Urban core inflation averaged 5.9% in Jul-May’21 versus 7.6% in the same period for the
preceding year. Likewise, rural core inflation came in at 7.6% in Jul-May’21 as against 8.7% in the same period of the preceding year.
Page 2
Balance of Payments
Export Proceeds Current Account
The Annual Plan for FY2021 in the evolving situation of the pandemic
Surplus
envisaged export growth of 1.5% and import growth of 1.1% while current 2019-20 $0.8 Billion
account deficit at 1.6% of GDP with the underlying assumptions of
modest global recovery and subdued domestic demand. However, the
external sector performance recovered quickly as the global demand
bounced back. Pakistan’s exports increased by 6.5% in Jul-Apr’21 from
the level in Jul-Apr’20. On the other hand, instead of decreasing,
Trade Deficit
$4.7 Billion
2020-21
Pakistan’s imports also increased by 13.5% over the same period
leading to a higher trade deficit. However, the current account posted a
Pakistan Exports increased by
surplus of $0.8 billion in July-April’21, as compared to a deficit of $4.7 6.5%
billion in the corresponding period last year. This improvement is
contributed by all components except the deterioration in trade imbalance. Increase in remittances contributed 87% or $4.5 billion of this
improvement.
2019-20 2020-21
Percent Change
(Jul-Apr) (Jul-Apr)
External Sector
Remittances ($ billion) 18.8 24.2  29.0
Exports FOB ($ billion) 19.7 21.0  6.5
Imports FOB ($billion) 37.3 42.3  13.5
Current Account Balance ($ billion) -4.7 0.8 
Current Account Balance
-2.1 0.3 
(Percent of GDP)
FDI ($ million) 2301.3 1553.4  32.5
Portfolio Investment –Public ($ million) -234.5 2463.1 
Total Foreign Investment ($ million)
1884.1 3736.4  98.3
(FDI & Portfolio Investment)
18.598 23.016
(SBP: 12.129) (SBP: 15.846)
Forex Reserves ($ billion)
(Banks: 6.469) (Banks: 7.170)
(on 20th May, 2020 (on 20th May, 2020
160.77 153.46
Exchange rate (PKR/US$)
(on 20th May 2020 (on 20th May 2020
Foreign Remittances, FDIs and Business Confidence

While the World Bank had projected a fall in remittances, the government and
Top 4 Workers
SBP policies incentivized inflow of remittances through formal banking channels.
Remittance
During Jul-Apr’21, remittances rose to $24.2 billion compared to $18.8 billion in
the same period last year, which indicates a growth of 29%. As can be seen in contributors
the figure below, the major inflows of remittance were from Saudi Arabia, U.A.E, 2.2 1
1.4
USA and U.K. 1.9 6.4 2
5.32 3.3
FY 19-20 FY 20-21 3
4
4.68 5.08
Saudi Arabia UAE
UK USA
Remittances rose to $24.2 billion in FY 20-21
as compared to $18.8 billion in FY 19-20
Page 3
Foreign Remittances Received
Country FY 2021 FY 2020
Saudi Arabia 6.4 5.32
UAE 5.08 4.68
UK 3.3 1.9
USA 2.2 1.4
Total 24.2 18.8
As remittances rose over the last fiscal year so did Pakistan’s

national savings, helping finance investment needs. Pakistan’s Total Foreign
National savings Investment (FDI
national savings improved to 15% of GDP in FY2021 from 13.6%
improved and Portfolio
in FY2020. In the last fiscal year, Pakistan’s exchange rate had
13.6% in FY2020 Investment)
been depreciating, however by Aug’20 the exchange rate increased by 98.3%
15% in FY2021
stabilized and subsequently started to appreciate. Strong external currently stands at
finances helped Pakistan’s exchange rate appreciate by 9.5% $3,736 million.
between Aug’20 and Apr’21.
While FY2021 has witnessed uncertainties due to the pandemic,

the introduction of pro-business policies and Pakistan’s
improvement in the “doing business” ranking has aided in External finances helped
restoring investor confidence. However, this has not yet translated Pakistan’s exchange rate
into substantial pick-up in FDI inflows. In Jul-Apr’21, FDI was appreciate by 9.5% between
recorded at $1,553.4 million compared to $2,301.3 million last Aug’20 & Apr’21.
year, indicating a 32.5% decrease. However, Total Foreign
Investment (FDI and Portfolio Investment) increased by 98.3% over the last year and currently stands at $3,736 million.
Pakistan’s Economic Recovery from COVID-19 and challenges faced

With the onset of the COVID-19 pandemic, countries across the globe have been struggling to deal with unprecedented challenges to their
health systems, social safety nets and economic structures. Pakistan like most other developing countries suffered more economically from
policies of frequent lockdowns, both complete and smart, to contain the spread of COVID-19.
As these inevitable lockdowns were imposed across the country, many small and medium scale businesses shut down, workers especially
daily wage and informal laborers and those in the informal economy found themselves unemployed and supply chains faced significant
disruptions. Since a majority of Pakistan’s workforce operates in the informal sector and employs a large proportion of the population as casual
day laborers, the country overall faced adverse socio-economic impacts for this vulnerable population. Those already on the margins of poverty
were pushed further into it, as pre-existing inequalities further deepened and they faced issues such as food insecurity, lack of income/savings,
limited social safety protection, and lack of access to healthcare.
According to a survey on the Socio-economic Impacts of COVID-19 conducted by the Pakistan Bureau of Statistics in 2020, over 49% of
Pakistan's working population suffered a loss of employment and/or a decrease in income during the pandemic.1 The World Bank also affirmed
these findings. 2
1
https://www.pbs.gov.pk/sites/default/files//other/covid/Final_Report_for_Covid_Survey_0.pdf
2
https://openknowledge.worldbank.org/bitstream/handle/10986/35274/9781464817007.pdf
Page 4
KPK
Pakistan
Affected 55%
Job Loss 29% Affected 49%
Income Loss 26% Job Loss 37%
Income Loss 12%
Punjab
Affected 48%
Job Loss 37%
Balochistan
Income Loss 10%
Affected 46% Sindh
Job Loss 39% Affected 51%
Income Loss 8% Job Loss 39% Figure 4: Percentage of population across Pakistan affected by COVID-19,
Income Loss 11% “Special Survey for Evaluating Socio-Economic Impact of COVID-19”,
Pakistan Bureau of Statistics
Almost half of the working population, mainly daily wage workers and casual workers in the informal sector, were affected due to the closure
of businesses and lockdowns. The survey also found that job losses due to the initial wave of the pandemic were primarily in the Manufacturing,
Construction, Transport and Retail industries. The loss of employment resulted in an increase in the incidence of poverty from 4.4% to 5.4%,
with upwards of two million people falling below the poverty line. An additional 40% of households suffered from moderate to severe food
insecurity.3
All these factors which were a consequence of the pandemic contributed to the aforementioned key macroeconomic indicators and Pakistan’s
negative economic growth rate in FY2020 (-0.47%). However, as said earlier, Pakistan’s economy began recovering quicker than anticipated
due to data-driven, timely and COVID-responsive policies by the government.
At the institutional and policy level, the Punjab government aligned all provincial policies, strategies and documents with the reality of the
COVID-19 pandemic. By ensuring that key provincial documents are responsive to COVID-19 and its socio-economic impacts, the government
ensured that every department effectively responds to the most critical needs. The Punjab government developed a comprehensive and holistic
response to COVID-19 through the Responsive Investment in Social Protection and Economic Stimulus (RISE) Punjab. This document
integrates seven critical pillars which provide Punjab with a realistic framework to overcome the current health, economic and social protection
challenges.
To help different industries and sectors recover from the adverse economic impacts of lockdowns and COVID restrictions, the State Bank of
Pakistan and the Government of Pakistan provided numerous economic stimulus packages, favorable loan policies, lower interest rates for
borrowing, increasing credit limits to SMEs, tax relief on food/health items, funds disbursement to Utility Store Corporations and substantial
support to all sectors through various policies. Further, relief of PKR 200 billion has been provided to Exporters, Agriculture and SME sectors,
while the SBP has also cut the policy rate to 7.5% and has given relaxation of one year in repayment of principle under various refinance
schemes. Stabilization and accommodative fiscal and monetary policies helped in mitigating the economic fallout of the COVID shock and laid
the foundation of a V-shaped recovery.
One of the key reasons for Pakistan’s economic recovery from COVID-19 has been its comprehensive and timely social protection response.
The Federal Government announced a PKR 1.2 trillion relief and stimulus package, the largest ever stimulus package, focusing on healthcare,
social protection and economic stability and stimulus. In order to provide comprehensive social protection to the most vulnerable segments of
the population, the Ehsaas Emergency Cash Program worth PKR 150 billion was launched, out of which PKR 81 billion has been disbursed to
over 6.6 million families and PKR 200 billion has been allocated to daily wage workers. According to a World Bank report on ‘global social
protection responses to Covid-19’, Pakistan ranks fourth globally in terms of the number of people covered and third globally in terms of the
percentage of population covered amongst those that covered over 100 million people. The Government has also been provided with external
financing worth USD 6.74 billion through loans and grants.
3 https://openknowledge.worldbank.org/bitstream/handle/10986/35274/9781464817007.pdf
Page 5
World Bank Report on Covid 19

th
Pakistan ranked 4 Globally Social
Protection response to Covid 19
Cash assistance
Ehsaas Emergency Cash Program
PKR150billionfor 6.6MillionFamilies
External financing
The Government been provided with
external financing worth USD6.74 billion
Punjab’s Contribution to Economic Recovery

The share of the key sectors in Pakistan’s economy are agriculture 19.19%, industry 19.12% and services 61.68% (at constant basic prices,
PBS 2020-21) and these sectors contribute to Punjab’s economy 20%, 18%, and 62% respectively (PGS 2023). The sectoral share in the
economy in Punjab, at the aggregate level, mirrors the sectoral contribution at the national level.
Punjab has a dominant role in the performance of the national economy. Although Punjab province, as a whole, contributes approximately
54% to the national income, 61% of the total employment in Pakistan (LFS, 2018), and houses 53% of the total population (Population Census,
2017). As per estimates, over a long run, Punjab’s economy has generally performed better than the national economy.
Due to the significance of the province, the impact of COVID-19 on Punjab’s economy is of critical importance to Pakistan. Consistent increase
in COVID-19 cases has led Government of Punjab to impose several smart lockdowns across the province to curtail the spread of COVID-19.
Frequent lockdowns have disrupted food supply chains of high- value agricultural products (vegetables, fruits, and milk) and farm inputs, but
have had relatively less impact on the wheat harvest. Punjab contributes about 57% to the value of national agricultural production and
produces more than 80% of the country’s wheat and cotton, almost two-thirds of its sugarcane, and about half of its maize; and its horticultural
output represents 67% of national production (Government of the Punjab 2018) making it inevitable for Government of the Punjab to take the
necessary steps to revive the economy.
The decline in growth was more pronounced in the industrial and services sectors as opposed to the agriculture sector. The decline in economic
activity and labor supply as well as the constraints on the movement of people impacted both manufacturing and the services sector resulting
in the significant increase in poverty. Informal sector workers were the most vulnerable and many of them have lost their jobs due to the
prevailing lockdown situation across the country.
The overall industrial production sector of Punjab reported a 6% increase in July-December 20-21 compared to the same period in the last
financial year.4
4 http://bos.gop.pk/system/files/C.I.S%20Jan%2021.pdf
Page 6
% Increase in Production between July-December FY2019-20 and 2020-21 Punjab
Refrigerators / Freezers 57.20%

Air Conditioners 165.20%
Diesel Engines 8.40%
Automobiles 43.20%
Tractors 42.40%
Cement 17.90%
Petroleum Products 14.00%
Soap 9.40%
Paints & Varnishes 29.90%
Fertilizers 16.70%
Basic Inorganic Chemicals/Acids 5.40%
Pharmaceuticals 14.30%
Wool Textiles 107.30%
Sugar 82.90%
Wheat Milling 74.50%
0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% 140.00% 160.00% 180.00%
% Decline in Production between July-December FY2019-20 & 2020-21 Punjab
-70.00% -60.00% -50.00% -40.00% -30.00% -20.00% -10.00% 0.00%

-7.90% Starch
-27.50% Cigarettes
-7.30% Cloth/Blended Cloth
-18.00% Jute Textiles
-39.40% Upper Leather
-34.70% Footwear
-56.10% Plywood
-16.20% Tyre & Tubes
-47.10% Glass Sheets
-25.10% Steel Bar Angles
-37.00% Fabricated Metal Products
-64.00% Bicycles
-21.00% Electric Fans
-38.30% Electric Motors
-9.20% Safety Razor Blades
-9.00% Agricultural Implements
The provisional numbers clearly show the upward trend in the second half of the CFY further strengthened taking the national growth in the
LSM and construction sectors to 9.29% and 8.34% respectively.
However, in addition to the introduction of PKR 1.24 trillion stimulus packages focusing on healthcare, social protection and economic stability,
the opening up of the economy has provided the much-needed relief. The unprecedented concession for the construction and SME sectors by
the government has also lessened the social and economic impact of the pandemic.
Page 7
With the opening of the economy, private consumption has increased along with increase in inflow of remittance through formal banking
channels leading to economic revival. Machinery imports and cement sales recorded double-digit growth rates suggesting a recovery in
investment.
According to the World Bank, the industrial and services sector has shown recovery with "Large Scale Manufacturing" and business confidence
indexes exceeding pre-pandemic levels, resulting in most informal workers affected by the pandemic being able to return to work. The World
Bank estimates output growth to recover gradually over the medium-term, averaging 2.2% over FY2021-23, attributing mainly to contributions
from private consumption.
Support Receipt from Federal Government

To face the challenges posed by the pandemic in March 2019 the Federal Government launched the Ehsaas program for social protection and
poverty alleviation.
PKR 200 billion PKR 70 billion for PKR 150 billion for PKR 15 billion to PKR 100 billion for PKR 110 billion
relief to daily relief in Fuel cash transfers to support health accelerated tax relief to people in
wage workers prices low-income and food refunds to export electricity bill
families supplies industry payments
PKR 100 billion for PKR 100 billion for PKR 280 billion for PKR 25 billion for PKR 50 billion for A relief of PKR
financial support Emergency accelerated transfer to financial support 200 billion has
to support the Energy provision procurement of (NDMA) to to Utility Stores been provided
Agriculture sector Wheat purchase . to Exporters
and SMEs necessary
equipment to
deal with
pandemic.
On 25th March 2021, the World Bank approved $600 million to the Government of Pakistan to expand the Ehsaas program. 5 These funds will
support the government to gradually expand its flagship Ehsaas program, aiming to provide financial assistance to the underprivileged families
across the country
Another major initiative of Punjab Government launched by the PM is the universal health insurance through the Sehat Insaf Card, a milestone
program towards social welfare reforms; ensuring that the identified under-privileged citizens across the country get access to their entitled
medical health care in a swift and dignified manner without any financial obligations. Almost 30 million families will benefit from this program.
The Federal Government has also been given external financing to overcome the crisis of COVID-19 consisting of loans and grants from the
World Bank, IMF, Asian Development Bank, Islamic Development Bank, and countries such as China and France. The funding will be used
for emergency medical supplies, relief funds, National Disaster Risk Management Fund, Development Policy Credit, reduction in interest
payment and budgetary support. Additionally, on 24th March 2021, IMF announced an immediate purchase equivalent to about US$500 million
for Pakistan budget support under the Extended Fund Facility.
5 World Bank (2021b). World Bank Supports Expansion of the Ehsaas Social Protection Program in Pakistan to Increase Household Resilience to Economic
Shocks.
Page 8
External Financing of USD 5,911 Million was made to Punjab through loans and grants. 6 As of 30th December 2020, the total outstanding debt
for Punjab is PKR 950.4 billion, the details of which are provided below.
China IDA
212,828 315,397
22%. 33%
IBRDA ADB
121,873 249,362
13%. 26%
Total Federal
950,462 Government
IDB 5,965
131 1%
0.01%.
France
4182 JICA
0.4% IFAD 29,451
11273 3%.
1%
Future Outlook 2021-22

Having restored macroeconomic stability, economic policy focus is shifting towards growth. The economy is set to enter FY2022 with much
improved business sentiments and significant momentum in economic activity. The impact of pandemic on economic activity is gradually
subsiding with vaccine roll out and economies’ adaptation of new ways of working with social distancing and restrictive protocols. Global growth
outlook for the 2021-22 is optimistic for the global economy. Pakistan’s well calibrated macroeconomic and social protection policies for the
2021-22 amidst COVID-19 has shown that the strategy of balancing between lives and livelihood is the durable and orderly way of delivering
sustainable economic growth in the coming years. In FY2022, the economy is expected to consolidate on the growth momentum and a
projected to deliver a healthy growth of 4.8%
Target for FY 2022

FY2020 FY2021 FY2022
GDP 4.80 % Revised Provisional Target
GDP -0.47 3.94 4.80
Industrial 6.50 % Agriculture 3.31 2.77 3.50
Industrial -3.77 3.57 6.50
Services -0.55 4.43 4.70
Agriculture 3.50 %
Source: PBS, Planning Commission
Services 4.70 % Agriculture sector performance during FY2021 was impressive with
crops sector showing exceptional performance baring cotton crop.
There are bright prospects that the cotton crop will rebound in the coming year and remaining important crops will also build on the productivity
gains achieved during FY2022.
6
World Bank (2021b). World Bank Supports Expansion of the Ehsaas Social Protection Program in Pakistan to Increase Household Resilience to Economic
Shocks.
Page 9
Industrial sector has come into positive growth zone in FY2021, after two successive years of contraction. This broad-base revival of large-
scale industries is expected to continue into FY2022. A combination of strong farm economics, construction sector boom and a likely
acceleration in exports on the back of ongoing textile sector expansion to cater to stronger global demand will help lift the growth in the industrial
sector to 6.5% in FY2020.
The services sector will likely benefit from further easing of pandemic induced restrictions as vaccination drive gains momentum. Moreover,
strong agriculture output and growth in domestic demand would enable wholesale and retail trade continue its growth momentum. The overall
services sector growth is projected at 4.7% in FY2022.
In view of the developing macroeconomic situation, Punjab government seeks to recalibrate tax policy providing tax relief to the most vulnerable
segments of the society while withdrawing some of the general exemptions given in FYs 19 and 20. The government also intends to reduce
tax expenditure as the economy has been impacted by COVID-19. Another important consideration for the government is to increase
development expenditure to provide the much-needed fiscal stimulus to the recovering economy and to improve service delivery. The
government is focusing on human capital development and social sectors. The government’s planning a sizeable investment in the education
and health sectors. One major initiative is the universal health coverage through the Sehat Insaf Card. It is also important for the government
to increase social protection schemes to ensure that the vulnerable are protected against COVID-19. The government can expand its
employment guarantee schemes to enable mass employment generation of semi to low skilled workers. It is important for the government to
provide a stimulus package to the micro small medium enterprise sector. Similarly, public works programmes can be used as effective tools
for employment generation. Efficient government expenditure on construction and public works increases investment in private sector.
Government’s efforts on PFM reforms should also be sustained so that a sound PFM system can be achieved that can help effective utilisation
of resources.
Page 10
Chapter
ChapterII –II Estimates
– EstimatesofofReceipts
Receipts
AA
nnual
nnual Budget
Budget is regarded
is regardedas as
thethe
keykey
manifestation
manifestationof of
thethe
priorities
priorities
of of
a Government.
a Government. ForFor
administrative
administrative
purposes,
purposes, however,
however, thethe
plan
plan
is isreflected
reflectedin interms
termsof ofestimates
estimatesof ofReceipts
ReceiptsandandExpenditure
Expenditureduring
duringa Fiscal
a FiscalYear.
Year.This
ThisChapter
Chapteris isaimed
aimedat atproviding
providinga a
comprehensive
comprehensive analysis
analysis
of of
thethe
Receipts
Receiptsof of
thethe
Provincial
Provincial
Government
Government in FY
in FY
2020-21
2020-21andand
projections
projections
forfor
FYFY2021-22.
2021-22.
Classification
Classification
of of
Receipts
Receipts
byby
thethe
Provincial
Provincial
Government
Government
1 1 General
GeneralRevenue
Revenue
Receipts
Receipts 22 Capital
CapitalReceipts
Receipts
The
The
following
following
diagram
diagram
provides
provides
different
different
sub-categories
sub-categories
of of
thethe
Receipts
Receipts
under
under
thethe
twotwo
main
main
categories
categories
of of
Provincial
Provincial
Receipts:
Receipts:
Provincial
Provincial
Consolidated
Consolidated
Fund
Fund
General
General
Revenue
Revenue
Receipts
Receipts Capital
Capital
Receipts
Receipts
Punjab’s
Punjab’s
Share
Sharein in
Provincial
Provincial
TaxTax Provincial
Provincial
Non-Tax
Non-Tax Current
Current
Capital
Capital Development
Development
Federal Divisible
Federal Divisible
Receipts
Receipts Receipts
Receipts Receipts
Receipts Capital Receipts
Capital Receipts
Pool
Pool
Provincial
ProvincialReceipts
Receiptsmainly
mainly
consist
consist
Federal
Federal Divisible
Divisible
Pool
Pool
transfers,
transfers,OwnOwn Source
Source
Revenue
Revenue (Provincial
(ProvincialTaxTax Receipts
ReceiptsandandNon-Tax
Non-Tax Receipts)
Receipts)
andand
loan
loan
amounts
amounts raised
raised
by by
andand
returned
returned to the
to the
Province.
Province.It isIt pertinent
is pertinent
to mention
to mention
thatthat
thethe
Divisible
DivisiblePool
Pool
transfers
transfers
perper
capita
capita
(Inflation
(Inflation
adjusted)
adjusted)
have
havedecreased
decreased overover
thethe
years,
years,
resulting
resulting in in
shrinking
shrinkingof of
resources
resources forfor
provincial
provincial
governments.
governments. ToToaddress
address this,
this,
Government
Government of of
Punjab
Punjabhashas
been
beenstrategizing
strategizing
to to
enhance
enhancethethe
Provincial
Provincial OwnOwnSource
SourceRevenue
Revenue andanddecrease
decrease
dependence
dependence ononthetheDivisible
Divisible
Pool
Pool
transfers.
transfers.
This
This
is essential
is essential
to to
ensure
ensurefinancial
financial
sustainability
sustainability
andandconsistent
consistent allocation
allocation
of of sufficient
sufficient
resources
resourcesforfor
development
development in the
in the
Province.
Province.Focus
Focus
hashasbeen
beenmainly
mainlyonon
increasing
increasingtaxtax
base
baseby by
improving
improvingtaxtax
compliance
compliance andanddocumentation
documentation of of
thethe
economy,
economy, andand
increasing
increasing overall
overallTaxTaxandand
Non
NonTaxTax
receipts
receiptsof of
thethe
Province.
Province. Further,
Further,thethe
Government
Government is is
alsoalso
engaging
engaging with
with multilateral
multilateraldevelopment
development agencies
agencies to to
raise
raise
financial
financial
loans
loans
forfor
undertaking
undertaking major
major
development
development projects.
projects.
Punjab
Punjab hashas
been
been
leading,
leading,
among
among
federating
federating
units
units
of the
of the
country,
country,in its
in its
efforts
efforts
to best
to best
deal
deal
with
with
thethe
COVID-19
COVID-19 pandemic.
pandemic. Government
Government of Punjab
of Punjab
hashasadopted
adopteda proactive
a proactive approach
approachto to
mitigate
mitigate
thethe
negative
negative
impact
impact ononbusinesses
businesses by by
extending
extendinga Tax
a TaxRelief
Relief
Package
Package worth
worth more
morethan
thanPKR50
PKR50
billion
billion
(discussed
(discussedin detail
in detail
below).
below).
Furthermore,
Furthermore,subject
subject
to the
to the
outcome
outcome of the
of the
latest
latest
COVID-19
COVID-19 wave,
wave,
it isit expected
is expected
thatthat
thethe
provincial
provincialeconomy
economy
willwill
recover
recoverfrom
fromthethe
impact
impact of of
COVID-19
COVID-19
Relief
Relief in in FYFY 2021-22.2021-22.
Relief/
Relief/economic
economic stimulus
stimulusforfor
businesses
businesses Keeping
Keeping in in
view
viewthethe
foregoing,
foregoing, thethe
Ministerial
Ministerial
Committee
Committeeof ofthethe
Social
SocialProtection
Protection
Social
SocialProtection
Protection by by
providing
providing
relief
relief
to to
thethe COVID-19
COVID-19
Cabinet
Cabinet onon
affected
affectedsegments
segments of the
of the
society
society Resource
Resource
Mobilization
Mobilization(RMC) (RMC)
adopted
adopted a a multi- multi-
Revenue
RevenueGeneration Generation dimensional
dimensional Fiscal
Fiscal
Revenue
Revenuegeneration
generationthrough
througheconomic
economicgrowth growthandand StrategyStrategy with
with
a focus
a focus
broadening
broadening
of the
of the
taxtax
base
base
rather
rather
than
than
increasing
increasing
rates
rates
Page
Page
11 11
Chapter II – Estimates of Receipts
on striking a balance between provision of relief, revenue generation and social protection.
Based on multiple rounds of Finance Department’s meetings with major Tax collecting Departments, and rigorous efforts of the RMC, a
comprehensive tax-by-tax analysis of Punjab’s Tax Relief Package and Departmental proposals for the FY2021-22 has been conducted. This
has resulted in generation of additional provincial revenue estimated at Rs. 17.4 billion, for FY-2021-22. Following are the key recommendations
finalized by the RMC:
Punjab’s Tax Relief Package and Departmental Proposals: Key Recommendations
▪ Reduced PSTS to sectors closely associated with Construction sector including Architects, Town Planners, Supply of
Machinery and Rental of Bulldozers
▪ Expansion of Reduced Rate on credit / debit card to mobile wallets & QR scanning to promote documentation of economy
▪ PSTS reduced to 5% for 10 sectors, including Fashion Designers, Dress Designing & Stitching Services, Laundries and Dry
Cleaners, Commission (to the extent of Home Chefs) and Beauty Parlors
▪ Continuation of reduced rate of Stamp Duty from 5% to 1%
▪ Removing differential of property tax rate between commercial self & rented units
▪ Rationalization of the Board of Revenue valuation table
▪ Enhancement in Existing Land Based Rates of Agriculture Income Tax
▪ Enhancement in Water Rates to ensure efficient use of canal water
The table below summarizes the estimates of total Provincial Receipts of the Government:
(PKR Billion)
Receipts BE 2020-21 RE 2020-21 BE 2021-22

a. General Revenue Receipt 1,750.035 1,712.732 2,088.304
Federal Divisible Pool 1,432.968 1,354.168 1,683.696
Provincial Taxes 220.886 228.650 272.566
Provincial Non-Tax 96.181 129.914 132.042
b. Capital Receipts A/C-I 133.724 88.371 119.370
Current Capital Receipts 86.630 57.497 54.148
Development Capital Receipts
47.094 30.874 65.222
(Foreign Projects Assistance)
c. Capital Receipts A/C-II 331.869 482.021 420.339
d. Innovative Financing 25.000 15.989 25.000
Total Provincial Consolidated Fund (a+b+c+d) 2,240.628 2,299.113 2,653.014
General Revenue Receipts

