Punjab’s Hopes High From Union Budget 2025-26, Check Expectations

As Union Finance Minister Nirmala Sitharaman prepares to present the Budget for 2025-26 on February 1, Punjab’s government, industrialists, and farmers are looking forward to crucial financial relief and policy support. With the state’s economy struggling and industrial competitiveness hampered by geographical disadvantages, stakeholders are hopeful that the Union Budget will introduce measures to revive Punjab’s economic landscape.

Industrial Investment Needed for Growth

Punjab’s industrial sector has been at a disadvantage compared to states closer to ports, making it harder for businesses to compete. The absence of major public sector investments since the Bathinda refinery’s operationalization in 2012 has further slowed industrial growth. Business leaders are hoping for big-ticket investments that could trigger a chain reaction, leading to the establishment of ancillary units and creating new job opportunities.

The state’s unemployment rate of 7.7%—higher than the national average—has led to an increasing migration of youth abroad and to metro cities. Industrial investment is seen as a key solution to retain talent, boost state revenues through direct and indirect taxes, and stabilize Punjab’s demographic trends.

Farmers Seek MSP Guarantee and Diversification Support

Punjab’s farmers, who have long relied on wheat and paddy cultivation, are eager for substantial budgetary provisions to aid in crop diversification. Previous state-led efforts to move away from the wheat-paddy cycle have largely failed, leaving the agricultural sector stagnant. With farmer unions once again voicing their demands, there is growing anticipation that the Centre may introduce policies, including a legal guarantee of Minimum Support Price (MSP) for all crops—a long-standing demand of the farming community.

Political Tensions and Fund Allocation Concerns

Despite political differences between the AAP-led Punjab government and the BJP-led Centre, stakeholders are hoping that the Budget will focus on economic revival rather than political divides. The state has often cited challenges in receiving central funds, but expectations remain high for financial allocations that could bridge Punjab’s economic gaps.

As Punjab grapples with economic distress, the upcoming Budget is seen as a crucial opportunity to bring financial relief, industrial incentives, and agricultural reforms, shaping the state's future trajectory.