The Punjab government fell short of its revenue target by about 10% in the 2024-25 financial year.
The state government garnered ₹93,236 crore from tax and non-tax revenues as well as grants-in-aid against its revenue receipts budget estimate of ₹103,937 crore for the financial year.
While it achieved 95% of its tax revenue target, which includes goods and services tax, state excise, stamps and registration, sales tax, and state’s share of union taxes, actual receipts from non-tax revenues were only 56% of budget estimates for the fiscal year, according to data on fiscal indicators compiled by the audit and accounts department.
The revenue receipts for the 2024-25 financial year were considerably lower than the state’s expectations, as the finance department had only made minimal changes to the revenue projections when presenting the revised estimates (RE) in the 2025-26 budget documents two months ago. The revenue receipts were kept at ₹1,03,720 crore in the revised estimates for 2024-25.
An official from the taxation department said that revenue receipts estimates were primarily based on past trends in tax and non-tax collections. “The collections from goods and services tax, sales tax, and non-tax revenue did not register the anticipated growth. We will surely look into the reasons for this shortfall,” said the official, who did not wish to be named.
The state government ended the financial year with ₹93,236 crore, a 4.5% increase in revenue collection over the ₹89,190 crore collected in the previous year. At ₹77,047 crore, the tax revenue, though short of the target for the year, was up 14% from the collection in 2023-24.
Revenue from excise duties, stamps and registration fees, and the state’s share of central taxes were higher than the budget estimates presented at the beginning of the financial year. However, collections from the goods and services tax (GST), sales tax, land revenues and other taxes fell short of the 2024-25 budget estimates.
The ₹23,559 crore GST mop-up, the largest contributor to the government’s coffers, was 12.50% more than the ₹20,924 crore collected in 2023-24, though it still fell nearly 5% short of the budget estimates for 2024-25.
There was also a significant gap between the budget estimates and the actual collection of land revenue and sales tax. An even greater concern for the state authorities was the non-tax revenue of ₹6,273 crore, which amounted to just 56% of the budgeted ₹11,246 crore.
A finance department official said they were exploring the possibility of revising user fees to increase non-tax income. Recently, the finance department also directed all departments to work for ‘revenue maximisation’ by setting monthly and quarterly revenue targets for both tax and non-tax revenues.
“These targets must be monitored at every level — division, district, and sub-division — and reviewed monthly by administrative secretaries. The performance of each department will be assessed on a quarterly basis at the highest level,” read the guidelines issued by the finance department on the management of state finances.
It further stated that any administrative department that fails to achieve its budgeted revenue targets for the 2025-26 financial year, without reasonable justification, may face an automatic reduction in its budgetary allocations for expenditure. The departments have also been warned of disciplinary action against erring officials if any revenue from the tax, user charges, fees and cess is retained in the department’s accounts and not credited to the consolidated fund of the state.
The instructions for maximisation of revenue were sent to all administrative secretaries and heads of departments just days after finance minister Harpal Singh Cheema presented a ₹2.36-lakh crore budget for the 2025-26 financial year. The state government has projected tax revenue of ₹88,953 crore and non-tax revenue of ₹12,210 crore for the current financial year.