The main components of General Revenue Receipts as per Annual Budget Statement are Federal Divisible Pool, Provincial Tax Receipts
and Provincial Non-Tax Receipts. The table below shows the details of Budget Estimates and Revised Estimates of General Revenue
Receipts for FY 2020-21 in comparison with the anticipated Budget Estimates for FY 2021-22.
Page 12
(PKR Billion)
General Revenue Receipts BE 2020-21 RE 2020-21 BE 2021-22
Federal Divisible Pool Taxes 1432.968 1354.168 1683.696
Tax on Income 587.887 513.756 626.878
Land Customs 184.043 201.503 225.971
Sales Tax 558.763 561.249 729.950
Capital Value Tax 0.887 0.146 0.164
Federal Excise 100.882 77.148 100.313
Excise Duty on Natural Gas 0.507 0.365 0.419
Provincial Tax Revenue 220.886 228.650 272.566
Board of Revenue 56.000 56.200 65.950
Excise, Taxation & Narcotics Control Department 32.364 30.500 42.766
Transport 0.675 0.600 0.700
Finance (Punjab Revenue Authority) 125.000 141.150 155.900
Energy 6.847 0.200 7.250
Provincial Non-Tax Revenue (Including Straight Transfers and Grants) 96.181 129.914 132.042
Income from Property and Enterprise 10.208 18.855 26.848
Receipts from Civil Administration and Other Functions 16.479 14.411 17.978
Miscellaneous Receipts 69.494 96.648 87.216
Total General Revenue Receipts 1,750.035 1,712.732 2,088.304
FEDERAL DIVISIBLE POOL TAXES

The major source of revenue for the Provincial Government is the receipt of Federal Divisible Pool share which constitutes 81% of the
General Revenue Receipts projected for FY 2021-22. Under the 7th NFC Award, the Divisible Pool of Taxes as collected by FBR has been
laid down as under:
Divisible Pool of Taxes as collected by FBR

th
(under the 7 NFC Award)
Taxes on income
Wealth Tax
CVT
Taxes on sales and purchase of goods imported, exported,

produced, manufactured and consumed
Export duties on Cotton
Customs-duties
Federal Excise Duties excluding the excise duty on gas

charged at well heads
Page 13
As per NFC Award, the

distribution of resources
among Provinces is
based on multiple
criteria including Inverse Population
Revenue Poverty
Population Density
Since the Divisible Pool transfers constitute a large proportion of General Revenue Receipts, even a small percentage variation between
Federal Board of Revenue’s Budgeted Estimates and Actual Collection leads to a major re-adjustment in Provincial Receipts. The following
table shows the variance between Budget Estimates and Actual Tax Collection by FBR during the last four years:
(PKR Billion)
2016-2017 2017-18 2018-19 2019-20

Budget Estimates 3,621 4,013 4,435 5,555
Actual Collection 3,361 3,841 3,829 3,998
Excess/Shortfall -260 -172 -606 -1,557
Excess/Shortfall (in Percentage) -7.18% -4.29% -13.66% -28.03%
Punjab’s Estimated Federal Divisible Pool Receipts
PKR 1,432.968 bn +17.5% PKR 1,683.696 bn

B.E. FY 2020-21 B.E. FY 2021-22
The last tranche of the FDP is received around the 28 th of June each Financial Year. The common practice is to conduct the settlement and
reconciliation exercise for the entire FY as well as the last two to three days of June and transfer the balance amounts to the Provinces in the
form of arrears in the first quarter of the next FY.
PROVINCIAL TAX REVENUE

The second component of the General Revenue Receipts is termed as Provincial Tax Revenue. The tax revenue is collected by the following
agencies of the Government:
Page 14
Punjab Revenue Authority
Provincial Tax Revenue Sources Board of Revenue
Sales Tax on Services,

Infrastructure Development Cess Excise, Taxation & Narcotics
Agricultural Income Tax, Stamp Control Department
Duty, Land Revenue etc.
Motor Vehicle Tax, Urban Immovable
Property Tax, Provincial Excise, Energy Department
Professional Tax etc.
Electricity Duty
Transport Department
Route Permit Fee
The details of taxes budgeted for FY 2021-22 is presented below:
(PKR Billion)
Tax Receipts BE 2020-21 RE 2020-21 BE 2021-22
Punjab Revenue Authority 125.000 141.150 155.900
Sales Tax on Services 121.000 136.650 150.900
Punjab Infrastructure Development Cess 4.000 4.500 5.000
Board of Revenue 56.000 56.200 65.950
Agricultural Income Tax 2.500 2.500 5.250
Registration of documents 0.074 0.587 0.700
Land Revenue 20.000 15.986 20.000
Capital Value Tax 0.000 0.100 0.000
Stamp Duty 33.426 37.026 40.000
Excise, Taxation & Narcotics Control Dept. 32.364 30.500 42.766
Urban Immovable Property Tax 14.500 14.408 22.230
Tax on Professions, Trades and Callings 1.200 1.050 1.366
Receipts under Motor Vehicles 13.031 12.500 15.560
Provincial Excise 3.114 2.200 3.194
Tax on Luxury Houses 0.092 0.092 0.060
Other Indirect Taxes 0.427 0.250 0.356
Energy 6.847 0.200 7.250
Electricity Duty 6.847 0.200 7.250
Transport 0.675 0.600 0.700
Motor Vehicles fitness certificate and permit fee 0.675 0.600 0.700
Total Provincial Tax Revenue 220.886 228.650 272.566
Page 15
The above table shows that tax collection by the Punjab Government during FY 2021-22 is estimated at PKR 272.57 billion as compared to BE
2020-21 of PKR 220.89 billion. Major increase in Provincial revenue is expected from Sales Tax on Services and Urban Immoveable Property
Tax. Both taxes have high potential through expansion of tax base and effective enforcement.
Punjab Revenue Authority (PRA)

PRA was assigned a revenue collection target of PKR 125.000 billion for FY 2020-21. The target was based on
the revenue collection trends of the preceding years, the revenue generation potential of the assigned taxes and
tax policy measures taken by the Government. In spite of overall impact of COVID-19 on the service sector and
the reduction of PSTS on 20 plus sectors under the Tax Relief Package, PRA has performed exceptionally well PKR
155.9 bn
in terms of collection, subsequently, the R.E for FY2020-21 has been set at PKR 141.150 billion. This amount
also includes the transfer of PKR 16.6 billion received from the FBR against Cross-Adjustment of input taxes of
PRA.
Services such as Telecommunications, Banking/ Insurance, Contractual Execution etc. were expected to be the
primary revenue spinners for PRA during the financial year and have also generated the highest revenue
25%
increase over
Budget
amongst different sectors as shown below. The following table shows the Revised Estimates of collection from
Estimates of FY
major Services during the year: 2020-21
Sales Tax on Services Collection 2020-21 (Total PKR 141.150 bn)
Contractual execution of Telecommunication Withholding Agents

works Rs 4 Billion Rs. 28 Billion Rs. 25 Billion
Courier services Rs. 5

Billion Transfer from
Banking / Non-Banking/
FBR Rs. 16.6
Insurance Rs. 16 Billion.
PIDC Rs. 4.5 Billion Billion.
Franchise services Rs.

7 Billion
Other Services Rs.
20.15 Billion. Total Revised
Estimate of
Collection
Rs. 141.150
Services in relation to
o transport of goods Manpower recruitment Rs.
Rs. 2.1 Billion. 3.3 Billion
Information Technology Rs. 1.7 Security Agency Rs.

Billion 2.3 Billion.
Construction services
Rs. 2.5 Billion Restaurants, etc
Rs. 3.0 Billion.
PRA has done remarkably well to maintain very high growth in revenue collection over the past years. Based on the revenue trends, PRA has
been assigned a target of PKR 155.9 billion for FY 2021-22 with an increase of 25% over Budget Estimates of FY 2020-21. Further, the
Government has reduced the PSTS for ten sectors from 16 to 5% to incentivize compliance.
Page 16
Board of Revenue (BOR)
BOR’s collection is estimated at PKR 65.95
billion for FY 2021-22. The major tax heads
under BOR’s purview are elaborated for the Board of Revenue
purpose of clarity: Responsibilities
Agricultural Income Tax:

Agricultural Income Tax (AIT) is an important
Direct Tax of Provinces, collected under the Registration Fee Land Revenue Stamp Duty AIT
AIT Act of 1997. It is levied as a fixed amount
per acre of land, or as a percent of income of
owners of agricultural land, whichever is
higher. The rates of Land Based Agricultural
Income Tax under the Punjab Agricultural
Income Tax Act, 1997 were last time revised in 2019. With passage of time the prices of agricultural products have shown further rise, therefore,
the tax rates have been further rationalized and enhanced from FY-2021-22 onwards. The BE for AIT for FY 2021-22 is set at PKR 5.25 billion.
Land Revenue:
Land revenue is a broad category and includes a number of receipts related to land revenue functions, the largest being mutation fee. This
category of Provincial Tax Receipts has a lot of potential and is expected to contribute upto PKR 16 billion to the provincial exchequer during FY
2020-21. Further, the BE for Land Revenue for FY 2021-22 is set at PKR 20 billion which is 25% higher than the RE of FY 2020-21.
PKR 16 bn
Revised Estimate 2020-21
PKR 20 bn
Budget Estimate 2021-22
Stamp Duty:
Government has reformed the system by introducing e-Stamps to facilitate taxpayers, plug leakages in this tax collection and to ensure greater
transparency in the process of transfer of property. This reform has shown a decent growth since implementation of reform initiative.
A priority area for the Federal and Provincial Governments has been the Construction Sector. In order to further boost the Sector, the
Government of Punjab has continued the reduced Stamp Duty rates, for transactions of land in Urban areas to 1% from 5%, for FY 2021-22.
Keeping in view the annual growth trajectory the Budget Estimates of Stamp Duty for FY 2021-22 have been pitched at PKR 40 billion which is
20% higher than the BE of FY 2020-21.
Excise, Taxation & Narcotics Control Department

Excise, Taxation & Narcotics Control Department provides services for collection of eight different levies/ taxes. The Department aims to
promote automation of its functions to optimize service delivery through reduced interface between public and Government officials. The major
tax heads under purview of Excise, Taxation & Narcotics Control Department are as indicated below:
Page 17
Chapter
ChapterII –II Estimates
– EstimatesofofReceipts
Receipts
Motor
MotorVehicle
VehicleTaxes:
Taxes:
Excise,
Excise,
Taxation
Taxation
& Narcotics
& NarcoticsControl
Control Department
Department collects
collects
‘Tax‘Tax
onon
Registration’
Registration’
andand
‘Token
‘Token
Tax’
Tax’
onon motor
motorvehicles.
vehicles.
TheTheBEBE2020-21
2020-21
of of
MVMV
Taxes
Taxes
waswas
PKR
PKR13.031
13.031
billion.
billion.
The The
Revised
Revised Estimate
Estimate
forfor
thisthis
taxtax
hashas
been
been
pitched
pitched
at PKR
at PKR
12.500
12.500billion,
billion,
while
while
thethe
target
target
forfor
thethe
next
next
Financial
Financial
Year
Year
hashas
been
been
estimated
estimated
as as
PKRPKR15.56
15.56
billion.
billion.
Urban
UrbanImmoveable
ImmoveableProperty
PropertyTax
Tax(UIPT):
(UIPT):
TheTheUIPT
UIPTforfor
FYFY 2021-22
2021-22stands
stands
at at
PKRPKR
22.230
22.230
billion which
billion which
is 54%
is 54% higher
higher
than
than
BEBE2020-21.
2020-21. ThisThis
is ais tax
a tax
devolved
devolved to to
Municipal
Municipal
Committees,
Committees,
Municipal
Municipal
Corporations
Corporations andand
Metropolitan
Metropolitan
Corporation
Corporation under
under
Local
Local
Government
Government legislation
legislation
in Punjab.
in Punjab.However,
However,forfor
administrative
administrative
purpose,
purpose,
it isit is
being
being
collected
collectedby by
thethe
Provincial
ProvincialGovernment.
Government.The The proceeds
proceedsof of
thisthis
taxtax
areare
passed
passedononto to
thethe
respective
respective Local
Local
Governments/local
Governments/local agencies
agencies
from
from
where
wherethethe
taxtax
is collected.
is collected.
Administrative
AdministrativeRelief
ReliefProposed
Proposedfor
forFY2021-22
FY2021-22
Reg.
Reg.Fee
Feeand
andToken
TokenTax
Tax UIPT
UIPT
1. 1. Waiver
Waiver of of
penalty
penalty
onon
late
late 1. 1. Waiver
Waiverof of
surcharge
surcharge ononlate
late
payment
payment of of
motor
motor
vehicle
vehicletaxtax payment
payment of of
UIPT
UIPT
inin
1st1st
andand2nd
2nd
inin1st1st
andand2nd
2ndQuarter of of
Quarter FYFY Quarter
Quarterof of
FYFY2021-22
2021-22
2021-22
2021-22 2. 2. Collection
Collectionof of
UIPT
UIPT
inin22
2. 2. 5%5% Rebate
Rebateforfor
payment
payment installments
installments
through
through ePay
ePayPunjab
Punjab 3. 3. 5%5% rebate
rebate forfor payment
payment through
through
ePay
ePayPunjab
Punjab
Professional
ProfessionalTax
Tax
TheTheB.EB.E
forfor
FYFY
2021-22
2021-22 with
with
respect
respect
to to
Professional
Professional
TaxTax
hashas
been
been
pitched
pitched
at at
PKRPKR
1.371.37
billion against
billion against
thethe
Revised
Revised
Estimates
Estimates
forfor
FY2020-21
FY2020-21
to to
thethe
tune
tune
of of
PKRPKR
1.05
1.05
billion.
billion.
Non-Tax
Non-TaxRevenue
Revenue
Categories
Categoriesofof > > Income
Incomefrom
frompublicly
publicly
owned
ownedproperty
property and
andenterprises
enterprises
Provincial
Provincial > > Receipts
Receiptsfrom
from
Civil
Civil
Administration
Administrationandand
other
other
functions
functions
Non-Tax
Non-TaxRevenue
Revenue > > Extraordinary
Extraordinary Receipts
Receipts
> > Miscellaneous
Miscellaneous Receipts
Receipts
from
from
toll,
toll,
fees,
fees,
cess
cess
etc.
etc.
collected
collected
byby
Provincial
Provincial
Departments
Departments
(excluding
(excluding
Federal
Federal
Grants
Grants
and
and
Development
Development
Surcharges
Surcharges
and
and
Royalties)
Royalties)
Revised
Revised
Budget
Budget
Estimates
Estimates
FYFY
2020-21
2020-21
& Projected
& Projected
Budget
Budget
Estimates
Estimates
FYFY
2021-22
2021-22
are:
are:
(PKR
(PKR
Billion)
Billion)
Non-Tax
Non-Tax Revenue
Revenue BEBE 2020-21
2020-21 RERE 2020-21
2020-21 BEBE 2021-22
2021-22
Income
Income
from
from
Property
Property
and
and
Enterprises
Enterprises 10.208
10.208 18.855
18.855 26.848
26.848
Electricity
Electricity
(Net
(Net
Hydel
Hydel
Profit)
Profit) 5.000
5.000 7.500
7.500 12.500
12.500
Page
Page
18 18
Net Hydel Profit Arrears 5.000 7.500 12.500
Interest on Loans to District Govts. / TMAs 0.040 0.040 0.035
Interest on Loans to Financial Institutions - - -
Interest on Loans to Non-Financial Institutions. 0.163 2.292 0.309
Interest on Loans & Advances to Govt. Servants. - - -
Interest on Loans – Others 0.005 0.004 0.004
Dividends - 1.519 1.500
Civil Administration and other Functions 16.479 14.411 17.978
Fiscal Administration 0.815 1.200 1.205
Law and Order 6.878 5.884 7.555
Justice 0.622 0.573 0.750
Police Department 6.100 5.125 6.600
Jails including Civil Defense 0.156 0.186 0.205
Community Services 4.215 3.554 4.335
Communications & Works 3.900 3.270 4.025
Public Health 0.315 0.284 0.310
Social Services 4.036 3.307 4.292
Education 1.950 1.757 2.106
Health 2.086 1.550 2.186
Housing and Physical Planning 0.535 0.466 0.591
Miscellaneous Receipts 69.494 96.648 87.216
Agriculture 1.072 1.092 1.147
Board of Revenue 20.356 10.250 30.356
Fisheries 0.320 0.421 0.380
Forest & Wildlife 0.918 0.865 1.020
L&DD 1.026 1.115 1.270
Cooperative 0.003 0.003 0.004
Irrigation 4.201 4.300 11.317
Industries 0.347 0.380 0.412
Mines & Minerals 11.000 10.000 11.660
Home 0.952 0.899 1.087
Misc. 18.974 20.939 18.724
Federal / Foreign Grants 4.177 39.526 2.437
Straight Transfers 6.148 6.858 7.402
Total 96.181 129.914 132.042
Page 19
Income from Property & Enterprises mainly consist of profits of hydroelectricity generating units referred to as ‘Net Hydel Profits’ (NHP)
located in Punjab – in line with Article 161(2) of the Constitution of Pakistan 1973. An amount of PKR 3.7 billion was received as arrears of NHP
during FY2020-21. The running payment for FY2021-22 is forecasted at PKR 12.5 billion. Further, an amount of PKR 25 billion has been budgeted
for FY2021-22 in lieu of NHP with the following break-up:
PKR 12.5 bn
NHP Arrears Payment
PKR 12.5 bn
NHP Running Payment
PKR 25.0 bn
(Expected) (FY 2021-22 Forecasted) NHP Budget FY 2021-22
The other main source of Revenue under this category is ‘Interest on Loans’ advanced by the Government to financial and non-financial
institutions. The revenue from ‘Civil Administration & Other Functions’ can be divided into:
Civil Administration & Other

Functions
Law and Community Social
Order Services Services
Receipts collected by Law The Receipts from ‘Toll on These Receipts pertain
Department from sale proceeds of Provincial Roads and Bridges’ to different social
unclaimed and escheated property, are the major sources of services like Health
court fees realised in cash, general income in this category. Levy and Education etc. The
fee, fines & forfeitures, receipt of of toll on 13 new roads has Budget Estimate for FY
official record room & recoveries of already been approved by the 2021-22 has been set
over-payments, etc. Government since FY2019- at PKR 4.292 billion
20.
Receipts collected by Home
Department include sale proceeds
of articles manufactured in jail,
fines, payments on services
rendered including supplies made
by workshop of department
Receipts collected by Police
Department on account of police
personnel deputed at the strength of
Railways, Federal Government,
public departments, fees, fines,
forfeiture, motor driving license fee,
traffic fines, e-challans, police land
receipts and recoveries of
overpayments.
For Miscellaneous Receipts, the Budgetary Estimates for FY 2021-22 have been pitched at PKR 87.22 billion. Under Article 161 of the
Constitution and the NFC Award, Straight Transfers to the Provinces include Net Proceeds of the Federal Excise Duty on Natural Gas, Net
Proceeds of Royalty on Crude Oil and Natural Gas assigned to the Provinces under the Constitution. The table below compares Straight
Transfers receipts:
Page 20
(PKR Billion)
Component BE 2020-21 RE 2020-21 BE 2021-22

Net Proceeds of Royalty on Crude Oil 4.616 3.615 3.648
Net Proceeds of Royalty on Natural Gas 1.629 1.548 1.732
Surcharge on Natural Gas-share of net (0.097) 1.696 2.021
Total 6.148 6.858 7.402
Federal Grants Foreign Program Grants

+
The PSDP grant are merely a pass-through item as far as Provincial budget is
Public Sector Development Programs
concerned as the same are passed on to different executing agencies for
(PSDP)
implementation of Federal Development Projects for which these Development =
grants are received from the Federal Government. Federal Grants
(PKR Billion)
Component BE 2020-21 RE 2020-21 BE 2021-22
Programme Grants (Foreign i.e. PESP-II, NISP etc.) 4.177 3.710 2.437
PSDP Grants / Federal Grant (Dev + N.Dev) 0.000 35.816 0.000
Total 4.177 39.526 2.437
(PKR Billion)
BE 2020- RE 2020- BE 2021-
Particulars
21 21 22
DFID-Punjab Education Sector Project-II - 2.137 -
DFID-Punjab Skills Development Project 2.434 0.385 -
National Immunization Support Project - 0.697 1.347
Enhancing PPPs in Pakistan (Punjab) 0.643 0.352 0.644
IFAD-Southern Punjab Poverty Alleviation Project Program - 0.081 0.244
Hydraulic Model Study USA HRS Nandipur Irrigation Research Institute - 0.003 -
JICA-Construction of Distribution Center, Rehabilitation of Old Jhal Khanuana Water Treatment
- - 0.202
Plant
Women’s Income Growth and Self Reliance Program in Punjab (WINGS) 1.100 0.055 -
Total 4.177 3.710 2.437
CURRENT CAPITAL RECEIPTS

Current Capital Receipts of the Province include all the new loans borrowed or raised by the Provincial Government (except for loans for
specific Development projects) and recoveries of loans granted to provincial entities/authorities/financial institutions, provincial employees or
the District Governments. Current Capital Receipts may be credited either to the Provincial Government’s Account No. I (Non-Food Account)
or Account No. II (Food Account), depending on the nature of the receipt.
Page 21
▪ Money raised through loans

▪ Budgetary support programmes of multilaterals
▪ Receipts from sale of wheat
▪ Recoveries of principal amount of loans
▪ Financing for procurement of wheat
advanced by the Government to its
Employees and Autonomous Bodies
Credited to Account I Recorded in Account II
For the Financial Year 2021-22, estimate of total Current Capital Receipts is pitched at PKR 499.487 billion compared to a Budget Estimate of
PKR 443.499 during FY 2020-21. The table below provides a detailed comparison of Current Capital Receipts for FY 2020-21 and FY 2021-
22 (in PKR Billion):
(PKR Billion)
BE RE BE
Receipts
2020-21 2020-21 2021-22
Loans & Advances/ Recoveries of Loans and Advances 1.280 18.525 3.049
From District Governments/TMAs/Local Bodies 0.024 0.024 0.017
From Financial Institutions 0.000 0.000 0.000
From Non-Financial Institutions 1.236 18.477 3.009
From Government Servants 0.020 0.024 0.024
From Private Sector (Taccavi Loans) 0.000 0.000 0.000
Debt 85.350 38.972 51.099
Permanent Debt-Domestic 0.000 0.000 0.000
Permanent Debt-Foreign 85.350 38.972 51.099
Account No. I Total 86.630 57.497 54.148
Recoveries of Investment-State Trading Schemes 173.913 198.571 217.434
Cash Credit Accommodation 157.956 283.450 202.905
Account No. II Total 331.869 482.021 420.339
Innovative Financing 25.000 15.989 25.000
Total Current Capital Receipts (Account No. I & II) 443.499 555.507 499.487
Account No. I - Permanent Debt: The Budget Estimates for FY 2021-22 for
Domestic and Foreign Loans borrowed the permanent debt (foreign) have been estimated at PKR 51.099 billion. The
directly or through the Federal Government Government would receive budgetary support loans from World Bank under Punjab
comprise the Permanent Debt of the Education Sector Reform Program, Punjab Skills Development Project, Punjab Jobs
Provincial Government. & Competitiveness Project, Strengthening Markets for Agriculture and Rural
Transformation (SMART), Punjab Green Development Program, Punjab Cities
Program and Punjab Resource Improvement and Digital Effectiveness (PRIDE) Program. The Revised Estimates of FY2020-21 were lesser
Page 22
than the Budget Estimates 2020-21 due to restructuring of Disbursement Linked Indicators (DLIs) of PESP-III and SMART Projects, which is
under process with the consultation of World Bank, and owing to COVID-19 pandemic and subsequent lockdown.
Detail of Loan B.E. 2020-21 R.E. 2020-21 B.E. 2021-22

Punjab Skills Development Project 1.587 1.714 -
Punjab Jobs & Competitiveness Project 2.291 1.263 -
Punjab Education Sector Reform Programme-III 12.464 7.614 4.962
Access to Clean Energy Investment Programme 3.300 2.424 1.597
National Immunization Support Program - 0.703 0.932
Strengthening Markets for Agriculture and Rural Transformation (SMART) Punjab-Pak 7.425 4.206 5.670
Punjab Cities Program 3.878 3.807 3.807
Punjab Green Development Program 6.600 1.620 6.804
Punjab Resource Improvement and Digital Effectiveness (PRIDE) 1.650 4.779 12.150
Punjab Human Capital Investment (HCI) Project 5.364 - -
Metro Rail Transit System (Orange Line) 40.791 10.842 15.177
Total 85.350 38.972 51.099
Metro Rail Transit System

(Orange Line)
Access to
Punjab Resource Clean
Improvement Energy
and Digital
Effectiveness Investment
Programm
e
51.1
Strengthening
Markets for Punjab
Agriculture and Cities
Rs. Billion Program
Rural
Transformation
Punjab-Pak
Punjab Education Punjab Green

Sector Reform Development
Programme-III Program
National Immunization
Support Program
Page 23
Account No. II - Public Debt (Food Account): Food Account of the Province, commonly known as Account No. II, is also maintained
with the State Bank of Pakistan like Account No. I. However, the former account is meant exclusively for transactions relating to state trading
in food commodities by the Food Department.
Rs
Finances for Food Commodity purchases Wheat Grain procured directly from Receipts from sale of wheat are then
raised through ‘Cash Credit farmers by the Food Department with deposited in Account No. II, from where
Accommodation’, carried out by a Financing from Banking Consortia these are utilised to retire the Consortia
Consortium of Banks Loans
During FY2021-22, an amount of PKR 420.339 billion is estimated to be received for commodity operations compared to the amount of PKR
482.021 billion realized during FY 2020-21.
Development Capital Receipts

The loans borrowed from multilateral donor agencies through the Federal Government for specific foreign-assisted development projects are
termed as Development Capital Receipts or Foreign Project Assistance. The estimated Receipts will be utilized for a number of
Development projects for which, a total of PKR 65.222 billion worth of loans for Development projects are expected to be realized during the
FY 2021-22 including 11 new projects (in pipeline) amounting to PKR 25.078 billion which are expected to be signed during next financial year
and disbursements of these new projects will be received from respective donors accordingly. The difference between the BE and RE for FY
2020-21, PKR 16.220 billion less disbursed, arose as work could not be executed due to COVID-19 and subsequent lockdowns.
Further, at the start of FY2020-21, claims of various Provincial Departments, pending with the Federal Government came to the tune of PKR
99.58 billion (excluding NHP dues of approximately PKR 56.9 Billion). During the CFY, an amount of PKR 16.6 billion of PRA was settled and
credited to Punjab. Whereas, the current claim of PKR 84.946 billion (excluding NHP dues) is still pending (detail in table below) with the
Federal Government. These claims, which if received, will create additional fiscal space in the Development budget of the Province.
(PKR Billion)
Issues Department Amount
Payment of Mark-Up on 2.5 MMT of Federal Strategic Reserves of Wheat Claimed Food 33.796
Arrears of Devolved Vertical Programs of Health & Population Welfare Primary Health 32.28
Federal Share of Subsidy on Wheat Export Food 9.96
CDA share for Operation of RWP-ISB Metro Bus Transport 5.36
Reconciliation of Cross-Adjustments of taxes PRA 3.55
Total Total 84.946
Page 24
Payment of Mark-Up on 2.5 MMT of Federal

Food
Strategic Reserves of Wheat Claimed Department
Primary
Arrears of Devolved Vertical Health
4
Programs of Health & Population Department
Welfare
Federal Share of Subsidy on Food

Wheat Export Department Rs. 84.95
3 Billion
Transport
2
CDA share for Operation of RWP- Department
ISB Metro Bus
PRA
1
Reconciliation of Cross-Adjustments of
taxes
The Provincial Government has taken up the issue with the Federal Government during various meetings. The Chief Minister of Punjab has
also requested the Prime Minister for his intervention. However, the settlement might take longer than anticipated. It is, therefore, thought
appropriate that these claims may not be budgeted as Receipts for the CFY as their reconciliation and settlement may not actualize during FY
2021-22.
Page 25
Page 26
Chapter III – Estimates of Expenditures
B
udgetary outlays for Financial Year
2021-22 have been formulated against Major Components of Government Expenditure
the backdrop of a Covid 19 pandemic
recovering economy. The FY 2020- Current Expenditure
Enables Government to maintain
2021 brought a host of fiscal challenges.
the current level of service delivery
Notwithstanding these, Government of the Punjab
adopted a strict monitoring regime on expenditure,
regular monthly reviews, with prudent spending
being the order of the day, and without
compromising on essential services delivery. Development Expenditure
Expenditure on Health sector and allied services Enhances capacity of Government
continues to grow. Public Works program for to provide services to citizens Government
employment generation is being promoted as an Expenditure
effective tool and will receive additional funds. It
also coincides with Federal priority program of
provision of low cost housing to public as well as Capital Expenditure
a boost to construction sector in general. While Consists of Loans made, Loans
essential expenditures cannot be truncated, repaid, and Contributions made to
stringent austerity measures to curtail separate funds for meeting Long-
nonessential spending is a need of the hour to Term Liabilities, such as Pensions
achieve financial balance.
Public spending is critically significant in Pakistan’s economy. Generally, Government expenditure is carried out for the purpose of public
welfare by provision of Public Goods, investment in social sectors like Health and Education, for improvement in labour productivity, provision
of subsidies where necessary, along with equitable redistribution of income. With massive resource constraints, consequent to the pandemic
COVID-19, Government of the Punjab has made efforts to ensure that spending in key areas is not compromised and the benefits of
expenditure reach all segments of society.
Abstract of Expenditure FY 2021-22
(PKR Billion)
CLASSIFICATION BE 2020-21 RE 2020-21 BE 2021-22
Current Revenue Expenditure 1,318.338 1,314.906 1,427.900
Social Sectors 681.798 663.150 744.403
Infrastructure Development 49.268 60.057 47.636
Production Sectors 61.180 63.806 66.703
Services Sectors 513.894 515.642 557.045
Others 12.196 12.249 12.110
Current Capital Expenditure 460.292 569.193 540.114
Repayment of Principal 55.084 48.297 54.158
Investments 43.800 11.290 39.995
Loans and Advances (Principal) 29.411 27.464 25.621
State Trading in Medical Stores 0.127 0.121 -----
State Trading (Wheat) (A/C-II) 217.211 349.264 273.122
Repayment of Commercial Bank Loans (A/C-II) 114.659 132.756 147.217
Development Expenditure 337.000 375.222 560.0
Annual Development Programme 337.000 375.222 560.0
Total Expenditure 2,115.628 2259.320 2528.013
Page 27
Articles 120-126 of the Constitution of Islamic Republic of Pakistan, 1973 provide framework for Annual Budget Statement, Demand for Grants,
Charged and Voted Expenditure out of Provincial Consolidated Fund, procedure for Annual Budget Statement, Authentication of Schedule of
Authorized Expenditure and procedure for Supplementary Grants for excess expenditure.
After accommodating the demands of Current Revenue Expenditure and Current Capital Expenditure, the net surplus is available for financing
the Development Expenditure, which may be additionally financed through foreign aided projects. The budgetary allocations tend to strike a
balance between competing demands of Current and Development Expenditures. Without compromising on essential areas of Current and
Capital Expenditure, the Provincial Budget bids to ensure maximum surplus for Development Expenditure.
Budgetary Framework
Macro-Economic
Projections
Federal Transfers Provincial Receipts
General Revenue Receipts
Recurrent impact of
Current Expenditure
Revenue Surplus Development Expenditure
Development Priorities
Sectoral Allocations
Page 28
Against the various components of expenditure, a comparison of allocations in year 2020-21 and 2021-22 is explained as follows:
Total Provincial Consolidated Fund

PKR 2,115.628 PKR 2,259.320 PKR 2,528.013
Budget Estimate for FY 2020-21 Revised Estimate for FY 2020-21 Budget Estimate for FY 2021-22
1,427.9
1,318.3 1,314.9
569.2 540.1 560.0

460.3 337.0 375.2
Current Revenue Expenditure Current Capital Expenditure Development Expenditure
BE 2020-21 RE 2020-21 BE 2021-22
The Current Expenditure, which is classified into five sectors, has been estimated at PKR 1,427.900 for FY 2021-22, which is (8.3%) higher
than the outgoing Financial Year’s Budget Estimates.
Proposed allocation for Social Sectors has increased by 9.1%

from the Budget Estimate of last year
01
02 Production Sectors are maintained at current levels
03 Services Sector has an increase of 8.4% from last financial year
SOCIAL SECTOR
Social Sectors BE 2020-21 RE 2020-21 BE 2021-22

School Education 322.579 314.836 349.433
Higher Education 33.685 33.991 37.478
Special Education 0.271 0.326 0.291
Literacy and Non Formal Education 0.507 0.427 0.483
Page 29
Education 0.183 0.269
Youth Affairs & Sports 0.879 0.954 1.173
Specialized Health & Medical Education 127.761 119.492 137.919
Primary & Secondary HealthCare 123.003 124.358 135.474
Health 0.0316 0.0408
Population Welfare 5.120 5.307 7.443
Social Welfare & Bait ul Maal 2.613 2.637 2.960
Women Development 0.289 0.236 0.342
Local Government & Community Development 65.087 60.365 71.092
Total 681.798 663.150 744.403
COVID-19 and its serious threat to public health was a major driver for budgetary allocations for Non-Development and Development
Expenditure in the Social sector for FY 2020-2021. Its overarching impact on all matters pertaining to public health initiatives, as well as
emergency initiatives taken to respond to the seriousness of the pandemic will be discussed in more detail in a separate chapter. However, it
is important to note that formulation of budget estimates for healthcare and allied services is centered on operational costs of special COVID
related curative centers alongside improvement of diagnostic facilities, ongoing purchase of vaccines along with running of vaccination centers.
Simultaneously, financial support for eradication of other communicable and non-communicable diseases must continue unabated. After
promulgation of Local Government Act Punjab, 2019, funds are transferred to District Health Authorities in order to empower Local
Governments to incur expenditure in accordance with the needs of local public.
Main Pillars of Social Sector

Local Government &
Community
Youth Affairs & Sports Population Welfare Development
Education Health Social Welfare & Bait ul Women Development

Maal
Education is a most significant social service and the very premise on

which growth takes place, be it economic, or human capital, social or
Provision of Public Goods is one of the most important cultural. Education improves individuals and society as a whole and is
objectives of public sector spending. Community development, closely linked to health through understanding of preventive care and
provision of clean drinking water and sanitation services are sanitation along with improved nutritional intake. An educated
crucial to urban growth. These Urban Centers in turn become a population will be better able to make informed choices in public
hub for foreign and local investments and also create job decision making. Education Sector is of interest to all policy makers
opportunities. and practitioners alike. District Education Authorities have also been
established under the Local Government Act, 2019 empowering local governments to spend on educating children who are the future of
Pakistan.
Page 30
After promulgation of Local Government Act Punjab, 2019, funds are transferred as PFC share to Metropolitan Corporation, Municipal
Corporations, Union Councils and Town Councils, in order to empower Local Governments to incur expenditure in accordance with the needs
of local public. Devolution of financial powers inculcate positive changes including ensuring equitable distribution of national resources, uplifting
marginalised communities, increasing employment opportunities and faster decision making in facilitating economic development.
Government of the Punjab is focused on creating a conducive environment for promotion of sports. Sports activities not only boost a healthy
lifestyle but help in molding well rounded personalities with sportsman spirit who go on to represent the country in various international sports
events and competitions.
INFRASTRUCTURE DEVELOPMENT
Infrastructure Development BE 2020-21 RE 2020-21 BE 2021-22

Communication & Works 22.083 26.372 15.321
Irrigation 19.912 21.482 24.242
Energy 0.426 0.455 0.482
Housing, Urban Development & Public Health Engineering 6.845 11.747 7.590
Total 49.268 60.057 47.636
Government’s spending on construction and infrastructure vouches net increase Infrastructure Development
in physical capital assets and brings about economic gains alongside increase in
Communication &
employment opportunities. Efficient Government Expenditure in construction and
Works
public works also attracts private sector investment. Provision of affordable Rs. 15.3 billion
housing units is another target which Government of the Punjab has set for itself.
Various options were considered, after which Government of Punjab has agreed
that peri urban state land qualifies for affordable housing schemes. Government
Rs. 24.2 billion

Rs. 0.482 billion
of the Punjab is committed to providing 3 Marla affordable housing units with

Total
Irrigation
covered area of 500 sft. Construction of 1000 housing units will be undertaken in
Energy
the first phase on state land identified for the purpose. An amount of Rs. 01 billion
47.6
Billion
has been released for the project in FY 2020-2021 while an amount of Rs. 02
billion has been budgeted in CFY 2021-22.
PRODUCTION SECTORS Housing, Urban Dev

& Public Health
Rs. 7.5 billion
Production Sectors BE 2020-21 RE 2020-21 BE 2021-22

Agriculture 23.980 28.399 28.006
Forestry, Wildlife & Fisheries 5.982 6.119 6.248
Food 7.730 3.685 5.453
Livestock & Dairy Development 11.632 13.068 14.115
Industries, Commerce & Investment 10.306 11.122 11.300
Mines & Minerals 0.836 0.895 0.950
Tourism & Archaeology 0.712 0.514 0.628
Total 61.180 63.806 66.703
Page 31
Province of Punjab, is
predominantly agrarian and
remains the food basket for
Production Sectors
the entire country. The
Tourism & Archaeology
Production sector is Mines & Minerals
Rs.0.628
focused on Food Security, Rs. 0.95 billion
provision of raw inputs to
Agriculture
Agri-based industry. It
Rs. 28.0 billion
provides employment to a Industries, Commerce
large segment of the & Investment
population and also Rs. 11.3 billion 66.7
generates sizable revenue Billion
through exports. In addition
to the Current Non- Forestry, Wildlife
Livestock & Dairy & Fisheries
Development Rs. 6.25 billion
in FY 2021-22; Government
Rs. 14.12 billion
of Punjab has committed Food
resources for several Rs. 5.4 billion
initiatives to strengthen the
production sector and provide support to small scale farmers particularly. An amount of PKR 1.200 billion is allocated for Crop Insurance
Program, farmers shall be provided subsidy on agricultural inputs and an amount of PKR 2.400 billion is earmarked for Interest Free Loan
Schemes for farmers. Budgetary allocations for agriculture during FY 2021-22 will contribute towards improved research and better extension
and field services for farmers. Afforestation is another area of concern in light of growing population and starkly reduced ratio of no of trees
per person; to address this issue, regular tree plantation campaigns are organized across the Punjab.
SERVICES SECTORS
Services Sectors include current expenditure on provision of services which relate to executive and Legislative organs. Punjab Government is
fully committed to improve performance of its administrative and regulatory institutions through provision of sufficient budgetary support for
operational Expenditures.
SERVICES SECTORS BE 2020-21 RE 2020-21 BE 2021-22

Services & General Administration 35.435 37.888 41.050
Labour & Human Resource 1.110 0.730 1.377
Transport 13.360 12.613 15.844
Home Department 21.849 23.916 25.070
Punjab Police 119.177 132.969 128.940
Law & Parliamentary Affairs 1.907 2.271 2.264
Provincial Assembly 2.639 2.306 2.992
Management & Professional Development 0.198 0.203 0.219
Chief Minister’s Secretariat 0.588 0.799 0.780
Chief Minster’s Inspection Team 0.110 0.131 0.124
Governor Secretariat 0.489 0.427 0.542
Board of Revenue 14.107 14.128 14.449
Page 32
Excise & Taxation 1.530 3.008 2.207
Relief 1.481 0.388 1.499
Finance 299.907 283.857 319.682
Total 513.894 515.642 557.045
Budgetary estimates for Financial Year 2021-22 for Services Sector record 8.3% increase over last year’s Budget Estimates. Security, a very
prominent part of Services Sector, though highly priced is closely linked to economic activity. Effective policing not only helps reduce crime
rate but also has positive social and economic implications. A secure environment boosts economic activity while increase in crime rate has a
negative impact on trade and industry, leading to stalled economic growth. Despite financial stress, Government of Punjab is committed to
providing financial support to Home Department and Punjab Police. Government of the Punjab firmly believes that spending on judicial and
policing services will safeguard economic affairs and social sector public investments.
OTHERS
This Sector incorporates areas of governance and administration which are drivers of change and improvement. Planning & Development
Department leads the development portfolio of the Punjab. Its sector wise work distribution ensures that all departments receive due
representation in allocation of development budget. Not only this, Planning & Development through effective monitoring and evaluation ensures
proper closure of timeline driven projects and programs with completion of all deliverables on the part of the project/program.
Government of the Punjab is focused on creating a conducive environment for promotion of cultural activities. Tourism especially cultural and
religious tourism will serve to highlight the indigenous potential of the Province which has rich and diverse cultural history, for generations to
come. Needless to say, these activities will also attract investment and help in economic growth while also providing employment for the local
population.
Others BE 2020-21 RE 2020-21 BE 2021-22

Environment & Climate Change 0.559 0.619 0.598
Information & Culture 2.235 2.191 2.488
Auqaf & Religious Affairs 0.096 0.080 0.101
Human Rights & Minorities Affairs 0.383 0.213 0.402
Planning & Development 4.806 5.012 4.005
Zakat & Ushr 0.320 0.313 0.363
Cooperatives 1.461 1.449 1.568
Prosecution 2.333 2.368 2.582
Total 12.196 12.249 12.110
Current Expenditure in Account No. I (Non-Food)
01 02 03
Principal Repayment of Loans and advances Contributions made to

Domestic and/or Foreign made to Government Pension and/or General
Debt entities Provident Fund
Page 33
Government of Punjab maintains Provincial Account No. II (Food) with the State Bank of Pakistan. Capital Expenditure out of this account is
incurred on state commodity trading operations in food grains especially procurement of wheat for maintaining critical stocks of the staple food.
Out of sale proceeds of the grains released to the Flour Mills, loans obtained from the commercial banks for trading operations of Food
Department are repaid.
Capital Expenditure BE 2020-21 RE 2020-21 BE 2021-22

Debt Management - Repayment of Principal 55.084 48.297 54.158
Investment 43.800 11.290 39.995
Loans and Advances 29.537 27.585 25.621
Loans to other Non-Financial Institutions 29.411 27.464 25.621
Loans to Government Servants 0.000 ---- 0.000
State Trading in Medical Stores 0.127 0.121 -----
Total Account No. I 128.422 87.172 119.775
Public Debt Account No. II 331.869 482.021 420.339
Total Current Capital Expenditure 460.292 569.193 540.114
Public Financial Management Reforms has changed focus from Incremental Budgeting to Medium-Term Budgeting Framework (MTBF) against
the traditional yearly approach. On the basis of macroeconomic indicators, a Medium-Term Fiscal Framework (MTFF) was developed to finalize
an indicative resource envelope for next three Financial Years.
Finance Department has introduced a Framework for Rolling Expenditure to control and monitor expenditure on the basis of demand as against
traditional supply model. The Framework makes budgetary allocations resilient enough to combat unexpected macroeconomic challenges.
With the introduction of the Framework, Administrative Department demands release of allocated monies spread over the entire fiscal years
based on actual needs at a given time.
Page 34
Chapter IV – Annual Development Programme
GROWTH OUTLOOK OF PUNJAB

The population of Punjab, now in excess of 110 million people, is the highest in terms of province wise proportion (53 percent). The province
has the highest labour participation rate and employment level compared to the national average, and employs over 61 percent of Pakistan’s
workforce. Contributing over 54.2 percent to the national economy, the sectoral share in Punjab’s economic structure comprises 20 percent
Agriculture, 17.6 percent Manufacturing and 62.4 percent Services.
GROWTH OUTLOOK OF PUNJAB
Punjab Population Agriculture

110 Million 20%
61% workforce
Manufacturing
Projected Growth
4.8% in FY 17.6%
2021-22
Contribution Services
National 62.4%
Economy
54.2%
In the FY 2020-21, Pakistan’s economy recorded negative growth as a result of the COVID-19 economic downturn. Despite the onset of the
pandemic and the consequent adverse socio-economic impacts of it, Government of the Punjab has made substantial progress and is on the
road to economic recovery. In the current fiscal year, strategic support was provided to economic sectors to recoup economic losses and
substantial public investment was made in key social sectors like Health, Education and reforms to support the private sector and improve
investment climate were also implemented. Development priorities and Government spending for Annual Development Program (ADP) 2020-
21 was guided by Punjab Growth Strategy 2023 and Punjab Spatial Strategy 2047. As a result of effective planning and purposeful
perseverance by Government of the Punjab to trigger drivers of growth, the provincial economy improved significantly reporting a growth rate
of 4.2% in FY 2020-21. Figure 1 presents a GDP growth trajectory for Punjab over the next two years, projecting that the economy will reach
a growth rate of around 4.8 percent in FY 2021-22.
Figure 1: Provincial GDP Growth Projections, Punjab Growth Strategy 2023
8 7
7 PGS Projected 5.9
Scenario 6.3
5.5
6
6 4.2 4.5
5
4 4.8 5
4.4 PGS Base Scenario
3
2 2.6
1
-0.2
0 COVID Recovery Scenario
-1 2017-18 2018-19 2019-20 -0.2 2020-21 2021-22 2022-23
7% Growth Scenario PGS Base Scenario COVID Recovery Scenario
Page 35
Figure 2:Chapter
Chapter
Size Chapter
ofIVADP,
IV– Annual
– Annual
IVPunjab
– Annual
Development
Development
Development
Growth Programme
Programme
Programme
Strategy 2023, P&D Board
Figure
Figure
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2:2:Size
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ofPunjab
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Growth
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2023,
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1003
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865
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703603 703
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Projected
Projected
PGS Projected
Scenario
Scenario
Scenario 690690 690 700
700 700
Rs. Billion
563 560
603503 603
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Rs. Billion
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433 563
563 563 560560 560
503403 503
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403303 403 411411
403 411 COVID Recovery Scenario
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174 270
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PGS Base Scenario
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3 3 3 2017-18 2018-19 2019-20 2020-21* 2021-22 2022-23
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7% Growth Scenario PGS Base Case COVID Recovery Scenario
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Enhanced Government spending through the Annual Development Program in different sectors of the economy is the basic pre-condition for
Enhanced
Enhanced
staying Enhanced
Government
onGovernment
Government
the path spending
forspending
spending
through
achieving through
thethe
through
the
Annual
Annual
targeted the Development
Annual
Development
growth Development
rate. Program
Program
According in
Program
todifferent
inPunjab’s
different
in sectors
different
sectors
Growthofsectors
the
ofModel
the
economy
economy
ofathe economy
is the
is the
1 percent basic
basic
is the
pre-condition
increase pre-condition
basic pre-condition
in ADP forfor
spending for
will
staying
staying on
staying
on
thethe
path
on
path
for
the
for
achieving
path
achieving
for achieving
the the
targeted
targeted
the growth
targeted
growth rate.
growth
rate. According
According
rate. According
to to
Punjab’s
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to Growth
Punjab’s
Growth Model
Growth
Modela 1Model
a percent
1 percent
a
lead to a provincial GDP growth of 2 percent which leads to 1 percent improvement in employment level and 4 percent improvement in poverty, 1increase
percent
increasein
increase
ADP
in ADPspending
inspending
ADP spending
will
will will
lead
lead
to atoprovincial
lead
a provincial
to a provincial
translating into GDPGDP
over growth
growth
GDP
300,000 of growth
2ofpercent
new 2 percent
of 2which
jobs percent
andwhichleads
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which
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millionto 1improvement
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improvement
households improvement
outin of
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in employment
in employment
poverty in level
FYlevel
andand
level
4 percent
2021-22. 4 percent
and 4improvement
percent
improvement
improvement
in poverty,
in poverty,
in poverty,
translating
translating
translating
intointo
over
over
300,000
into300,000
overnew
300,000
new jobsjobs
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andand
pulling
jobspulling
and0.5pulling
0.5
million
million
0.5
households
million
households
households
outout
of poverty
of poverty
out ofinpoverty
FY
in FY
2021-22.
2021-22.
in FY 2021-22.
To achieve a growth rate of 4.8 percent in 2021-22, the size of the Annual Development Program is being increased to Rs. 560 billion. The
ToToachieve
achieve
Toaachieve
growth
a growth arate
growth
rate
of of
4.8rate
4.8
percent
percent
of 4.8inpercent
2021-22,
in 2021-22,
in 2021-22,
thethe
size
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thesize
the
Annual
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Annual
Development
Development
Program
Program is
Program
being
is beingincreased
is increased
being increased
to Rs.
to Rs.
560to
560billion.
Rs.billion.
560Thebillion.
The The
Government of Punjab is targeting a growth rate of 5.5 percent by 2022-23, for which size of the ADP will have to be increased substantially
Government
Government
Government
of Punjab
of Punjab ofisPunjab
targeting
is targeting
is targeting
a growth
a growtharate
growth
rate
of of
5.5rate
5.5
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of 5.5bypercent
by
2022-23,
2022-23,
by 2022-23,
forfor
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of will
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have
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willbe
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be
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increased
to be increased
substantially
substantially
substantially
(Figure 2). Table 1 highlights the proposed ADP shares by sector for Punjab to achieve its economic growth targets.
(Figure
(Figure
2).(Figure
2).
Table
Table2).
1 highlights
1Table
highlights
1 highlights
thethe
proposed
proposed
the proposed
ADP ADPshares
shares
ADPbyshares
by
sector
sectorby
forsector
for
Punjab
Punjab
fortoPunjab
achieve
to achieve
toitsachieve
its
economic
economic
its economic
growth
growth
targets.
growth
targets.targets.
8.2% 8.2% 13.9% 13.8%13.8%

13.8% 13.8% Education15.6% 15.6%
15.6% 15.6%
8.2%
8.2% 26.9%
26.9%
26.9% 26.9%Roads 13.9%
13.9% 13.9% Health Education
Education
Education Others Others
OthersOthers
Irrigation
Irrigation
Irrigation
Irrigation RoadsRoads & & & & Health
Roads HealthHealth
Transport
Transport
Transport
Transport
8.6%
8.6% 4.0%
4.0%
4.0%4.0% 4.8%
4.8%4.8%
4.8% 2.1% Urban
2.1% UrbanUrban
2.1% Urban
8.6% 8.6% Agriculture
Agriculture
Agriculture 2.1%
2.1% 2.1%
2.1%
Energy
Energy
Energy
2.1%
Water
Water
Supply
Water
SupplySupply Industry
Industry
Industry Agriculture Energy Development
Development
Development
Development
Water Supply Industry
KEY
KEYPRIORITY
KEY
PRIORITY
KEY PRIORITY
AREAS
AREAS
PRIORITY AREAS
AREAS
Regional
Regional
Regional
Equalization
Equalization
Equalization
Regional Equalization
Government
Government
Government
of of
thethe
Punjab
of
Punjab
thehas
Punjab
has
mademade
has
conscientious
conscientious
made conscientious
efforts
efforts
to efforts
to
address
address
to the
address
the
Development
Development
the Development
disparities
disparities
disparities
across
acrosstheacross
the
different
different
the regions
different
regions
ofregions
of
Punjab
Punjab
of Punjab
Government
through
through
increased
through
increasedof the
increased
funding,Punjab
funding, hasimprovements
improvements
funding, made
improvements conscientious
in the
in the
governance
governance efforts
in the governance to structure,
structure, address
structure,
andand the
capacity
capacityDevelopment
andbuilding
capacity
building disparities
measures.
building
measures.
measures.
South
South across
Punjab,
Punjab, the
Southbeing different
Punjab,
being
thethe
being regions
geographical
geographical of Punjab
the geographical
through
centre
centre increased
of centre
Pakistan,
of Pakistan, funding,
of Pakistan,
hashas
linkages improvements
linkages
has to
linkages
most
to most
deprived in
todeprivedthe governance
most regions
deprived
regionssuch
regions
such structure,
as as
interior
such
interior and
asSindh, capacity
interior
Sindh, building
Baluchistan,
Sindh,
Baluchistan, measures.
Baluchistan,
andand
South
South
and
of KP,
of South
South
KP,therefore
of Punjab,
therefore being
KP, therefore
Punjab’s
Punjab’s the
focus geographical
Punjab’s
focus
on on
focus on
centre of Pakistan, has linkages to most deprived regions such as interior Sindh, Baluchistan, and South of KP, therefore Punjab’s focus on
Page
Page
36 36Page 36
Page 36
Regional Equalization for the development of South Punjab will also support the Development of the most vulnerable areas of Pakistan
connected with this region. Some of the most critical priorities for South Punjab are as follows:
Most Critical Priorities for South Punjab
▪ Addressing regional disparities, especially in Education and Health.

▪ Human Development with a focus on Poverty Reduction
▪ Infrastructure linkages – while connectivity with the Federal capital and the provincial capital has improved due to
motorway connectivity within South Punjab is a need
▪ Urban development in intermediate cities/peri-urban areas through land master planning and Improvement in urban
infrastructure
▪ Agriculture Development – focusing on wheat, livestock, cotton, and fruit. Agriculture value addition is a lever for the
economic growth of South Punjab
▪ Industrial Development – establishing Industrial Estates, identifying where and how to develop and improving the
infrastructure leading to them
▪ Public-Private Partnerships – targeted and result-oriented approach in exploring avenues of public-private
collaboration
▪ Clean and Green initiative – South Punjab offers a large land mass, both mountainous and desert
Poverty Headcount Ratio in South Punjab is twice as much as rest of the province and has a 32 percent share in provincial population. In FY
2021-22, a 35 percent share in ADP has been earmarked for the development of South Punjab.
China Pakistan Economic Corridor

Government of the Punjab is committed to expanding economic cooperation with China under CPEC. From the inception of CPEC, Punjab
province has seen a rise in Chinese Corporations and Companies working in various businesses and projects in public and as well as the
private sector. With the most conducive business environment, Punjab has the potential to take lead in attracting more Chinese investments.
This is likely to augur well for economic and livelihood prospects of its citizens. After bridging the infrastructure, energy and connectivity gaps,
focus of the CPEC Punjab is now on Industrial, Agriculture and Socio-Economic Cooperation.
After inevitable delays due to COVID-19 pandemic, the flagship project Orange Line Metro Train commenced operations in October 2020. The
ridership of the project is at 70,000 passengers per day which is expected to rise gradually. Government of the Punjab is working on developing
an integrated system to increase train ridership and at the same time make the project as much self-sustainable as possible. In ADP 2021-22,
funds amounting to Rs. 10 billion have also been reserved for Special Initiatives for CPEC Economic Growth.
In FY 2020-21, work on the ongoing CPEC project Allama Iqbal Industrial City, Faisalabad was expedited on priority. Land acquisition process
was completed and work on infrastructure and provision of utilities is being undertaken in full swing. Adequate resources have been prioritized
in the coming fiscal year for the completion of Phase – I of the project, expected to be completed in June 2022. In addition to this, Government
of the Punjab also plans to fast-track implementation of CPEC socio-economic projects in FY 2021-22 since this mandate also suffered
setbacks due to the pandemic.
In order to strengthen CPEC development in the province, Government of the Punjab is developing CPEC Strategy for Punjab, which is
expected to be launched in the upcoming fiscal year. The Strategy will outline the roadmap to capture the full potential of this partnership with
China and will focus on the following:
Page 37
1 2 3 4
Development of Evaluation of Regulatory Reforms Alignment of Ongoing
Targeted Strategies shortcomings/issues to strengthen the key Development
and Plans in key hampering growth of sectors and improve Programs of the
cooperation areas of key sectors and policy overall investment Punjab with the CPEC
CPEC Long Term Plan measures for climate investments.
2030 improvement in the
context of CPEC
Revitalizing potential of PPPs in Punjab

The Public Private Partnerships (PPPs) stand as the most viable mechanism towards achieving the targets and long-run vision. This is mainly
due to due to influx of private finances, specialist skills and performance-based remuneration in PPPs. With enactment of new PPP Act 2019,
Government of the Punjab has reshaped the regulatory framework for PPPs. The new PPP Act enables the conducive environment for private
sector investment along with mobilization of private finance and improved infrastructure delivery due to envisaged efficiencies in PPPs.
Besides, the new Act strengthens institutional capacity of the Government for successful implementation of the PPPs. The additions in the
institutional arms include PPP Policy and Monitoring Board (PPP P&M Board), PPP Authority and Executive Board of PPP Authority, whilst
role of PPP Cell and Risk Management Unit, which were existent already, have been redefined with clear allocation/segregation of duties.
At the front of development of PPP initiatives in the province, during FY 2020-21, construction of Food Grain Silos project has been completed
with total project cost of Rs. 300 million. On Lahore Ring Road Southern Loop (SL-III) with total project cost of Rs. 10,448 million, the process
of financial close is in advanced stage and major hindrances in construction work have been resolved. Moreover, effort on a number of new
PPP projects have been commenced which include (i) Parking cum commercial plaza in Rawalpindi (3 Projects); (ii) Multan Vehari Road; (iii)
Faisalabad Chiniot Sargodha Road; (iv) Lai Expressway Rawalpindi; and (v) Parking cum commercial plaza at Old Mayor House Faisalabad.
Estimated cost of these projects on cumulative basis is Rs. 96 billion. Furthermore, a project of Procurement, installation and O&M of Water
meters in Lahore was launched for investor solicitation in the previous year with an estimated cost of Rs. 10.40 billion. The project will be
awarded shortly following conclusion of the bidding process.
For FY 2021-22, a pipeline of imminent PPP projects exists where project proposals are under revision process. These projects pertain to
Combined effluent Treatment Plants (CETPs), Special Economic Zones, roads and transportation and real estate development. Additionally,
a number of projects have been envisaged by Government of Punjab which include (i) Parking Plazas – 4 projects (1 in Rawalpindi, 2 in
Faisalabad and 1 in Sargodha; (ii) Commercial use of BOR land on Jail road Lahore; (iii) PPP projects on lands under control of Auqaf
Department; and (iv) Naya Pakistan Housing Development Plan, Faisalabad. Estimated cost of these projects on cumulative basis is Rs. 25
billion. Hiring of Transaction Advisors for these projects is under process and feasibility study of these initiatives will commence shortly.
Sustainable Development Goals (SDGs)

Government of Punjab has made significant progress in aligning its provincial plans, policies and frameworks with the Sustainable Development
Goals (SDGs) and committing resources for the implementation of the 2030 Agenda for Sustainable Development. Integration of SDGs into
planning and budgetary processes along with focus on policy coherence and mainstreaming approaches in order to achieve Inclusive and
Sustainable Development has also been ensured. For the FY 2021-22, the following goals/targets for SDGs have been set by Government of
the Punjab:
Page 38
Regional
01 Data Availability 02 Localization Plans 03 Development
Forum
Strengthening of data Formulation of sector- Vulnerability assessment of
availability at the Provincial/ specific SDGs localization South Punjab region and
District level for monitoring plans/ action plans, District development of South
and reporting on SDGs level localizations of SDGs Punjab Regional
indicators for data-driven and Scenario planning and Development Forum
policy making Strategic Forecasting for
SDGs in Punjab
REVIEW OF ANNUAL DEVELOPMENT PROGRAM 2020-21

COVID-19 remained a challenge for Government of the Punjab in FY 2020-21. Initial estimates predicted economic slowdown and slow revival
at the start of the financial year. Due to effective Government policies and public investments, economic recovery and growth picked up at a
much higher pace. Annual Development Programme 2020-21 was developed as a sustainable investment plan for Punjab to counter the effects
of COVID-19 and at the same time accelerate growth in key sectors of the economy. Priority areas in ADP 2020-21 were livelihood security
through Social Protection schemes; investments to fill Health infrastructure gaps, ensuring Food Security; Education and Human Capital
Development along with support to the MSME sector.
The size of the Annual Development Programme 2019-20 was set at Rs. 337 billion. Considering the government’s focus on developing human
capital, it allocated Rs. 36.3 billion for the Education Sector. For the Health sector, Rs. 42.38 billion and Rs 11.3 billion was allocated for
Specialized Healthcare & Medical Education and Primary and Secondary Healthcare respectively. Furthermore, Rs. 20.1 billion was allocated
for the Irrigation Sector and Rs 11.99 billion for the Agriculture sector. To address environmental changes and promote conservation and
environmental governance, Rs. 5.2 billion was allocated in FY 2020-21. Figure 3 depicts the ADP budget over the last four years along with
its revision and utilization.
Figure 3: ADP Allocation & Utilization (FY 2021-22)

(in PKR Billion)
700 88% 100%
600
80% 90%
635 80%
69%
500 70%
59%
400 60%
439
50%
300 350 337 40%
200 270 30%
238
210 207 20%
100
10%
0 0%
2017-18 2018-19 2019-20 2020-21*
Budget Allocation Budget Utilization Budget Allocation vs Utilization
*Source: Planning and Development Board, Government of the Punjab
Page 39
Figure 4 illustrates the number of schemes that are expected to complete by
5,889 Figure 4: Completion of Schemes in
end of June 2021. A total of 5,889 schemes are expected to be completed on
FY 2020-21
priority, out of which 1,770 are ADP schemes, 1,500 belonging to Community
2,619 Development Programme and 2,619 schemes of Sustainable Development
1,770 1,500 Achievement Programme. This number of completed schemes is being shared
with a great sense of satisfaction.
Total ADP CDP SAP

*Source: Planning and Development Board, Government of the Punjab
Management of Throw Forward

Punjab has been making efforts to reduce the size of the Throw Forward. A
Slow Moving
Backlog of 5
years or more
comprehensive detailed analysis was done to rationalise the throw forward in
ADP 2020-21. An Online Tool has also been developed to manage the Throw
Forward. The following four Pruning Filters / Criteria were used to rationalize 02
the size of Throw Forward: 01
Figure 5: Throw Forward FY 2018-19 to FY 2021-22
of Schemes
Proliferation
04
1,400 4.3 1,296 1,245
5
Throw Forward (PKR
3.7 03
1,200 4
1,024
TF in Years
1,000 2.4 2.2 3

billion)
821 Included just as

800 2
liabilities
600 1
Source: Planning and Development Board, Government
400 0 of the Punjab
2018-19 2019-20 2020-21 2021-22
Figure 5 shows that during FY 2020-21, Government of
Throw forward TF in Years the Punjab has substantially improved the Throw Forward
liability from 3.7 to 2.4 times of the Budget Allocations, which was reduced from Rs. 1,296 billion to Rs. 821 billion in absolute numbers.
During the current Financial Year (2021-22), the size of the Throw Forward in absolute numbers has increased to Rs. 1,250 billion, however
in comparison with the size of current Budgetary Allocations, the Throw Forward liability has reduced further to 2.2 times of the Budgetary
Allocations (2021-22). This has been achieved using the above listed objective criteria to manage the Throw Forward in Punjab.
Major Achievements during the FY 2020-21
▪ TB Control Programme (Rs 3,498 million), Infection Control Programme (Rs 2,873 million), and provision of
Ultrasonography Machines in 24/7 BHUs of South Punjab (Rs 364 million)
▪ Up-gradation of Radiology / Specialties Department in Services Hospital, Lahore (Rs. 2320.166 million)
▪ Provided Basic Education to 463,276 out of school children through 13,519 Non-Formal Basic Education Schools, and
Non-Formal Education Feeder Schools in 36 Districts / basic literacy skills to 34000 illiterate adults across Punjab
▪ Establishment of University of Veterinary and Animal Sciences at Bahawalpur (cost Rs 3,100 million), Registration of
37,250 calves in all districts of Punjab (cost Rs. 1,800 million), Establishment of training centre for biologics at UVAS,
Ravi Campus Pattoki (cost Rs. 398 million)
Page 40
▪ Completion of 8 roads of DG Khan Package (cost Rs. 2,430 million), Completion of Dualization of: Sargodha – Mianwali
Road (Phase-I) (cost Rs. 4,800 million), Muzaffargarh – D.G. Khan Road (cost Rs. 11,000 million) and Dina – Mangla Road
(cost Rs. 1,300 million)
▪ Training of 550,000 individuals through Skills Development Programme / projects of PSDF, TEVETA and PVTC.
Operationalization of Punjab Rozgar Scheme to facilitate SMEs. Training Facility of TEVTA institutions increased from
90,000 to 150,000 under Hunarmand Nojawan Program
▪ Higher Education Department initiated 08 New Universities (Rs. 8097.310 million) and established 32 New Colleges
(Rs.4264.446 million), established IT Labs in 38 colleges (Rs.149.978 million), provided Missing Facilities to 223 Colleges
(Rs.1534.783 million) and awarded 53,551 scholarships of worth Rs.6910.00 million to talented & needy students through
PEEF
▪ Punjab Barrages Improvement Phase-II (PBIP-II) Jinnah Barrage (cost Rs. 14,427 million), New Khanki Barrage
Construction Project (cost Rs. 23,442 million) and Up gradation of Trimmu Barrage, Punjnad Head Works (cost Rs. 16,800
million)
▪ Established 05 Special Education Centres, strengthened 7 Special Education Institutes and Upgraded 4 Special
Education Institutes to secondary level
▪ Solarization of 11,000 Public Schools in South Punjab through Punjab Ujaala Programme (cost Rs. 8,251 million)/ Saving
of 5GWh of energy units through retrofitting of Public institutions (cost Rs. 357 million)
▪ Automation of Stamp Papers (e-stamping) in 36 Districts of Punjab (cost Rs. 606 million), Online Payment of Government
receipts (cost Rs. 236.1 million), Establishment of Citizen Facilitation Centres in all Divisional Headquarters of Punjab
(cost Rs. 1,810 million)
▪ Under Southern Punjab Poverty Alleviation Project (SPPAP) 662 women given low cost houses, 743 women given small
land plots, small ruminant (2 Goats packages) to 19,777 poor women, vocational and enterprise trainings to 4,118 and
1,662 were given to women, respectively (cost Rs. 15,524.5 million)
▪ Under Tribal Area Development Project (TADP), 120 kms of metaled roads, 14 kms of roads rehabilitation, 36 Nos. of
Community Development Sub Projects, 16 Nos. of Community Solar Tube well Sub Projects and 16 Nos. of community
Drinking Water Supply Sub Project were completed
Annual Development Programme 2021-22

In FY 2021-22, Government of the Punjab aims to accelerate the growth momentum that is already indicating promising signals. The Annual
Development Programme 2021-21 has been developed with the aim of increasing economic growth, job creation and productivity. The guiding
principles adopted for ADP 2021-22 are the following:
Page 41
Improvement of basic
Human Development Enabling environment amenities through
Inclusive & balanced through Skills for private sector District Development
regional development Development resource mobilization Package
01 03 05 07 09
.
02 04 06 08
Economic Growth led Transformation of Strengthening Support for Public Targeted investments
investment Agriculture Sector compliance with Private Partnership - in priority projects
Sustainable Development PPP through Economic
Goals (SDGs) Revival Programme

has proposed an amount of Figure 6: Sectoral Share in ADP for FY 2021-22
Rs.560 billion for the Annual
Development Programme Special Initiative
2021-22. Rs.212.2 billion is 16% Social Sector
the proposed allocation for 37%
ongoing projects, Rs.277
billion for new initiatives, Others
7%
Rs.81 billion for Foreign
Assistance projects and Rs.
43.38 billion for Other Services Sector
Development Projects. The 4%
sector wise distribution of
ADP 2021-22 is illustrated in
Figure 6. Production Sector
10%
For School Education an Infrastructure
amount of Rs.35. billion has Development
been allocated. Higher 26%
Education has been allocated
Rs.15.05 billion. In Health
sector, Rs.78.7 billion for Specialized Healthcare & Medical Education and Rs.17.21 billion for Primary & Secondary Healthcare has been
allocated. Another notable feature is Rs.12.2 billion allocation for Industries and Skills Development sector, Rs. 30.04 billion allocation for
Urban Development, Rs.18.76 billion allocation for Water Supply & Sanitation, Rs.31.49 billion allocation for the Agriculture sector, Rs.30.77
billion allocation for the Irrigation sector, and Rs.58.29 for the Road sector.
In FY 2021-22, Economic Growth Initiative is being launched by Government of the Punjab, that will be an essential part of Annual Development
Programme (ADP). It will aim at stabilizing the economy and initiating a rapid recovery. The Programme will be used as a springboard to
accelerate structural shifts towards a frame worked and well thought out way forward to mitigate the effects of COVID-19 pandemic and
Page 42
catapulting the provincial economy on route to long-term growth. Through the programme, government spending in initiatives of highly
productive sectors of the economy will be increased and key initiatives focusing on Human Capital Development, Infrastructure Development
to boost the Construction sector, MSME support for spurring economic activity, Skills Development through improved Education system and
Vocational Trainings, improving agriculture productivity and building a robust Healthcare system will be implemented. This Programme will be
implemented with an allocation of Rs. 10 billion in FY 2021-22 in the most targeted manner. CPEC initiatives will also be funded through this
arrangement.
District Development Package (DDP)

Another key initiative of ADP 2021-22 will be the District Development Package (DDP) that will address challenges of service delivery,
rehabilitation & improvement of infrastructure, creation of job opportunities for the unemployed and excluded groups. Under the DDP,
Development schemes have been identified by the local stakeholders and District Coordination Committees (DCC) comprising District
functionaries. The schemes identified under DDP reflect immediate needs of the community, particularly pertaining to Roads (construction &
Rehabilitation), Sewerage/Street Pavement/ Provision of Water Supply, Improvement and Establishment of Health & Education facilities.
Substantial importance has also been given to the establishment of Higher Education institutions at the District/Tehsil level.
The Package will be implemented with a budget of Rs 360 billion over the next three years by the line Departments under the supervision of
the District Administration. Around 3,600 Schemes have been prioritized in all Districts of the Punjab. Following is the scheme and cost wise
break-up of the Package:
Sr. No. Sector No of Scheme Cost (Rs. in Million)

1 Roads and Bridges 1138 146,403
2 Water Supply & Sanitation and Urban Development 1075 57,335
3 Local Government and Community Development 752 26,507
4 Education 342 33,924
5 Health 197 18,692
6 Agriculture and Irrigation 23 3,806
7 Sports and Tourism 31 2,015
8 Others 47 6,284
Total 3,605 294,966
The major projects/ initiatives planned for Annual Development Programme 2021-22 are the following:
Page 43
Flagship Projects Completing in 2021-22
1 Nishtar – II Hospital Multan (cost: Rs. 8,842 million)
2 Punjab Agriculture Food and Drug Authority (cost: Rs 6,322 million)
3 Mother & Child Hospital Mianwali (cost: Rs 4,783 million)
4 Institute of Urology & Transplantation Rawalpindi (cost: Rs 4,370 million)
5 Dera Ghazi Khan Institute of Cardiology (cost: Rs 4,285 million)
6 CPE Institute of Cardiology, Multan (cost: Rs 3,147 million)
7 Upgradation of THQ Hospital Taunsa, D.G Khan (cost: Rs 1,201 million)
8 10 sewerage schemes by WASA in Southern Punjab (cost: Rs 2,817 million)
9 Rehabilitation / Improvement of Sewerage System in Jhang (cost: Rs 1,262 million)
Promotion of High value Agriculture through Solarization of Drip & sprinkler Irrigation System
10 (cost: Rs 1,929 million)
Major New Initiatives
Major New Initiatives during the FY 2020-21
▪ Implementation of Universal Health Coverage under Health Insurance Program in Punjab (Cost: Rs 80,000 million;
Allocation: Rs 60,000 million)
▪ Integrated Reproductive Maternal Newborn & Child Health (IRMNCH) & Nutrition Program (Phase-III) (Cost: Rs 6,706.999
million; Allocation: Rs 400 million)
▪ Enhanced HIV / AIDS Control Programme Punjab (Phase II) (Cost: Rs 2,080.9 million, Allocation: Rs. 400 million)
▪ Integrated Program for Communicable Disease Control, Punjab (Cost: Rs 2,356 million, Allocation: Rs. 250 million).
▪ Establishment of 1000-Bedded General Hospital, Lahore (Cost: Rs. 14,000 million; Allocation: Rs 200 million)
Page 44
▪ Establishment of 4 Mother & Child Hospitals in District, Layyah, Rajanpur, Attock and Bahawalnagar (Cost Rs.2,400
million, Allocation: Rs. 40 million)
▪ Strengthening of Basic Health Units of Punjab (Phase – II) (Cost: Rs. 5,500 million, Allocation: Rs. 1,100 million)
▪ Establishment of 19 Universities in various Districts of Punjab (Cost: 38,414, Allocation: Rs.1,542 million)
▪ Insaaf Afternoon Schools Programme (Cost: Rs 6,500 million; Allocation: Rs.6,500 million)
▪ Establishment of Special Children Village at Sharaqpur, District Sheikupura (Cost: Rs.800 million, allocation of Rs.150
million)
▪ World Bank funded programme “Punjab Rural Sustainable Water Supply & Sanitation Programme” will be launched
phase wise in 2009 villages of 16 tehsils across the Punjab (Cost: USD 553 million).
▪ Punjab Poverty Graduation Initiative (PPGI) (Cost: Rs. 9,000 million, Allocation: Rs. 500 million)
▪ Chief Minister Punjab’s Road Rehabilitation Program (Cost: Rs. 8,000, Allocation: Rs. 8,000 million)
▪ Dualization of Sargodha – Mianwali Road (Phase-I) (Cost: Rs. 4,786 million)
▪ Dualization of Dina – Mangla Road, Length 12.83 Km (Cost: Rs. 1,300 Million)
▪ Construction of Flyover at Nadirabad Phatak to Industrial Estate, Multan (Cost: Rs. 2,842 million).
▪ Construction of Sorra Dam (Cost: Rs. 4,500 million, Allocation: Rs.1,150 million)
▪ Chaubara Branch Canal Construction Project - Greater Thal Canal (Phase-II) (Cost: Rs.20,076 million, Allocation: Rs.
830 million).
▪ Rural Enterprises in Agriculture Development (READ) (Cost: Rs. 1,262.9 million, Allocation: Rs. 240 million).
▪ Rural Employment and Agriculture Promotion (REAP) Projects (Cost: Rs. 7,600 million, Allocation: Rs. 450 million).
▪ Program for Establishment of Model Markets in Punjab (Cost: Rs.15,000 million, Allocation: Rs. 4860 million).
▪ Monitoring and Evaluation of Ten Billion Tree Tsunami Programme (Cost: Rs. 13,187 million, Allocation: Rs. 2,567 million)
▪ Establishment of Punjab Health and Wellness Radio Station (Cost: Rs. 70 million, Allocation: 70 million)
▪ Establishment of Surgical City at Sialkot (Cost : Rs.1,721 million, allocation Rs.300 million)
▪ Establishment of High Performance Cricket Centres at Lahore, Faisalabad and Sialkot (in consonance with the Prime
Minister’s Vision of regionalizing domestic Cricket structure) (Cost: 1750 million, Allocation: 660 million).
▪ Pilot/Demonstration Resource Efficiency & Cleaner Production Investments in key Industrial Sectors (Cost: 2,000
million, Allocation: Rs. 250 million)
▪ Skilling Youth for Income Generation (SYIG) project (Cost: Rs. 9,500 million, Allocation: Rs. 1,500 million)
▪ Installation of Air Quality Monitoring System in Punjab (Cost: Rs.2,000 Million, Allocation: Rs.1,000 million).
▪ Establishment of Environmental Monitoring Center (Cost: Rs.1,000 million, Allocation: Rs.100 million).
▪ Installation of Water Quality Monitoring System in Punjab(Cost: Rs.1,400 million, Allocation Rs.400 million).
Foreign Funded Projects

The technical and financial assistance extended by international development partners supplements Punjab’s domestic resources for achieving
accelerated growth in priority development areas. Foreign funded development projects in Punjab for FY 2021-22 amounting to US$ 568.745
Page 45
million have been undertaken through the Annual Development Program (ADP), focusing on health, education, skill development, water and
sanitation,
million haveagriculture, livestock,
been undertaken irrigation,
through energy,Development
the Annual physical infrastructure, urbanfocusing
Program (ADP), development, andeducation,
on health, governance.
skill development, water and
sanitation, agriculture, livestock, irrigation, energy, physical infrastructure, urban development, and governance.
Expected cash inflows for FY 2021-22 amounting to US$ 733.05 million in the shape of Projects (US$ 506.53 Million) and Programs (US$
Expected
226.55 cashcomprises
Million) inflows forofFYloans
2021-22 amounting
and grants to US$
provided by733.05 million
our major in the shape
International of Projects Partners
Development (US$ 506.53 Million)
including theand Programs
World (US$ 353.6
Bank (US$
226.55 Million) comprises of loans and grants provided by our major International Development Partners including the World
million), Asian Development Bank (US$ 182.891 million), Danish International Development Agency (US$ 26.117 Million), French Development Bank (US$ 353.6
million),(US$
Agency Asian23.5
Development Bank (US$ 182.891
Million), International million),
Fund for Danish Development
Agricultural International Development
(US$ 19.014Agency (US$
Million), 26.117
Asian Million), French
Infrastructure Development
Investment Bank (US$
Agency (US$ 23.5 Million), International Fund for Agricultural Development (US$ 19.014 Million), Asian Infrastructure
29 Million) and Exim Bank of China (US$ 93.96 million), Foreign Commonwealth & Development Office UK (US$ 3.98 million) Investment Bank and
(US$Japan
29 Million) and
International Exim BankCooperation
Development of China (US$ 93.96 (US$
Agency million),
1.25Foreign
million)Commonwealth & Development Office UK (US$ 3.98 million) and Japan
International Development Cooperation Agency (US$ 1.25 million)
Major Initiatives by Government of the Punjab in collaboration with

Major Initiatives by Government of the Punjab in collaboration with
InternationalAgencies
International Agenciesforfor
FYFY 2021-22
2021-22
World
WorldBank ADB AIIB DANIDA
Bank ADB AIIB DANIDA AFDAFD IFADIFAD JICA JICA
Projects
Projects Projects Projects Projects Projects Projects Projects
Projects Projects Projects Projects Projects Projects
▪PunjabUrban
▪Punjab UrbanLand
Land ▪Punjab Agriculture
▪Punjab Agriculture Scheme
▪SewerageScheme
▪Sewerage ▪ Construction
▪ Construction of of ▪ Heritage
▪ Heritage & Urban
& Urban ▪ Rural
▪ Rural Employment ▪ Construction
Employment ▪ Construction
of of
systemEnhancement
system Enhancement Markets
Markets for
forLarech
LarechColony
Colonytoto Eastern Waste
Eastern WasteWater
Water Regeneration:
Regeneration: and Agriculture
and Agriculture Distribution Centre,Centre,
Distribution
(PULSE)Project
(PULSE) Project Development
Development Gulshan-e-Ravi
Gulshan-e-Ravi Treatment Plant
Treatment at at
Plant Tourism
Tourism Promotion (REAP)
Promotion (REAP) Rehabilitation of Old of Old
Rehabilitation
Projects
Projects Faisalabad CityCity
Faisalabad Development in in
Development Jhal Khanuana
Jhal Khanuana
▪Punjab Rural
▪PunjabRural ▪Constructionofof
▪Construction Lahore FortFort
and and
its its
SustainableWater
Water Thal Canal
Canal Surface Lahore
Sustainable ▪Greater Thal
▪Greater SurfaceWater
Water Buffer ZoneZone
Buffer
and
and Sanitation
Sanitation (GTC) Project
(GTC) Project Treatment
TreatmentPlant
Plantatat
Project
Project BRBD Lahore
BRBD Lahore
Work
▪Improving Work
▪Improving
▪Support to Naya Force Readiness in ▪Construction of
▪Support to Naya Force Readiness in ▪Construction of
Pakistan Housing Punjab Waste Water
Pakistan Housing
Program in Punjab
Punjab Waste Water
Treatment Plant at
Program in Punjab ▪Punjab Sustainable TreatmentBooti
Mehmood Plant&at
▪Punjab
HighwaySustainable Mehmood Booti &
Highway Shahdra
Development Shahdra
Development
Page 46
Page 46
Annual Development Programme 2021-22

(PKR million)
Sr. No. Sector Allocation
Social Sectors 205,498
1 Education 54,220
i. School Education 35,500
ii. Higher Education 15,065
iii. Special Education 755
iv. Literacy & NFBE 2,900
v. Sports & Youth Affairs 6,150
2 Health & Family Planning 98,012
i. Specialized Health and Medical Education 17,212
ii. Primary and Secondary Health Care 78,700
iii. Population Welfare 2,100
3 Water Supply & Sanitation 18,764
4 Social Welfare 1,221
5 Women Development 500
6 LG&CD 26,631
Infrastructure Development 145,403
7 Roads 58,299
8 Irrigation 30,778
9 Energy 7,000
10 Public Buildings 19,277
11 Urban Development 30,049
Production Sectors 57,900
12 Agriculture 31,497
13 Forestry 4,000
14 Wildlife 1,000
15 Fisheries 1,000
16 Food 500
17 Livestock & Dairy Development 5,000
Page 47
Sr. No. Sector Allocation
18 Industries, Commerce, Investment & Skills Development 12,200
19 Mines & Minerals 1,450
20 Tourism 1,253
Services 23,375
21 Governance & IT 5,075
22 Labour & HR Development 400
23 Transport 16,800
24 Emergency Services (1122) 1,100
Others 36,410
25 Environment & Climate Change 5,000
26 Information & Culture 510
27 Archaeology 700
28 Auqaf & Religious Affairs 700
29 Human Rights & Minority Affairs 2,500
30 Planning & Development 27,000
Special Initiatives 91,414
31 Special Programmes / Initiatives 91,414
Total 560,000
The mammoth size of this ADP will be most appropriately complemented by the substantial allocation made under the Public Sector
Development Programme (PSDP) by the Federal Government. The Punjab Government intends to put in place a robust mechanism for
effective and efficient utilization of this huge development portfolio.
Page 48
Chapter V – Public Account
T
he Provincial Consolidated Fund (PCF) has been established under Article 118 (1) of the Constitution of Islamic Republic of Pakistan,
1973. The Constitution requires that all revenues received by the Provincial Government, all loans raised by that Government and all
moneys received by it in repayment of loan, shall form part of a Consolidated Fund, to be known as Provincial Consolidated Fund.
Article 118 (2) further provides that all other moneys received by or on behalf of the Provincial Government; or received by or deposited
with the High Court or any other court established under the authority of the Province; shall be credited to the Public Account of the Province.
01 Provincial
Consolidated Fund
Trust Moneys
Received
Deposits under
Court Orders
02
Government Tax/ Loans Received &
Non-Tax Receipts Recovered Public Account
The moneys received and forming part of the Provincial Consolidated Fund (PCF) and Public Account (PA), are deposited to the Government
Treasury, cash of which is placed in a bank account titled “Punjab Account Number – I (Non-Food)”, under an agreement between the Governor
Punjab and State Bank of Pakistan, which is maintained by the State Bank of Pakistan. This account reflects a common cash balance of both
Provincial Consolidated Fund and the Public Account. However, separate sets of books of accounts for receipts and expenditure of Provincial
Consolidated Fund and Public Account of the province are maintained by the AG / District Accounts Offices. It may also be worthwhile to add
that the Government is authorized to open more than one bank account, to keep the cash pertaining to the Provincial Consolidated Fund and
Public Account separately. Moreover, to run the system of the Government in a smooth manner, more accounts can be established with the
State Bank of Pakistan. All such accounts would, however, shall form part of the Provincial Consolidated Fund or the Public Account of the
Province as composite cash balance of the PCF or PA, respectively. For example, Government of the Punjab has opened Provincial Account
Number - II (Food) with the State Bank of Pakistan for its commodity operations. Similarly, Provincial Account Number – V (District Education
Authorities) and Provincial Account Number – VI (District Health Authorities) have also been opened with the State Bank of Pakistan. The cash
balances of these accounts are treated part of the composite cash balance of the Punjab Account No-I(NF) for the purpose of overdraft facility
of the Punjab Government.
The Government, as a custodian of all moneys placed in the Public Account, has a fiduciary responsibility to receive and disburse these
moneys but is not at liberty to appropriate the money pertaining to Public Account for the general service of the Government. In terms of Article
119 of the Constitution of Pakistan, the Treasury & Subsidiary Treasury Rules and Punjab Financial Rules have been framed to: a) regulate
the disbursement of moneys from the Public Account and b) form & manner to keep the accounts thereof.
As the disbursement of moneys credited to the Public Account is not subject to the vote of the Provincial Assembly, therefore balance do not
lapse on close of the financial year. However, the deposits not exceeding five rupees unclaimed for one whole account year, balances not
exceeding five rupees of deposits partly repaid during the year then closing, and all balances, unclaimed for more than three complete account
years will, at the close of June in each year shall lapse and is credited to Government through transfer entries. Thus, the balance of the money
credited to the Public Account are carried forward on year-on-year basis, maximum for three complete financial years for the money exceeding
five rupees. Therefore, such money can be refunded within a span of three financial years after the year of deposit. On completion of life of
three financial years the unpaid credits are shifted to the Provincial Consolidated Fund as Miscellaneous receipts under Object code “C03801-
Unclaimed Deposits”. Any claim arising thereafter is refunded, as prescribed, from provincial receipt of “unclaimed deposits”.
The moneys credited to the Public Account and its disbursement are generally governed by the agreement(s) / law & rules / court orders etc.
So far as to distinguish the different kinds of credits / debits and the maintenance of Public Account is concerned, various codes with
nomenclature have been allotted at Major, Minor and Detailed levels in the Chart of Accounts (CoA).
The credits and debits of Public Account are categorized in following three categories:
Page 49
Rs
01 02 03
Cash and Bank balances, Liabilities, Loans, Deferred
Receivable loans & advances, Liabilities, Trust Accounts, Equities and Investment by
Physical Assets, and Special Deposit Accounts, Government
Investments Revolving Fund etc.
Annual Budget Statement (ABS): Summary of Major Elements of Public Account

(PKR in billion)
BE 2020-21 RE 2020-21 BE 2021-22
Assets & Liabilities – Public Account Receipt (1,640.000) (586.092) (369.647)
F01-Cash and Bank Balances - 1,218.478 1,406.809
F02-Receivables (2.000) (2.250) (2.276)
F05-Other Assets - - -
G01-Current Liabilities (887.000) (916.439) (813.073)
G02-Loans - - -
G05-Control Accounts (450.000) (529.685) (547.995)
G06-Trust Account-Fund (37.000) (36.311) (58.814)
G10-Trust Accounts-Other (120.000) (210.259) (221.255)
G11-Special Deposit Investment (139.000) (103.330) (122.438)
G12-Special Deposit Fund (5.000) (6.296) (10.605)
Assets & Liabilities – Public Account Payment 1,640.000 586.092 369.647
F01- Cash and Bank Balances - (1,324.763 (1,536.678)
F02-Receivables 1.000 0.442 0.467
F05-Other Assets - - -
G01-Current Liabilities 832.000 1,028.879 957.833
G04-Other Liabilities - - -
G05-Control Accounts 515.000 540.332 548.012
G06-Trust Account-Fund 46.000 45.949 54.982
G10-Trust Accounts-Other 111.000 193.366 210.743
G11-Special Deposit Investment 128.000 97.023 124.684
G12-Special Deposit Fund 7.000 4.864 9.604
Net of Public Account (+) (-) - - -
Page 50
Positive net reflects the position of more credits and less debits and vice versa. The net of Public account (+) or (-) may be treated as source/
financing available during a financial year for PCF. However, prudent financial management principles require that the money of Public Account
may not utilized for the purpose relating to Provincial Consolidated Fund.
The provisions of Financial Rules demand prudent Cash Management inter alia the cash pertaining to the Public Account need to be deposited
into Government Treasury and not to be kept apart from the Punjab Account No.- I (Non-Food) maintained by the State Bank of Pakistan. The
Federal Government has framed Cash Management and Treasury Single Account Rules 2020 under the Public Finance Management Act,
2019. Foregoing in view, Government of the Punjab is also taking measures for promulgation of a similar PFM Act. In the mean while Provincial
Government has initiated amendments in the existing financial rules to adopt the principles of Treasury Single Account. These amendments
together with the proposed PFM Act, shall restrict government offices from undertaking any cash operation outside the Treasury Single Account
or the principal Government account i.e., Punjab Account No.1 (Non-Food).
To ensure transparency in the disbursement from Public Account by maintaining prudent financial management the Federal Government has
devised a procedure to deposit and disburse money from Public Account, known as “Special Assignment Account, procedure for withdrawal
of funds from the Public Account of the Federation 2021”. The prime objective of devising this procedure is to facilitate the government offices
in closure of the commercial bank accounts, transfer of all the available balances to the Public Account / Account No.1 (Non-Food) and
undertake further public account transactions through the Account No.1 (Non-Food). It has therefore been found expedient to prescribe a
dedicated and hassle-free procedure for withdrawal of funds from the Public Account through non-lapsable special assignment account, as
the existing Assan Assignment Account procedure is for withdrawal of funds from the Consolidated Fund only. Considering the features of the
Special Assignment Accounts, the same has been adopted by the Punjab Government and the process of its dissemination / training of the
DDOs is already underway.
Page 51
Page 52
Chapter
ChapterVIVI– Debt
– Debtand
andContingent
ContingentLiabilities
Liabilities
DD
ebt,ebt,pension
pensionandandGPGPFund Fundinvolve
involvemajor
majorfinancial
financialliabilities
liabilitiesof ofthetheGovernment.
Government.AsAsperperthetheinternational
internationalbest
bestpractice,
practice,thethe
Government
Government specifically
specificallyincludes
includesdetails
details
of of
these
theseliabilities
liabilities
in the
in thewhite
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onon
budget
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forfor
policy
policymakers
makersandandlegislators
legislators
to to
keepkeep
a a
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onon
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If not
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these
liabilities
liabilities
cancanerode
erodefiscal
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andand
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affect
thethe
credibility
credibility
of of
budget.
budget.
Debt
DebtStock
Stock
Punjab’s
Punjab’s debt
debt
levels
levels
areare
relatively
relatively
lowlow
when
whenmeasured
measured as as
percentage
percentage of its
of its
GSDP
GSDP (Gross
(Gross Sub-national
Sub-national
Domestic
Domestic Product)
Product)andand
as as
a percentage
a percentage
of of
its its
annual
annual
revenue.
revenue.Punjab’s
Punjab’s debtdebt
consists
consists
mainly
mainlyof of
long-term
long-term loans
loansobtained
obtained
ononconcessional
concessional
terms
termsfrom
from
multilateral
multilateral
institutions
institutions
by by
thethe
Federal
Federal Government
Government andand
on-lent
on-lent
to to
Government
Governmentof of
thethe
Punjab.
Punjab.
TheThefocus
focus
of of
external
external
financing
financing
remains
remains
in the
in the
areas
areas
of of
Education,
Education, Agriculture,
Agriculture,
Transport,
Transport,Urban
UrbanDevelopment
Development etc.etc.
Breakdown
Breakdownof of
Punjab’s
Punjab’stotal
total
debt
debtis as
is as
under:
under:
7Punjab`s
7Punjab`s
Debt
Debt
Stock
Stock
asas
of of
30.06.2021
30.06.2021
(Rs.
(Rs.
Billion)
Billion)
Rupee
Rupee
Value
Value Exchange
Exchange
asas
at at %% Growth
Growth NetNet
NewNew
Type
Type
of of
Loan
Loan asas
at at
JunJun
’20’20 growth
growth
from
from Rate
RateLoss
Loss
Jun`21
Jun`21 from
from Jun`20
Jun`20 Debt
Debt
Jun`20
Jun`20 /(Gain)
/(Gain)
8Domestic
8Domestic
Debt
Debt 6.76.7 5.25.2 -22.9%
-22.9% -1.5
-1.5 -1.5
-1.5 0 0
External
External
Debt
Debt 991.0
991.0 951.2
951.2 -4.0%
-4.0% -39.8
-39.8 34.3
34.3 -74.1
-74.1
Total
Total
Debt
Debt 997.7
997.7 956.4
956.4 -4.1%
-4.1% -41.3
-41.3 32.8
32.8 -74.1
-74.1
Exchange
Exchange
Rate
Rate
(PKR/USD)
(PKR/USD) 168.35
168.35 154.41
154.41
External
External
Debt
Debt
(USD
(USD
mln)
mln) 5,927
5,927 6,194
6,194 4.5%
4.5%
TheThedecline
declinein debt
in debt
stock
stock
is mostly
is mostly
attributed
attributed
to to
PakPak
Rupee
Rupee
appreciation
appreciation
against
against
foreign
foreigncurrencies
currencies
i.e.i.e.
Rs.74.1
Rs.74.1
billion
billion
andand
remaining
remaining
Rs.32.8
Rs.32.8
billion
billion
is the
is the
amount
amountof of
newnew
loans
loans
(net
(net
of of
repayments)
repayments)added
added
in debt
in debt
stock
stock
during
during
thisthis
financial
financial
year,
year,
against
againstnewnew
as aswell
well
as as
already
already
contracted
contracted
loans
loansof of
Government
Government of of
thethe
Punjab.
Punjab.
Debt
Debt
stock
stock
in Rupee
in Rupee
terms
terms
asas
of of
Jun`21
Jun`21
shows
shows
a decline
a decline
of of
4%4%
(i.e.,
(i.e.,
RsRs
41.3
41.3
billion)
billion)
with
with
respect
respect
to to
debt
debt
stock
stock
of of
Jun`20.
Jun`20.
33.7%.7% RsRs
22.0%.0%
Punjab`s
Punjab`s
GSDP
GSDP (Gross
(GrossSub-National
Sub-National Domestic
DomesticProduct)
Product)
is is
estimated
estimated at 55%
at 55% of the
of the
National
National
GDP
GDPandand
thethe
size
size
of of
Punjab’s
Punjab’s debtdebtis quite
is quite
lowlow
when
whenmeasured
measured asas
a a
Punjab’s
Punjab’s
total
total
Debt
Debt
asas
%age
%age
of of
percentage
percentage of its Gross
of its GrossSub-national
Sub-nationalDomestic Product Punjab’s
Product
Domestic Punjab’s
total
total
Debt
Debt
asas
%age
%age
of of
GSDP
GSDP National
National GDPGDP
(GSDP)
(GSDP)
i.e.,i.e.,
3.7%3.7%andand
thethe
ratio
ratio
goes
goes
down
downwhen
whendebt
debt
stock
stock is compared
is compared with national
with GDP.
national GDP.
7 Debt
7 Debt
stock
stock
includes
includes
actual
actual
disbursements
disbursements till 15.05.2021
till 15.05.2021
andand
thethe
estimates
estimates
of loans
of loans
receipts
receipts
for for
thethe
remaining
remainingperiod
period
till 30.06.2021.
till 30.06.2021.
8 Domestic
8 Domestic
debtdebt
amount
amount
is exclusive
is exclusive
of outstanding
of outstanding commodity/wheat
commodity/wheat debtdebt
obtained
obtainedby Food
by Food
Department
Department for for
procurement
procurement of wheat,
of wheat,
estimated
estimated
at Rs
at Rs
560560
billion
billion
as on
as 31.06.2021.
on 31.06.2021.
Revised Gross
Revised Domestic
Gross DomesticProduct (GDP)
Product (GDP)estimate
estimateof FY2021 issued
of FY2021 by State
issued Bank
by State of Pakistan
Bank (SBP)
of Pakistan i.e.i.e.
(SBP) PKR 46,675
PKR blnbln
46,675 is used for for
is used calculation of percentages.
calculation of percentages.
Page
Page
5353
Chapter VI – Debt and Contingent Liabilities
Sector Wise Composition of Total Outstanding Debt as of 30-06-2021

Tourism 0.2%
Environment 0.2%
Energy 2% (%age of total
outstanding
Industries & Infrastructure 2%
debt)
Healthcare 5%
Governance 6%
Urban & Community Development 12%
Education 22%
Transport & Communication 24%
Agriculture & Livestock 28%
Sector Wise Composition of Total Outstanding Debt as of 30-06-2021 %age Debt as of Jun 30, 2021
Agriculture & Livestock 28%
Transport & Communication 24%
Education 22%
Urban & Community Development 12%
Governance 6%
Healthcare 5%
Industries & Infrastructure 2%
Energy 2%
Environment 0.2%
Tourism 0.2%
Domestic Debt
Domestic Debt of the Government consists of Cash Development Loans (CDLs) obtained from the Federal Government. CDLs are agriculture
program loans at fixed interest rates with original maturity of 25 years. Many of these loans have already been repaid and the outstanding
amount of CDLs as of Jun`21 is estimated at Rs.5.2 billion which will be get repaid in full by FY2030
External Debt
Punjab’s External Debt is concessional in nature with an average borrowing rate of 1.41% p.a. and PKR 5.2 bn
average maturity of 8.8 years as of June ‘21. The World Bank Group (including IBRD and IDA) is the
outstanding amount of CDLs
leading creditor with 46% share followed by ADB with 25% share in External Debt stock. A relatively
smaller proportion of External Debt stock consists of bilateral loans including those from China, Japan as of Jun`21
and France. Creditor wise composition is provided below.
Page 54
International Development
Association (IDA)
Islamic Development Bank

PKR 307.4 bn (32%)
Asian Development Bank
(IDB) (ADB)
PKR 0.1 bn (0.01%) PKR 240.1 bn (25%)
Govt. of France/ Agence Française

de Développement (AFD)
PKR 951 .2 Bn Govt. of China (China)
Foreign Creditors
PKR 3.8 bn (0.4%) of GoPb Debt as of PKR 230.7 bn (24%)
30.06.2021
International Fund for Agricultural International Bank for Reconstruction

Development (IFAD) and Development (IBRD)
PKR 12.2 bn (1%) Japan International PKR 130.5 bn (14%)

Cooperation Agency (JICA)
PKR 26.0 bn (3%)
Punjab`s External Debt is denominated mainly in US Dollar (75%) followed by Special Drawing Rights (14%) and Japanese Yen (7%). Table
below explains the composition of External Debt stock by currency;
(Rs Billion)
Foreign Debt Stock by Currency as of 30.06.2021
Currency Outstanding % of Total

US Dollar (USD) 715.80 75%
Special Drawing Rights (SDR) 137.72 14%
Japanese Yen (JPY) 64.85 7%
Chinese Yuan Renminbi (RMB) 28.88 3%
European-American Unity and Rights Organization (Euro) 3.84 0.4%
Islamic Dinar (ID) 0.11 0.01%
Total 951.2 100%
Redemption Profile
The redemption profile refers to the projections of annual principal repayments according to repayment schedules of underlying loans. It helps
in identifying periods in which large principal repayments will be due and taking appropriate measures to deal with such challenges. Redemption
profile of Punjab’s debt is quite smooth and is spread over a period of 36 years. Projections of principal repayments for next 14 years are
shown below:
Page 55
Redemption Profile of Principal Amount (PKR Billion)

1.01 0.18 0.16 0.19
0.39 0.30 0.22
1.59 1.12
63.50 61.13 61.27 61.16 63.17 61.91 63.29 64.40 59.82 56.70 54.56 51.85
47.47 47.63
FY 2021-22 FY 2022-23FY 2023-24FY 2024-25FY 2025-26FY 2026-27 FY 2027-28FY 2028-29FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33FY 2033-34FY 2034-35
External Loans Rep. Domestic Loans Rep.
Debt Service
Debt Service refers to the amount of annual payments on
account of principal and interest. Ratio of Debt Service to
Revenue is a good measure to assess the risk of debt
distress. Lower ratio demonstrates debtor’s ability to
4.1%
3.2%
service debt without distress.
Of Average Annual
Punjab`s Ratio of Debt Service to Avg. Revenue is 4.1% Revenues of last 3 years
for FY 2021-22 which is quite low and indicates low risk.
Debt Service9 estimates of FY2021-22 are illustrated here.
PKR 49.05 bn
Punjab`s estimated Debt Servicing for FY 2021-22 is
PKR 13.8 bn 1.0% FY2021-22 Principal
FY2021-22 Interest Payment: Debt Servicing
marginal when compared to the size of average annual
payment as %age of as %age of Average
Revenues10 of the last three years i.e., 3.9%. This indicates Average Revenues for the Revenues for the last
that the province is self-sufficient to honor its obligations on last three years three years
account of debt servicing. Debt servicing estimates of
FY2021-22 are summarized below:
Debt Servicing w.r.t. Revenues

Debt Servicing (DS) DS as % of Avg Rev.of 3 Yrs
70.00 5.0%
60.00 4.5% 4.2%
4.0% 4.1% 4.0%
% of Avg. Revenue
50.00
3.3% 3.3%
PKR Billion
40.00 3.0%
30.00 63.03 62.57 62.87

54.94 2.0%
20.00 36.30 41.22
1.0%
10.00
- 0.0%
FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22
9 Exchange rates communicated by Federal Government are used for calculating debt servicing in Rupee. In floating-rate foreign loans, LIBOR rate of 15.05.2021 has been used
for calculation of future interest payments.

10 Revenue means annual General Revenue Receipts of the province which is exclusive of capital receipts i.e. loan amount.
Page 56
Risk Analysis of Punjab’s Debt Profile
A number of indicators are used to monitor and control risks associated with government’s debt. Risk indicators act as a guideline to devise
future borrowing strategies. A few risk indicators are explained in the following paragraphs:
Refinancing / Rollover Risk

Refinancing/Rollover risk refers to the risk of refinancing retired portion of
the debt at a higher interest rate. Debt maturing in a year and Average ATM of the Punjab`s total debt portfolio
Time to Maturity (ATM) are the two indicators used to measure this is 8.7 years which is quite reasonable and
Refinancing/Rollover risk. ATM shows the average time-to-
indicates low exposure to refinancing risk.
retirement of the entire debt stock. High proportion of debt
maturing in a year and shorter ATM implies higher refinance risk, as Similarly, the portion of outstanding debt retiring
a large proportion of the existing loans will need to be refinanced in a in a year ahead is also not material
shorter period of time.
Proportion of Debt maturing in a year and ATM of Debt stock as of 30.06.2021 are given below:
Refinancing Risks are ‘Low for Punjab’

5.0% 8.8 2.6 8.7
Avg. Time to Maturity Avg. Time to Maturity
Debt maturing in 01 yr ATM Total Portfolio
(ATM) (ATM)
(% of total) (years)
Foreign Portfolio (years) Domestic Portfolio (years)
Interest Rate Risk

Interest Rate Risk refers to the exposure of debt portfolio to changes in interest rate. Proportion of Fixed Rate Debt, Average Time to Re-fixing
(ATR) and share of debt stock exposed to interest rate re-fixing in one year are the key indicators. Fixed rate debt is considered less risky as
it is not exposed to interest rate fluctuations during its life. ATR indicates the average time after which the interest rate on the entire debt
portfolio is reset. Low ATR and high proportion of debt re-fixing in one year indicate high interest rate risk and imply that debt stock is
significantly exposed to interest rate resetting over a relatively shorter period of time in case of a rising interest rate environment. Estimated
indicators of Interest Rate risk as of 30.06.2021 are given below:
Interest Rate Risk

Punjab’s debt has low exposure to interest rates
1 Fixed rate debt (% of total)
73 %
2 Debt Re-fixing in 1yr (% of total)

30 %
3 Avg. Time to Re-fixing Portfolio (years)

6 .5
Rs
Page 57
Exchange Rate Risk
99%
Exchange Rate risk refers to the exposure of the debt portfolio to changes in exchange rate.
Government of Punjab`s debt is highly exposed to FX Risk as 99% of the total outstanding debt
stock is denominated in foreign currency. However, this seemingly high risk is partially mitigated by
two factors;
Share of Foreign Debt
(as % of total)
01 02
low interest rates on foreign loans offset the overall size of Punjab’s External Debt is low
adverse consequences of exchange rate as a percentage of the provincial GSDP
depreciation i.e.3.7%
Guarantees
The Government issues guarantees mainly to Public Corporations and Public Private Partnerships (PPPs) as government support to enhance
financial viability of the projects undertaken by these entities. Currently, the outstanding guarantees pertain mainly to Public Corporations
operating in the energy sector and PPP projects in roads & transportation sector. The size of guarantees issued by General Government is
quite small compared to the provincial Revenue (2.85%) and provincial GDP (0.2%). As of 30.06.2021 the total amount of outstanding
Guarantees is estimated at PKR 48.7 billion out of which PKR 4.7 billion is attributable to Public Private Partnerships (PPP) while the remaining
Guarantees worth PKR 44 billion are issued to power projects of Punjab
Domestic borrowing limit assigned by the National Economic Council (NEC) has so far been used by the
Government to offer Guarantees to various Public Sector Entities (PSEs) to ensure/ increase the bankability of
their projects.
PENSION
Government has a Defined-Benefit (DB) Pension Scheme for its permanent employees. The pension scheme is being managed on a ‘pay-as-
you-go’ basis, i.e. pension payment during a year is made out of that year’s revenues regardless of the time of accrual of the liability.
Considering the sharply increasing burden of pension expenditure, Government is considering various options for reforming the Pension
Scheme.
Pension Expenditure
Pension is the second-largest expense of the Government of Punjab. It has been growing at a very high rate in recent years. The steep rise in
Pension Expense as a proportion of Revenue over time is a matter of concern. A glance at Punjab’s pension expenditure since FY10-11 is as
under:
Year Pension Expense Revenue Pension Expense / Revenue

(Rs. in billion) (Rs. in billion) %
FY10-11 36.40 539.00 6.75
FY11-12 50.10 606.00 8.27
FY12-13 67.40 703.00 9.59
Page 58
FY13-14 76.40 815.00 9.37
FY14-15 88.80 902.00 9.84
FY15-16 113.80 1,108.00 10.27
FY16-17 141.00 1,405.00 10.04
FY17-18 172.90 1,387.00 12.47
FY18-19 205.20 1,426.00 14.39
FY19-20 228.80 1,408.00 16.25
CAGR 22.66% 11.26%
Pension expense has grown at a compound annual growth rate (CAGR) of 23% since FY10-11 while Revenue has grown at a CAGR of 11%
respectively during the same period. As a result, Pension Expense to Revenue has increased from 6.75% in FY10-11 to 16.25% in FY19-20.
Evidently, pension liability has become one of the major sources of fiscal risk for the Government and there is an urgent need to reform the
Pension Scheme.
23 11.26% 06.75% in FY10-11

%
16.25% in
FY19-20
Compound Annual General Revenue Pension Expense /

Growth Rate Receipts have grown Revenue has
over nine years since increased
FY2010-2011
The government of Punjab follows the Federal Government in allowing an annual increase in salary and pension. Comparison of inflation and
salary and pension increases have given by the Government of Punjab since FY10-11 is as under:
Inflation Salary Pension

Year (YoY CPI) % Increase % Increase %
FY10-11 13.13 50.00 15.00
FY11-12 11.26 15.00 15.00
FY12-13 5.85 20.00 20.00
FY13-14 8.22 10.00 10.00
FY14-15 3.16 10.00 10.00
FY15-16 3.19 7.50 7.50
FY16-17 3.93 10.00 10.00
FY17-18 5.21 10.00 10.00
FY18-19* 8.00 10.00 10.00
FY19-20** 8.59 10.00 10.00
CAGR 6.42% 12.84% 11.33%
*CPI is based on new base year 2015-16;
**Salary increase as: Grade 1-16 10%; Grade 17-20 5%; Grade 21-22 Nil
Page 59
Comparison of Inflation, Salary & Pension

2010-11 2015-16 2017-18 2019-20
Inflation 13.1% Inflation 3.2% Inflation 5.2% Inflation 8.59%

Salary 50% Salary 7.5% Salary 10% Salary 10%
Pension 15% Pension 7.5% Pension 10% Pension 10%
An annual increase in salary and pension without regard to inflation may lead to unmanageable pension expenditure and liabilities. Potential
reforms to Pension Scheme should include a policy to ensure that annual increase in pension should not be higher than the annual inflation
rate.
Punjab Pension Fund

Punjab Pension Fund has been created to invest funds set aside by the Government for meeting its future pension liability. Punjab Pension
Fund’s Funding Ratio (market value of assets / present value of accrued pension liabilities) is estimated at 1.3%, on 30th June 2021. The
Funding Ratio is extremely low. A combination of higher pension contributions in Pension Fund and rationalization of pension benefits is
necessary to increase the Funding Ratio. And for this, a concerted effort in being made in collaboration with federal government and other
federating units. The history of capitalization of the fund by the Government is summarized as under:
PKR 38.1 bn
9
Total Contribution by Government (Rs bn)
5 5 5.3 5
4.8
FY 2008-09 FY 2009-10 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2018-19 FY 2019-20
Contribution by Government (Rs bn)
Page 60
Size of Pension Fund

Assets of the Punjab Pension Fund are estimated at Rs. 84.7
billion on 30th June 2021. The Government has contributed Rs.
38.1 billion into the Fund until 30th April 2021, while remaining Rs.
46.6 billion has been earned by the Fund through its investments.
Performance of Pension Fund Assets Earned by

Time-Weighted Return history is presented below: Rs. 84.7 Billion Government Fund
(June 30, 2021) contribution through
Rs. 38.1
Rate of Return (nominal)
Period
Gross Return Net Return*
Investment
FY 2008-09 15.21% 15.00% billion Rs. 46.6
FY 2009-10 13.39% 13.21%
billion
FY 2010-11 10.96% 10.81%
FY 2011-12 17.03% 16.86%
FY 2012-13 20.62% 20.46%
FY 2013-14 5.80% 5.65%
FY 2014-15 21.74% 21.57%
*Net Return means the return after deducting expenses incurred on the
FY 2015-16 11.28% 11.14%
management of PPF
FY 2016-17 10.01% 9.88%
FY2017-18 8.08% 7.97% The investment strategy followed over the years has worked well. Pension
FY 2018-19 1.43% 1.34% Fund continues to earn an attractive real rate of return because of its high
FY 2019-20 17.81% 17.72% yielding portfolio of PIBs, TFCs and NSS. The Fund’s equity portfolio has
also posted a healthy return of 28.8% during the current Financial Year.
FY 2020-21 (Projected) 12.98% 12.90%
Jul 2008-June 2021 (CAGR) 12.66% 12.52% The Fund has earned a reasonable real rate of return of 4.26% p.a. since its
inception which illustrates the success of its investment strategy.
GENERAL PROVIDENT FUND (GPF)

In addition to the Pension Scheme, Government requires its permanent employees to subscribe to the General Provident (GP) Fund, which is
a Defined Contribution Scheme. General Provident Fund contributions are deducted from salaries of Government employees and credited to
the GP Fund Account, which is part of the Public Account of the Province. The preferred way to manage GPF is to put the GPF contributions
in a separate Fund, invest these contributions in the financial markets, and maintain individual employee accounts to keep track of the GPF
balances. However, this approach has not been followed in the past. Over the years, most of the GPF balances have been used to finance the
budget deficit and, as a result, a shortfall has arisen in GFP balances relative to the GPF liabilities payable by the Government. The government
has been announcing a notional rate of profit every year in respect of GPF balances and has been running the GPF Scheme on a ‘pay as you
go’ basis.
A few years ago, the need to establish a separate Fund, for investing GPF contributions and to gradually increase its Funding Ratio to 100%
in order to make it a fully-funded off-budget GPF scheme, was realized. The Government passed Punjab General Provident Investment Fund
Act 2009 to establish an investment fund for the management of GP Fund liabilities of the government. The Government has been transferring
a significant portion of GPF contributions into the Fund in recent years.
General Provident Fund Liability

The amount of GP Fund payment of a Government employee is the accumulated contribution deducted from his/her salary during service plus
the profit announced by the Government on such contributions on annual basis.
Page 61
Based on the actuarial valuation, accrued GP Fund liability is estimated at Rs. 279.6 billion on 30th June 2021. Considering the GP Investment
Fund size of Rs 11.6 bn, the Funding Ratio of the Scheme stands at 4.1%.
Funding Ratio of GP Investment Fund

Although the Funding Ratio of GPF is still quite low, the Government
Year Contributions (Rs bn)
is committed to increasing it steadily to 100% over time. The
Government is considering a range of reforms to GPF Scheme and FY 2013-14 3.4
its management such as steadily increasing the contributions in the FY 2016-17 1.0
GP Investment Fund; linking the notional profit rate on GPF
balances with inflation rate or the actual rate of return earned by the FY 2018-19 1.0
GP Investment Fund; fully funding the GPF scheme for new FY 2019-20 1.7
employees or the employees hired after a reference date.
Total 7.1
Contributions made so far by the Government in GP Investment
Fund are summarized below:
Size of GP Investment Fund

Assets of the Punjab General Provident Investment Fund are estimated at Rs. 11.6 billion on 30th June 2021. The Government has contributed
Rs. 7.1 billion into the Fund until 30th April 2021, while remaining Rs. 4.6 billion has been earned by the Fund through its investments.
Performance of GP Investment Fund

Time-Weighted Return history is presented below:
Rate of Return (Nominal)

Period
Gross Return Net Return*
FY 2013-14 8.64% 8.64%
FY 2014-15 11.33% 11.33%
FY 2015-16 9.51% 9.51%
FY 2016-17 9.30% 9.30%
FY2017-18 7.61% 7.61%
FY 2018-19 7.72% 7.60%
FY 2019-20 17.30% 17.27%
FY 2020-21 (Projected) 11.73% 11.70%
Jul 2013-June 2021 (CAGR) 10.35% 10.33%
*Net Return means the return after deducting expenses incurred on the management of PGPIF
Page 62
Punjab General Provident Investment Fund’s Performance
02
05 07
Gross Return 11.33% 03 Gross Return 7.61%
01 Net Return 11.33% Net Return 7.61% Gross Return 17.30%
Gross Return 9.51%
04 06 Net Return 17.27%
Gross Return 8.64% Net Return 9.51% 08
Gross Return 11.73%
Net Return 8.64% Gross Return 9.30% Gross Return 7.72%
Net Return 11.70%
Net Return 9.30% Net Return 7.60%
Rs Rs
Rs
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Projected
The Fund has been investing mainly in a mix of short-term and long-term government securities in order to earn relatively higher yield with a
lower level of volatility. The Fund has earned a reasonable real rate of return of 4.04% p.a. since its inception which illustrates the success of
its investment strategy.
Page 63
Page 64
Chapter VII – Post COVID-19 Fiscal Challenges and Measures for Economic Recovery
POST – COVID-19 FISCAL CHALLENGES & MEASURES FOR ECONOMIC RECOVERY
T
his fiscal year began in the uncertain and highly volatile reality of the COVID-19 pandemic, which threatened to derail the hard-earned
stabilization and nascent recovery of the pre-COVID period. The global pandemic impacted countries across the world, where the
WHO has reported 1170.81 million confirmed cases of Covid-19 worldwide, with 3.55 million deaths as of June 2, 2021.1 Adverse
socio-economic impacts and unprecedented stress to health systems caused by the COVID-19 pandemic, have directly threatened
the world's economy and wellbeing whilst jeopardizing progress towards the United Nation's 2030 Agenda for Sustainable Development2. As
of June 3, 2021, a total number of 926,695 confirmed cases were reported in Pakistan, with a death toll of 21,022. More specifically Punjab
has the highest number of reported cases among all provinces, where the number of COVID-19 confirmed cases is 340,989, with 10,132
reported deaths.3
Financial and Economic Challenges exacerbated by COVID-19

The COVID-19 pandemic has exacerbated the economic and financial challenges for the Government of Pakistan in general and Government
of the Punjab in particular, as Punjab is the most populous province of the country. Even before the spread of the pandemic, Pakistan’s
economy was struggling with an economic crisis, mainly due to substantial fiscal and current account deficits, overburdening foreign and local
debt, and the local currency’s devaluation against the US dollar.4
Inevitably as lockdowns were imposed

in 2020 by the federal and provincial Impacts of COVID-19 pandemic
governments to contain the viral spread
of COVID-19, businesses closed down,
supply chains were disrupted and Economic growth
casual workers who relied on daily labor
found themselves out of work. Some of
Exports
the direct impacts felt through the
COVID-19 pandemic include impacts
Revenue
on Pakistan’s economic growth,
exports, revenue, employment,
Employment
inflation, incidence of poverty among
the most vulnerable segments of
society and challenges to Small and Inflation
Medium-sized Enterprises (SMEs)
among other sectors. Reportedly, Rs Poverty
Pakistan lost one-third of its revenue
and exports dropped by 50 percent in
2020. Even though the economy started
recovering quickly and Pakistan’s
exports began fetching higher prices in
the international market, the 6.5%
increase in exports from Jul-Apr 2019-
20 to Jul-Apr 2020-21 was unable to cover for the 13.5% increase in imports over the same period. This led to a trade imbalance. Furthermore,
Pakistan’s GDP growth contracted to -0.5% in FY 2020-21 as a direct impact of the COVID-19 pandemic even though it had earlier been
projected to a 2.4% growth rate in March 2020, before the onset of the pandemic.
Inflation rose considerably over the past fiscal year as supply chain disruptions impacted food commodity prices in both urban and rural areas
of Punjab. Inflation climbed to 9 percent in September 2020 across Pakistan, while double-digit food inflation continues to erode citizens’
purchasing power5. This worsened the situation for millions of households who have seen a decline in their purchasing power since 2016,
according to data from the Pakistan Bureau of Statistics. Despite being an agrarian economy, Pakistan’s population continues to face food
insecurity and price volatility for basic commodities.
Page 65
In fact, over 49% of Pakistan's working population suffered a loss of employment and/or a decrease in income during the pandemic, according
to a survey conducted by the Pakistan Bureau of Statistics in 2020 11. As a result, the incidence of poverty increased in fiscal year 2020, with
more than two million additional people falling below the poverty line. Moreover, 40% of households suffered from moderate to severe food
insecurity8.
Nonetheless, using the $1.3 billion debt relief from the
IMF, the federal government rolled out a Rs. 1.2 trillion
Cumulatively, Pakistan has faced an estimated financial loss of relief and stimulus package, the largest ever stimulus
package, focusing on healthcare, social protection and
up to Rs 2.5 trillion because of the COVID-19 pandemic in the
economic stability and stimulus. This package aims to
FY 2020-21.7 While the monetary policy is accommodative and not only help the businesses but also to help the most
fiscal policy is prudent, public debt guarantees have increased vulnerable segments of the population to alleviate their
to 92.8% of the GDP 6. The Federal Government sought miseries and suffering7. Deviating from its known
debt relief and secured an additional $1.3 billion from stand, the IMF supported Pakistan’s stimulus package
the IMF. This increase in debt relief does not resolve for opening the labor-intensive construction industry,
Pakistan’s long-standing problems with overburdening foreign including tax amnesty to those investing primarily in
and local debt but in fact exacerbates them and hinders housing building, where the unemployed daily wage
sustainable solutions in the long-term. workers could be absorbed9. Cash transfer programs
have also been expanded to protect the most
vulnerable segments of society. Additionally, the State
Bank of Pakistan cut interest rates (from 13 percent to 7 percent) and provided monetary stimulus to businesses4.
However, it must be noted that merely providing liberal fiscal and monetary stimulus to a few sectors of the economy is not sufficient for a
developing country like Pakistan that needs to generate more than 1.3 million jobs a year but its growth rate is less than 2 per cent 6. Such
stimulus may produce only sporadic growth that will not be sustainable. In this regard, synchronized and sustained growth in all sectors of the
economy is required, which would require overcoming these tough fiscal challenges.
A perennial fiscal challenge that continues to plague Pakistan’s economy severely due to COVID-19 is its gaping fiscal deficit. The State Bank
of Pakistan has noted there may be some risks that may hinder achieving revenue targets. A financial loss of Rs 2.5 trillion because of COVID-
19 during the FY 2020-21 is an extraordinary shock7. This means that the Government must keep a consistent check on its expenditures and
raise revenue by expanding tax base to develop capabilities (i.e. health and education) of its people. In this context, the United Nations has
also urged the national governments to cope with the impacts of COVID-19 by: (a) introducing essential measures to check the vulnerability of
healthcare systems, (b) accelerating the use of information and communication technologies in the societies' core activities, (c) increasing the
use of technologies and distance learning in education sector.
At the same time, a weak economic recovery around the world,

particularly in the European Union and the United States, has
subdued demand for Pakistan’s exports. While exports did increase
in the past fiscal year by 6.5% as noted earlier, this was primarily due
to global price changes as opposed to increased demand for
Pakistani goods. The issue has been further exacerbated by chronic
structural inefficiencies — exporters who have received additional
orders during health emergency days are facing energy and raw
material (especially cotton) shortages. Any country’s industrial sector
cannot grow sustainably and meet its full potential with an energy
sector plagued by debt, lack of investments and a growing
dependency on imports. This structural issue with Pakistan’s
economy, i.e. its inability to earn sufficient foreign income to pay for
its import bill and debt servicing needs, remains its Achilles’ heel7.
11 https://www.pbs.gov.pk/sites/default/files//other/covid/Final_Report_for_Covid_Survey_0.pdf
Page 66
During the COVID-19 pandemic, Pakistan’s Small and Medium-sized enterprises (SMEs) were impacted severely as many shut down and
others faced unprecedented economic disruptions. SMEs are crucial for the economy
as these businesses are spread all over Pakistan in rural and urban areas and provide
employment to a large proportion of Pakistan’s working population. They constitute
over 90 percent of the estimated 3.2 million business enterprises and contribute 40
percent to the GDP with over 40 percent of export earnings 6. Therefor e, the revival
Foreign Remittances and growth of the SME sector is one of the significant tasks ahead for the Government
and is already a part of key government strategy documents such as the Punjab
$ 24.2 billion Growth Strategy 2023.
in Jul-Apr FY 2O21
While the GDP growth fell, inflation rose and there was a trade imbalance, Pakistan’s
foreign remittances rose to $ 24.2 billion in Jul-Apr FY2021 compared to $ 18.8 billion
last year, which indicates a growth of 29 percent. Foreign remittances received by Pakistan are estimated by the World Bank to be
approximately 8 to 9 percent of the total GDP10. Even though the flow of foreign remittances has increased despite the COVID-19 pandemic,
a few economists argue that this increase will be short-lived due to diaspora job losses, particularly in countries like Saudi Arabia and the
United Arab Emirates. The State Bank of Pakistan, however, is optimistic in its outlook, arguing that Pakistan’s external sector will remain
stable during the current fiscal year7.
The ultimate goal of the

Government of Punjab’s
In comparison to many other countries across the world, including neighboring countries,
prudent development
Pakistan has been able to effectively contain the spread of COVID-19 and provide socio-economic
financing is to meet the
relief to its people. Both the federal and provincial governments have increasingly relied on
ambitions and aspirations of
evidence-based policy making to take critical decisions on a timely basis. For instance, the
the youth. To do that, the
Government is working to Punjab Government has been actively monitoring provincial and district level data on COVID-19
generate millions of jobs that cases to track infected individuals, isolate them, and/or impose smart lockdowns in heavily
expand citizens’ purchasing infected areas. Traditional silos that have hindered inter-departmental communication and
power and mitigate coordination have been overcome to a large extent during the COVID-19 crisis, especially through
Pakistan’s risks of turning the persistent use of technology. Coordination between government departments in the Punjab
demographic dividend into a Government as well as coordination between the center and provinces has considerably
demographic disaster. The improved. Consequently, Punjab government has been able to curtail the spread of COVID-19 and
latter section of this chapter as a result economic activity is gradually picking up after the third wave. Business confidence is
will elucidate the Punjab Moody’s Investors Service,
also restoring in Pakistan. According to the report of
Government’s efforts in
Pakistan’s economy will return to a modest 1.5% GDP rate in FY 2020-21 and
restoring economic growth
and setting Punjab on the accelerate to 4.4% in 202211
path to sustainable
development.
Measures for Economic Recovery

Despite the economic crisis brought on by the COVID-19 pandemic and deteriorating macroeconomic indicators, Pakistan’s economy was
able to recover at much quicker pace than had been anticipated due to timely data-driven policies by the government. The third wave of COVID-
19 presented serious challenges to the economy as many thought the worse was behind us. As restrictions eased, lockdowns lifted and
business conducive policies were developed by the government, the economy exhibited marked improvement.
Despite a negative economic growth rate in FY 2020-21, the National Accounts Committee has estimated an economic growth rate of 3.94%
for FY 2021-22 and the IMF has projected a 1.5% increase for the same time. Both of these estimates are significantly better than the economic
growth rate of FY 2020-21 and suggest that Pakistan is on the road to economic recovery. Despite the high volume of COVID-19 related
expenditures, and concessions on different taxes, fees, and loan repayments etc., the fiscal sector has also performed beyond the expectations
as a result of the government’s efforts to maintain fiscal discipline. During first three quarters of FY 2020-21, total revenue receipts increased
by 6.5% percent with total volume of Rs.4993 billion, and expenditures grew by 4.3 percent (Rs. 6645 billion). Fiscal deficit remained 3.5
Page 67
percent of GDP as compared to 4.1 percent during same period of last year. Following in the footsteps of the Federal Government, the Punjab
Government has also improved its tax collection by 16 percent to Rs. 191.5 billion during the same period. In fact, the Punjab Revenue
Authority has outperformed all other revenue collecting provincial agencies by increasing its collection of sales taxes on services by 37 percent
to Rs. 117 billion from Rs. 85.5 billion during same period of the last fiscal year. Additionally, the Excise and Taxation Department has slightly
increased its revenue collection to Rs. 26.6 billion from Rs. 22.1 billion a year ago.
Other sectors of the economy also showed a healthy trend of significant improvement during the three quarters of the current fiscal year as
compared to last year. Growth rate of Large Scale Manufacturing (LSM) increased from negative 9.9 percent a year ago to positive 5 percent.
Except cotton, all major Kharif Crops exceeded their
respective production targets. The Government’s incentives to Measures for Economic Recovery
the construction sector also proved to be a catalyst for growth
of its allied manufacturing segments. Amidst the lockdown,
more Pakistanis, who had been previously hesitant, began
online shopping and using other online services which Economic growth
contributed significantly to the positive growth of the services rate of 3.94%
sector especially in segments including wholesale and retail, Revenue receipts
transportation, free lancing, e- commerce, communications, increased by 6.5%
and online certifications. Inflation remained subdued during
first two quarters and resurfaced since February 2021. Punjab Government
However, it remained significantly low at 8.6 % as compared improved its tax
to 11.2 % last year.
collection by 16%
As the economy of Pakistan as well as that of Punjab has PRA tax collection
begun recovering from the devastating effects of COVID-19
owing to the vision and commitment of the Government and its increased 37 %
institutions, the Punjab Government is committed to PRA
completely bring the economy of the province out of clutches
of the pandemic and make it self- sufficient and advanced. In
that regard, the Punjab Government has introduced schemes,
packages, projects, and developed policies to aid the
province’s economic recovery in a sustainable and inclusive
manner. Some of these are:
Strategic & Policy Oversight through Cabinet Committee to Combat Coronavirus

The Punjab Government notified a Cabinet Committee to combat coronavirus under the chairmanship of Minister for Law and Parliamentary
Affairs. A provincial version of the National Command Operational Centre (NCOC), the Committee is the highest forum in the Punjab to
deliberate issues related to the pandemic, make policies and strategies, and supervise their implementation across the 36 districts of Punjab.
By ensuring timely and data-informed policies are used to make critical decisions for the population of the province, the Cabinet Committee is
responsible for effectively managing COVID-19 challenge. The Committee utilized the expertise of individuals and organizations across various
sectors, and used a consultative and participatory approach to ensure timely data is received to make evidence-based decisions. For instance,
effective coordination with public and private hospitals, laboratories, ventilator suppliers, monitoring of COVID positive cases in the province,
quarantining of infected individuals and imposing smart lockdowns in districts with high infection rates are just some of the things this Committee
was responsible for. Further, the Committee also ensure strict adherence to COVID SOPs in public spaces, and markets across Punjab with
the support of law enforcement agencies. A key reason for effective control of COVID-19 is the coordination between the federal and provincial
governments which ensured strategic insight and support is provided to the province.
Page 68
COVID-19 responsive budgets

In order to effectively control the spread of
COVID-19, it was essential for the Punjab
Government to not only earmark funds for this
but to ensure that policies and budgets are
responsive to the current reality. For this reason,
during FY 2019-20, the Punjab Government
diverted funds of Rs. 25 billion from different
sectors to the health sector. For the current Allocating
Diverted funds Allocated Rs.
financial year, Rs. 10 billion were allocated for of Rs. 25 billion total Rs. 13
1.5 billion for
expenditures related to COVID-19 only. The from different billion for
procuring
Government took every possible measure to sectors to the vaccines COVID related
save lives of its people by making large scale health sector. expenditures
COVID related procurements, upgrading
hospitals, and establishing Corona Vaccination
Centers all across the province. Committed to achieve the Federal Government target of vaccinating 70 million people across the country, the
Punjab Government has allocated Rs. 1.5 billion for procuring vaccines in addition to vaccine doses received from the Federal Government.
For the next financial year, the Government is allocating total Rs. 13 billion for COVID related expenditures mainly aiming for vaccinating
maximum possible people.
COVID-19 responsive policies and frameworks

At the institutional and policy level, the Punjab government aligned all provincial policies, strategies and plans with the reality of the COVID-19
pandemic. By ensuring that key provincial documents are responsive to COVID-19 and its socio-economic impacts, the government ensured
that every department effectively responds to the most critical needs. The Punjab government developed a comprehensive and holistic
response to COVID-19 through the Responsive Investment in Social Protection and Economic Stimulus (RISE) Framework. This document
integrates seven critical pillars which provide Punjab with a realistic framework to overcome the current health, economic and social protection
challenges.
Tax relief package

Despite the constraints, Punjab was able to offer PKR. 106 Billion in direct Tax Relief package
and indirect COVID Tax Relief making it the largest relief package offered in
Punjab’s PKR. 106 Billion in
Punjab’s history. To support the economy due to COVID-19, the Punjab
direct and indirect COVIDTax
Government introduced a highly generous tax relief package of Rs. 56 billion Relief
by reducing sales tax on services for different sectors, stamp duty, property
Receipts of Rs. 334.1 Bn. against
tax, rate of entertainment duty, to name a few. As a result of the positive
estimates of Rs. 317.1 Bn. for FY
effects generated by this relief package, the Government is expecting a total
2020-21.
receipt of Rs. 334.1 billion against budgeted estimates of Rs. 317.1 billion
for FY 2020-21. Similarly, for the next financial year the Government has Tax relief package of Rs. 56
extended a Tax Relief Package worth Rs. 50 plus billion that will further billion
bolster the recovering economy of the province. With this package, the
Government is hopeful to make total receipts of Rs. 379.526 billion during Receipts of Rs. 379.52 Bn.
during next financial
next financial year 2021-22.
Punjab Rozgar Scheme

Government of the Punjab launched the Punjab Rozgar, a soft loan scheme for SMSEs, in October 2020. The scheme has become very
popular in the public and within very short time of 6 months, 13,740 applications of loans amounting to Rs.18785.27 million have been received.
Out of these 596 applications, sound business plans have been approved and loans amounting to Rs. 426.1 million would be disbursed by the
end of current financial year. It shows higher success ratio of the scheme along with the potential job creation for about 1.1 million individuals.
During the next financial year, the Government is expecting total loan disbursement more than Rs. 10 billion.
Page 69
Chief Minister Self Employment Scheme

Loan from Rs. 50,000 -
Another pro-poor financial assistance scheme of the Punjab Government is the
Rs. 300,000
Chief Minister Self Employment Scheme under which interest free loans up to
Rs.50,000 are given to those in need for starting or improving their own small-
scale businesses. During the current financial year, the Government has
disbursed over 340,893 loans that amount to Rs. 11.3 billion. For year 2021-22,
loans worth Rs. 21 billion are expected to be disbursed through revolving the
fund amounting to Rs. 12 billion. Due to the popularity of the scheme and its
considerable economic impacts on people living below the poverty line, the
Government is planning to enhance the limit of the loan from Rs. 50,000 to Rs.
300,000.
Technical and Vocational Education

Loans worth Rs. 21
The technological shift post-COVID-19 has also brought opportunities for
billion to be disbursed
talented Pakistani youth as demand for Pakistan’s technical and vocational
professionals and semi-professionals increases. TEVTA has trained over
25,000 trainees in collaboration with Amazon, Facebook, Dell, and Daraz etc. All of these trainees were in turn hired after the successful
completion of IT programs and courses. In addition to this, the number of graduates of TEVTA has remained 105,000 for general skills, e-
commerce, and IT related courses. Some of these graduates are earning as high as $300 to $500 per month through free lancing, according
to market estimates. In the FY 2021-22, TEVTA is aiming to train 225,000 students as it sees the value in investing the skills of the Pakistani
youth.
Healthcare Reforms
The greatest impact of the COVID-19 pandemic has been on the healthcare infrastructure and systems of Pakistan and all its provinces,
highlighting critical areas that need improvement. As a result, the Punjab government increased the total Health sector allocation by 22%
(FY2017-18: Rs. 233 Bn to FY202-21: Rs. 284.4 Bn) and will further increase this substantially in the forthcoming budget. One of the key
initiatives that the Punjab Government
undertook is the provision of Health cards to
under-privileged households so their Allocation FY202-21
healthcare needs may be effectively met. Rs. 284.4 Bn
Over 5.4 million households have received
health cards until now and by December
2021 the health card will provide universal Government increased
health coverage to the 110 million the total Health sector
inhabitants of Punjab. Other health related allocation by 22%
interventions by the Punjab government
include immunization of 81% of its children
in 2019-20 that increased from 70% in 2014-15; induction of over 32,000 healthcare professionals to improve the provision of healthcare to
people; upgradation of 49 nursing schools and introduction of a new service structure of nurses. Further 173 hospitals were dedicated for
Corona patients; additional 15721 beds including 787 oxygen beds were added in these hospitals and 2284 HDUs were reserved for Corona
patients. 43 testing labs for Covid-19 tests with accumulative capacity of more than 40,000 test per day and 857 vaccine centers are working
in the whole province. To meet the inflated demand of HR due to high pressure of corona cases in hospitals, 490 doctors (MOs/WMOs), 2
consultants, 795 nurses, 250 allied, and 419 support staff were recruited in addition to existing HR.
Education Reforms
One of the most significant and pressing challenges being faced by school-going children across the globe is on learning losses as a direct
consequence of COVID-19. Many schools, colleges and universities shut down for long periods of time to curtail the spread of COVID-19 and
led to major learning losses. In a country where enrollment is already very low and the literacy rate needs further improvement, this proved to
Page 70
be a colossal loss. Therefore, the Government of
Punjab increased allocation to the Education sector Government of Punjab increased allocation to the Education
by 13.4% in FY 2020-21. Further to ensure sector by 13.4% in FY 2020-21
uninterrupted education of students from vulnerable
communities, the Punjab Government gave a waiver
of admission and tuition fee to overcome declining
admission and enrollment rates. Other interventions
that the Government of Punjab has introduced over
the last year includes the Insaaf Afternoon School Insaaf Afternoon School Program in 577
Program in 577 schools across 22 districts and schools across 22 districts
increase in the number of high schools across Punjab
by 20% since 2018, to name a few.
Social Protection Reforms

The lockdowns and disruptions in businesses led to increased unemployment and/or
income losses among over half of Pakistan’s working population. Those who were near
the poverty line were pushed into poverty as COVID-19 further deepened inequalities. One
of the key highlights of the government’s COVID responsive interventions has been its
focus on the most vulnerable and marginalized segments of the population, which has
been lauded internationally. In order to provide comprehensive social protection to the
most vulnerable segments of the population, the Ehsaas Emergency Cash Program worth
PKR 150 billion was launched, out of which PKR 81 billion has been disbursed to over 6.6
million families and PKR 200 billion has been allocated to daily wage workers.
Furthermore, interest free loans up to Rs. 50,000 are also being provided to those in need.
Some other programs introduced by the Punjab Government include the establishment
and operation of 93 Pannah Gahs and 121 Langar Khanas; Ba-Himmat Bazurg Program for person older than 65 year; Nai Zindagi Program;
Unconditional Case Transfer for Persons with disabilities; Income Generation Scheme for disabled people; Women Income Growth and Self
Reliance Programme at a cost of PKR 7.14 Billion with 292000 beneficiaries; increase in Social Security coverage for Workers where 251,445
cards have been issued between 2018-2021 compared to only 89,241 cards issued from 2013-2018.
Public Private Partnership (PPP)

Although the economy has started recovering from shock of COVID -19, the Punjab Government is still facing hard challenge of expanding its
development portfolio that can meet the actual needs of the province. Therefore, the Government is committed to extend its full support to the
private sector and to encourage it to make maximum investments in partnership with the public sector for implementing social development
projects. The PPP Authority has worked out different infrastructure and other infrastructure projects of total worth Rs.190 billion to be executed
in PPP mode during FY 2021-22.
Increased funding to Annual Development Program 2021-22

Investments through Annual Development Programs are very crucial for the equitable and inclusive economic progress of the province. Due
to COVID-19, the government had to squeeze its development expenditure by diverting Rs. 25 billion to the health sector for combatting the
pandemic. While this was an urgent need of the hour, it imposed major economic repercussions. Similarly, during the FY 2020-21 the Annual
Development Program’s budget amounted to Rs. 337 billion because of which numerous sectors could not generate considerable economic
activity. However, as the provincial economy is on the road to recovery and has higher collections of revenues (both Federal and provincial),
the Government has not only enhanced revenue targets for FY 2021-22 but has also increased the ADP funding by 53% percent to Rs 550
billion. This increase in ADP funding along with the PPP package of 190 billion will play crucial role in accelerating the recovery of the Punjab
economy and achieving the target of 5 percent GDP growth rate in FY 2021-22. It is pertinent to highlight that due to prudent financial
management, Punjab Government was able to divert additional funds worth Rs. 22 billion for development program during the current financial
year.
Page 71
Page 72
Chapter VIII –Chapter
Public Financial
VII – PostManagement
COVID-19 Fiscal
(PFM)Challenges
Reform and Measures for Economic Recov
P
ublic Financial Management (PFM) reforms refer to the set of laws, rules, systems, and processes used by national and sub-national
governments to mobilise revenues, allocate funds, undertake public spending, account for funds and audit results. A strong PFM
system is an essential aspect of the institutional framework for an effective state. Improving effectiveness in PFM systems allows
governments to make the best use of resources.
Over the years, Government of the Punjab (GoPb) has achieved some key milestones in this journey of PFM reforms, which clearly
demonstrates the priority assigned to the instant policy space. Some of the momentous initiatives undertaken in the previous years include the
creation of Punjab Revenue Authority, the establishment of Punjab Pension Fund, Debt Management Unit, Corporate Finance Unit, and the
introduction of Medium-Term Budget Framework, citizens budget and e-payments of taxes. Some of these reforms have contributed to a
marked increase in the own-source revenue, fiscal responsibility, improved quality of technical input for strategic and operational levels decision
making and improvement in Pakistan’s ranking on the Ease of Doing Business Index.
Punjab Revenue Debt Management Medium-Term E-Payments of

Authority Unit Budget Framework Taxes
02 04 06
01 03 05 07
Punjab Pension Corporate Citizens Budget

Fund Finance Unit
Foundation of the Next Generation of Reforms

Public Expenditure and Financial Accountability Assessment (PEFA) is a globally recognized methodology to assess the performance of any
PFM system. In 2019, PEFA was undertaken for GoPb with technical assistance from World Bank and Foreign Commonwealth Development
Office (FCDO, formerly DFID), UK. This identified the gaps in the PFM system which include weaknesses in policy-based budgeting, budget
unreliability, low budget transparency, low predictability in budget execution, weak legislative scrutiny and ineffective accountability
mechanisms. PEFA 2019 has helped shape the reforms for the coming years.
Vision: PFM Reform Strategy 2025

To address the issues highlighted in the PEFA 2019, a systematic
Upon approval of the Strategy by GoPb, the World approach was adopted by Finance Department (FD). The
Bank adopted the same as the foundational document for its department took development partners on board to structure the
304
reform agenda. The World Bank and FCDO became the leading
USD million Programme titled ‘Punjab Resource partners to the reform efforts of the Finance Department. FCDO’s
Improvement and Digital Effectiveness (PRIDE)’. technical assistance through the Subnational Governance (SNG)
Programme helped the department in developing a holistic Public
Financial Management Reform Strategy 2025 to address the deficiencies highlighted in the assessment.
The PFM-RS comprises nine pillars, each of which addresses a major area within the PFM system. The pillars are presented in a Results
Framework that specifies the vision, result areas, issues, and recommended actions to counter these challenges. PFMRS 2025 aims to develop
a robust PFM system setting out long-term goals and a vision for PFM reforms defining priorities and sequencing of the reform process.
Effective implementation of the strategy is expected to build the capacity of Finance Department officials and increase tax and non-tax revenue
Page 73 Page 72
Chapter VIII – Public Financial Management (PFM) Reform
eventually leading to improved service delivery. The
01 strategy includes a pillar on disaster risk financing
Revenue mobilization is (DRF) systems, which is extremely relevant given the
strengthened to finance services COVID-19 pandemic. The inclusion of DRF not only
improves budget credibility through improved fiscal
Rs
02 risk assessment but will also help provisioning for pre-
PFM and Disaster Risk Financing arranged disaster financing instruments. This is the
first time DRF has been included in any provincial PFM
03 strategy in Pakistan. In the coming Fiscal Year, GoPb
Quality of budgeting is improved will be conducting an analysis of climate and disaster
related expenditure along with an assessment of
04 climate and disaster budget tagging and tracking
Budget is executed as planned and systems. Moreover, a donor coordination forum has
fiscal risks are managed better
been notified to coordinate the efforts of all donors
05 involved in PFM and oversee the implementation of the
Reformed development budget strategy.
systems
06 Punjab Resource Improvement and
R Improved management of funds in
local governments
Digital Effectiveness Programme
07 During FY 2020-21, the government started the
Improved legal and regulatory implementation of a USD 304 million PRIDE
framework programme based on the PFM Reform Strategy. The
08 objectives of the programme are to increase own-
Capacity enhancement for better source revenue and improve the reliability of resource
PFM allocation and access to digital services for people and
09 firms in Punjab.
IT for effective PFM and revenue
mobilization Without an effective oversight and implementation
mechanism, even the best of the strategies may fail.
Realizing this, relevant fora of Programme Steering Committee for PRIDE, Donor Coordination Forum, and Advisory Committee on Provincial
Finance have been created to provide guidance and oversee implementation of the strategic vision.
Medium-Term Fiscal Framework

Over the years, GoPb has been working towards institutionalization of the medium-term fiscal framework and medium-term budgetary
framework in its processes and systems. The government developed its projections for MTFF considering the pandemic. MTFF includes
forecasts of the government’s revenues, expenditures and debt providing the government with a medium-term horizon, enabling better fiscal
discipline. FD also conducted a training on MTFF to develop the capacity of its officials. The budget call circular was revised to align with MTBF
guiding line departments on how to prepare their budget submissions with a medium term perspective. Budget ceilings were also published to
the line departments giving them a resource envelope for the upcoming budget. MTBF will improve aggregate fiscal discipline and strategic
prioritization of available resources. In the coming FY2021-22, GoPb aims to improve MTBF processes by preparing a Budget Strategy Paper
that will provide intersectoral strategic priorities, forward estimates and space for priority setting.
Page 74
Regulatory and Legal Reforms
Currently, the GoPb is in a process of finalizing two laws to improve
the regulatory function envisaged under Article 119 of the Constitution
of Pakistan: first, Public Financial Management Act, and second,
Fiscal Responsibility Debt Management Act (FRDMA). The former, in
addition to strengthening management of public finances to improve
01 02
implementation of fiscal policy for better macroeconomic
Fiscal
management and to strengthen budgetary management, will fulfill the Public
constitutional requirement to regulate the provincial financial Responsibility
Financial
management through an Act of Provincial Assembly, which is being Debt
Management
regulated through rules duly approved by the Governor. It may also Management
address the issues of outdated provisions of existing rules, regulation
Act
Act (FRDMA)
of separate legal entities created by the successive governments
under different laws, weak controls of regulatory entities, and cash
management practices. And the latter will pave way for prudent fiscal
and debt management by laying down key principles of financial management to ensure financial discipline by embedding a few quantitative
targets pertaining to fiscal and debt management. This is also in line with the direction of reforms envisaged under the PRIDE Programme.
This year, Finance Department is presenting a Fiscal Risk Statement to the legislature, disclosing all major risks to the provincial finances.
Treasury Single Account

Finance Department, in collaboration with State Bank of Pakistan and Accountant General Punjab, is working on the Treasury Single Account
framework. Through the TSA framework, the government can bring in cash, placed in commercial accounts maintained by government entities,
helping address issues of fiscal deficit. The government will also introduce a policy for the opening of new commercial bank accounts. Through
the implementation of TSA, the government expects an improvement in the liquidity position of the government, allowing the government to
enhance resource utilization. It enables the government to consolidate and manage cash resources, lowering debt servicing costs and reduce
the fiscal deficit at the national level.
Budget Transparency
Budget transparency and accountability are important elements in budget efficiency. Improvements in budget transparency will also strengthen
scores in PEFA indicators. To increase
budget transparency, Finance Department
prepared the first ever mid-year budget While last year’s white paper included information on contingent liabilities,
execution report in FY 2020-21. The mid- an important element of PEFA’s Performance Indicator-5 i.e., budget
year budget execution report allows for documentation, this year’s budget will include disclosure of financial
the analysis of budget spending and assets, fiscal risk statement, explanation of budget implications of new
enables a comprehensive assessment of
policy initiatives and quantification of tax expenditures.
actual spending and revenue collection
against original estimates at the midpoint of
the budget year. It also helps identify the need for
changes in budget allocation, including whether there is a need for supplementary budgets. Budget execution reports will help identify variances
between actuals and allocations and present recommendations to ensure that variance is within an acceptable limit. This practice will not only
continue next year but the government will also prepare a year-end report looking at the government’s performance for the entire year. This
will have a comprehensive assessment of actual spending and revenue collection against budget estimates at the end of the financial year.
Year-end report will help take stock of the government’s performance in realising its targets and performance indicators and informs future
policy direction.
Page 75
Fiscal Space Reforms
Reforms undertaken by FD have not only focused on improving budgeting
and fiscal strategy but also to increase fiscal space. To increase its own
3
source revenue, the government is undertaking different reforms relating to
different taxes. Provincial excise is the third largest tax collected by the PKR .1 billion
Excise Taxation & Narcotics Control (ET&NC) Department, however, the
efficiency of excise duty collection is undermined by the outdated legal third largest tax collected by the Excise Taxation &
framework, the Excise Duty Act (1914), and an outdated system of tax Narcotics Control (ET&NC) Department
collection, monitoring, record keeping, regulation of licenses/ permits and
transport of spirit and liquor. The ET&NC Department is revising the Excise
Duty Act and its rules to improve the efficiency of revenue collection while minimising associated risks. The revisions will aim at addressing
issues related to:
CREATIVE THINKING - STRATEGIC DOING
01. Efficiency in Administration
02. Use of Technology
03. Address Weaknesses in System
01 02 03
Increased efficiency in excise Use of technology to improve Address weaknesses in the
administration excise administration and system for monitoring
reduce the interface between production at distilleries and
taxpayers and tax collectors breweries
In FY2021-22, GoPb also plans to reform Urban Immovable
Property Tax (UIPT) and Motor Vehicle Tax (MVT). UIPT, a local 01 02
government tax, is an extremely important tax for ET&NC new valuation
integration of
Department. By realizing its potential, the dependence of local tables for UIP Tax
MIS and GIS
governments on provincial transfers can be reduced. This could also datasets
help in establishing a link between local taxation and local provision
of services and potentially create a system of local accountability.
UIPT
The reforms in this space include formulation and implementation of
new valuation tables for UIP Tax, integration of MIS and GIS
datasets and effectively use the integrated system for tax collection,
and deliberations to move from Gross Annual Rental Value to Tax
Reforms
Capital Value for assessment of UIPT.
integrated shifting to
system for tax Capital Value
collection for collection
03 04
Page 76
Chapter
ChapterVIIIVIII– Public
– PublicFinancial
FinancialManagement
Management(PFM)
(PFM)Reform
Reform
Motor
MotorVehicle
VehicleTaxTax(MVT)
(MVT)isisalso
alsoa asignificant
significanttaxtaxforforET&NC
ET&NCDepartment.
Department.The The
government
government has
has tried
tried toto automate
automate motor
motor vehicle
vehicle base
base forfor
thethe regulation
regulation ofof motor
motor vehicles
vehicles
andcollection
and collectionofofMVT.
MVT.Currently,
Currently,a apilot
pilotisisunderway
underwaythatthatisis testingthe
testing theuse
useofofhandheld
handheld
readersininparking
readers parkinglots
lotsand
andgantry
gantryreaders
readersplaced
placedatatmain
mainentry/exit
entry/exitpoints
pointsand
andmain
main
roadstotoidentify
roads identifyvehicle
vehicletoken
tokentax
taxdefaulters,
defaulters,increasing
increasingefficiency
efficiencyasastraffic
trafficstops
stopswill
will
bebelinked
linkedtotoananE-Pay
E-Paysystem
systemforforspot
spotcollection
collectionofofdues
duesfrom
fromdefaulters.
defaulters.The Thepilot
pilotisis
expected
expected toto help
help reduce
reduce tax
tax evasion
evasion andand thereby
thereby supportanan
support increase
increase inin revenue.
revenue.
In In
thethe
context
contextof of
Covid
Covid
situation,
situation, GoPbGoPb hashasnotnot
onlyonly
developed
developed Covid-sensitive
Covid-sensitive taxation
taxationandandrevenue
revenueproposals
proposals butbut
also
also
focused
focused onon
areas
areasof of
taxation
taxation
andandrevenue
revenue reforms
reforms thatthat
would
would improve
improve thethecollection
collection
byby
improving
improving thetheefficiency
efficiencyof of
taxtax
collection.
collection.
Concessions
Concessions were
wereallowed
allowed onon
property
propertytaxtax
andandmotor
motor
vehicle
vehicle taxtax
by by
extending
extending thethe
rebate
rebate
period.
period.
Moreover,
Moreover, to to
encourage
encourage payments
payments through
through e-pay
e-paya special
a special discount
discount
of of
5%5%
waswasoffered
offered
ononMVT MVT
andandUIPT.
UIPT. TheThedepartment
department is supporting
is supporting revenue-raising
revenue-raising pilots
pilots
including
includingautomation
automation andand
integration
integrationof of
GIS/MIS
GIS/MIS data
data
forfor
property
propertytaxes,
taxes,
thethe
useuse
of of
‘track
‘track
andandtrace’
trace’forfor
distilleries/breweries,
distilleries/breweries,andandintegration
integration of of
taxtax
databases
databases to to
identify
identify
sales
sales
taxtax
evasion.
evasion.TheThe
pilot
pilot
of of
integration
integrationof of
property
property
taxtaxsystem
system willwill
automate
automate property
propertysurveys,
surveys,integrate
integratethethe
useuse of of
MIS MISandand
GIS,
GIS,identify
identify
excluded
excluded areas,
areas,develop
develop anan
application
applicationforfor
updating
updatingproperty
property details,
details,enable
enableproperty
propertyowners
ownersto to
review
reviewproperty
property details
details
forfor
taxtax
computation,
computation, andand
testtest
thethe
useuse
of of
barcodes
barcodes
forfor
auto-property
auto-property surveys.
surveys.
It is
It estimated
is estimatedthat
that
thethe
innovation
innovationwill
will
increase
increase
thethe
current
current
taxtax
yield
yield
of of
PKR 1313billion
PKR billion
through
through
increased
increased
efficiency
efficiency
of of
property
property taxtax
management
management structure,
structure,
increased
increasedcoverage,
coverage,andand
reduced
reduced human
humanerror.
error.
TheThe
intervention
intervention
linking
linking
MIS
MISand and
GISGIS
data
data
will
will
make
make it easier
it easier
forfor
thethe
ET&NC
ET&NCDepartment
Department to to
identify
identify
taxable
taxable
properties
propertiesand
and
improve
improve thethe
overall
overall
administration
administrationof of
UIPUIP
Tax.
Tax.
ToTo
achieve
achieve
thethe
DLIs
DLIsunder
underthethe
PRIDE
PRIDEprogramme
programme andand
to to
bring
bring
efficiency
efficiency
in tax
in tax
administration,
administration,GoPb
GoPbwillwill
alsoalso
bebefocusing
focusingonon
thethe
integration
integration
of of
databases
databasesof of
provincial
provincialtaxes
taxes
in in
thethe
coming
coming FY.FY.
Currently,
Currently,
all all
databases
databases areare
operating
operating
in in
silos.
silos.
Integration
Integration of of
taxes
taxes
is expected
is expected to to
increase
increase
compliance
compliancewith
with
thethe
taxpayers
taxpayers andand
prevent
prevent
revenue
revenue
leakages.
leakages.
Finance
FinanceDepartment
Department Punjab
Punjab hashas
gonegonebeyond
beyond meeting
meetingthethe
requirements
requirements of the
of the
PRIDE
PRIDE programme
programme andandhashas
linked
linkedintegration
integration with
with
simplification
simplification
andandharmonization
harmonization of of
taxes
taxeswithin
withinthethe
province
province andand
across
acrossfederating
federatingunits.
units.
Punjab
Punjab is proactively
is proactively engaging
engaging with
withother
otherjurisdictions
jurisdictions to to
setset
thethe
agenda
agenda to to
achieve
achieve thetheoptimum
optimum level
level
of of
harmonization.
harmonization. These
These efforts
efforts
arearehelping
helping a great
a greatdeal
dealin innarrowing
narrowing downdown thetheformformandanddegree
degree of of
harmonization
harmonization ononthethe
various
various dimension
dimension of taxation
of taxationacross
across
jurisdictions.
jurisdictions.
Punjab
Punjabhashasfinalized
finalized
thethe
proposals
proposals of simplification
of simplification of tax
of tax
regime
regime within
within
thethe
province
provinceto to
facilitate
facilitatethethe
process
process andand bring
bring
uniformity
uniformityacross
acrossprovinces.
provinces. TheThenextnextstep
step
is is
thethe endend
thethefragmentation
fragmentation of of
taxtax
bases
basesandand
differentiated
differentiatedtaxtax
rates.
rates.Currently,
Currently, thetheprovinces,
provinces, including
includingPunjab,
Punjab,areare
levying
levyingandandcollecting
collectingthisthis
taxtax
both
bothononthetheorigin
originandandthethe
destination
destination
basis.
basis.
Moreover,
Moreover, Punjab
Punjab seeks
seeksto to
settle
settle
thethe
definitional
definitionalandand
jurisdictional
jurisdictional
issues
issuesandanddecrease
decrease thethe compliance
compliance costs
coststo to
taxpayers
taxpayers by by
moving
moving
from
frommultiple
multiple
taxtax
returns
returns to to
a single
a single taxtax
return.
return.
Another
Another initiative
initiative worth
worthmentioning
mentioning here
hereis is
e-Pay,
e-Pay,thethe
firstfirst
ever
ever
Government
Government payment
payment aggregator
aggregator which
which waswaslaunched
launched by by
Government
Government of of
Punjab,
Punjab, in in
2019,
2019, forfor
citizen
citizen
facilitation
facilitation
andandease
easeof of
business
business byby
enabling
enablingcitizens
citizens
across
across
Punjab
Punjab to to
paypay
their
their
taxes
taxesusing
usingelectronic
electronic
payment
payment
channels.
channels. It has
It has increased
increased thethe
digital
digital
transactions
transactions of of
OwnOwn Source
SourceRevenue
Revenue drastically
drastically
andand
collected
collected PKRPKR 2525
Billion
Billion
plus
plus
from
from5.95.9
million
million
plus
plus
transactions
transactions till till
May May2021
2021in CFY
in CFYwhile
whilefacilitating
facilitating
4.74.7
million
million beneficiaries
beneficiaries
using
using
thethe
system.
system.A total
A total
of of
9 departments
9 departments andand
2020taxes
taxes
have
havebeen
been
digitized
digitizedwithwith
seamless
seamless andand
convenient
convenient online
online
payment
payment methods.
methods. Moreover,
Moreover, newly
newlyadded
addedlevies,
levies,
interalia, in FY
interalia, in FY2020-21
2020-21 were
were
Vehicle
Vehicle
Fitness
Fitness
Certificate,
Certificate, e-Challan,
e-Challan, e-Auction,
e-Auction, PEPRIS
PEPRIS andand
Workers
Workers Participation
ParticipationFund.
Fund.In In
FYFY2021-22,
2021-22, several
severallevies
leviesareare
being
beingplanned
plannedto to
bebeadded
addedin e-
in e-
PayPayincluding
including Agriculture
Agriculture income
income Tax,
Tax,Domicile
DomicileFees,
Fees,Character
Character Certificate
CertificateFees,
Fees,
Cattle
Cattle
Market
MarketFeesFeesetc.etc.
OnOn thethe
other
other
hand,
hand,Government
Government of of
Page
Page
77 77
the Punjab is also planning to implement disbursement module, on the lines of collection of receipts, in upcoming version of e-Pay which is
expected to help in efficient utilization of Government funds.
Further, in FY2021-22, the Government, through Irrigation Department, is launching e-Abyana pilot in 04 canal divisions, giving an option to
farmers to pay Abyana through electronic payments, paving the way for improved quality of assessments and increased transparency in the
overall process of issuance of bills and payments made by farmers. This system is expected to allow higher visibility of performance of irrigation
revenue staff down to the grass root level combined with the use of satellite based information sources. Moreover, electronic payments will
allow real time re-conciliation of accounts at each Canal Division and lower levels which will lead to improved focus on recovery and enhance
revenue generated through Abyana in the long run.
Considering the income shock and decline in the aggregate domestic demand, the Government decided not to raise tax rates or impose new
taxes. It, however, decided to explore options to raise revenues without any incidence on the taxpayers. The Government intends to use the
“Land Utilization Policy” for efficient and productive use of its assets. This policy envisages disposal of State Land through various modes
including sale and lease using a competitive and transparent process. The purposes may include cultivation, commercial, industrial, and
charitable. The new dispensation is aimed at generating revenue, attracting investment in backward areas, and supporting economic growth.
Pension Reforms
Moreover, the government is also maximizing its existing resources through the identification and implementation of efficiency gains by
reforming the pension system. GoPb is undertaking a review of policy options for the pension system, including the development of a direct
contributory scheme for new hires along with proposing changes to the existing direct benefit scheme. GoPb has recently raised the minimum
voluntary retirement age to 55 years of age or completing a minimum of 25 years of service, whichever is later. Other changes under the direct
benefit scheme that are being considered are indexation of pension to inflation, the merger of ad hoc allowances into the basic pay scale and
reduction in the rate of commutation. GoPb has also launched a proof of life pilot where GoPb in partnership with NADRA that will have an
online and mobile-based application using biometric verification of pensioners for proof of life. The current practice of physical certificates is
susceptible to fraud and manipulation, with the risk that pensions can continue to be claimed for pensioners who may have died. These reforms
are expected to bring in efficiency savings of at least PKR 68 billion over three years.
Conclusion
PFM is an essential part of the development process. A sound PFM system supports aggregate control, prioritization, accountability, and
efficiency in the management of public resources and delivery of services, which are critical to the achievement of public policy objectives.
GoPb is committed to improving governance in Punjab and achieving greater transparency and accountability, the foundation for which is in a
robust PFM system.
Page 78

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Government of the Punjab

June 14, 2021

IFTIKHAR ALI SAHOO

Macroeconomic Review and Estimates of Receipts

Estimates of Expenditures Annual Development Program

Public Account Debt and Contingent

Post COVID-19 Fiscal Public Financial Management

ABS Annual Budget Statement LFY Last Financial Year

1,683.7 bn 132.0 bn 25.0 bn

65.2 bn 272.6 bn 119.4 bn 420.3 bn

PKR 50 bn + PKR 1,427.9 bn

PKR 77.2 bn PKR 540.1 bn

Macroeconomic Review and Outlook

National Macroeconomic Snapshot

Timely and data-driven policies of the government have expedited

Real GDP Inflation

the end of 3QFY2020 exacerbated the situation with lockdowns leading to

Industry 0.1% sudden economic disruption and consequent surge in unemployment.

FY2019 FY2020 FY2021

Agriculture 0.56 3.31 2.77 9.29%

Industrial -1.56 -3.77 3.57 8.34%

Inflation and the cost of living

Foreign Remittances, FDIs and Business Confidence

As remittances rose over the last fiscal year so did Pakistan’s

While FY2021 has witnessed uncertainties due to the pandemic,

Pakistan’s Economic Recovery from COVID-19 and challenges faced

World Bank Report on Covid 19

Punjab’s Contribution to Economic Recovery

% Increase in Production between July-December FY2019-20 and 2020-21 Punjab

Refrigerators / Freezers 57.20%

% Decline in Production between July-December FY2019-20 & 2020-21 Punjab

-70.00% -60.00% -50.00% -40.00% -30.00% -20.00% -10.00% 0.00%

Support Receipt from Federal Government

Future Outlook 2021-22

Target for FY 2022

Punjab’s Tax Relief Package and Departmental Proposals: Key Recommendations

Receipts BE 2020-21 RE 2020-21 BE 2021-22

General Revenue Receipts

FEDERAL DIVISIBLE POOL TAXES

Divisible Pool of Taxes as collected by FBR

Taxes on sales and purchase of goods imported, exported,

Export duties on Cotton

Federal Excise Duties excluding the excise duty on gas

As per NFC Award, the

2016-2017 2017-18 2018-19 2019-20

Punjab’s Estimated Federal Divisible Pool Receipts

PKR 1,432.968 bn +17.5% PKR 1,683.696 bn

PROVINCIAL TAX REVENUE

Sales Tax on Services,

Route Permit Fee

The details of taxes budgeted for FY 2021-22 is presented below:

Punjab Revenue Authority (PRA)

Sales Tax on Services Collection 2020-21 (Total PKR 141.150 bn)

Contractual execution of Telecommunication Withholding Agents

Courier services Rs. 5

Franchise services Rs.

Information Technology Rs. 1.7 Security Agency Rs.

Agricultural Income Tax:

Excise, Taxation & Narcotics Control Department

Civil Administration & Other

Component BE 2020-21 RE 2020-21 BE 2021-22

Federal Grants Foreign Program Grants

Component BE 2020-21 RE 2020-21 BE 2021-22