Chandigarh: Punjab’s economy is expected to grow at a slower pace in 2025–26, continuing a trend of moderate expansion seen in recent years and remaining below the national growth rate, according to the Economic Survey of Punjab 2025–26 that was tabled in the state assembly on Sunday.The survey notes that the state’s economic growth is gradually moderating. Advance estimates of gross state domestic product (GSDP) show that Punjab’s economy, which grew by 6.3% in 2024–25 (quick estimates), is projected to expand by 6.1% in 2025–26 (advance estimates).The moderation is largely attributed to slower growth in key sectors such as agriculture and allied activities, as well as parts of the industrial sector, even though the services sector continues to remain the main driver of economic expansion. Despite this, the survey pointed to a stable growth trajectory.The survey also highlights that the Punjab’s growth rate has remained below the national average since 2013–14. Quick estimates show Punjab’s GSDP growth stood at 6.3% in 2024-25, compared with 6.5% at the national level. Advance estimates indicate that India’s GDP is expected to grow by 7.4% in 2025–26, significantly higher than Punjab’s projected 6.1% growth. A similar trend is reflected in gross state value added (GSVA) estimates. Punjab’s real GSVA growth for 2025–26 is projected at 5.6%, compared to 7.3% growth in gross value added (GVA) at the all-India level.SERVICES MAIN DRIVERThe services sector continues to contribute the largest share to Punjab’s economy, in line with national trends. From 2012-13 to 2022-23, services accounted for an average annual share of about 46% of the state’s GSVA. With rising per-capita incomes and greater spending power, demand for services increased. Advance estimates suggest the share of services sector in GSVA to rise to 48.5% in 2025-26, compared to 47.5% in 2024–25 (quick estimates).AGRI KEY PILLARUnlike the national economy, agriculture and allied activities continue to hold a significant share in Punjab’s economy. The sector is expected to contribute to 22.8% of GSVA in 2025–26. Since the Green Revolution of 1960s and 1970s, along with widespread mechanisation, Punjab emerged as one of the country’s leading agricultural states. The sector continues to play a crucial role in supporting other segments like industry and services.INDUSTRY’S CONTRIBUTIONThe industrial sector is expected to account for 29% of GSVA in 2025-26. Manufacturing alone contributed to 17% of the total GSVA and recorded an average growth of 5.5% between 2012-13 and 2022-23. Manufacturing remains the largest contributor to GSVA growth within the industrial sector and one of the most important subsectors overall.Punjab’s focus on agriculture also supported the development of ancillary industries such as food processing and textiles. In 2025–26, the industry is projected to grow 6.3%, while the services sector is expected to expand by 8.4%. Within the industrial sector, mining is estimated to grow by 1.9%, manufacturing by 7.3%, and construction by 5.9%. Electricity, gas and utilities sector is projected to grow by 3% during the year.FLUCTUATING INFLATION TRENDSThe survey highlights fluctuating inflation trends in Punjab during 2025–26. Inflation rose to 4.1% in April 2025 and increased further to 5.2% in May 2025, before gradually declining to 1.8% by December 2025. During most of the period from April to December 2025, inflation in the state followed a declining trend. However, inflation at the national level remained lower than Punjab’s inflation during this period.Food prices also showed mixed trends. Between 2022–23 and 2024–25, food inflation rose both in Punjab and across India. In 2025–26, food inflation reached 3.95% in May 2025, before dropping to 2.58% in June and 0.83% in July. After a slight rise to 1.03% in August, food inflation fell to -2.28% by Dec 2025. The fall was largely driven by lower prices of vegetables, fruits, pulses, processed food, sugar and confectionery items.In Dec 2025, inflation rates for cereals and products, oils and fats, fruits, vegetables and pulses stood at 2.12%, 6.05%, -1.7%, -24.36%, and -7.85%, respectively. These levels were significantly lower than those recorded in Dec 2024, when the corresponding rates were 7.56%, 12.04%, 2.96%, 29.02% and 7.45%. The survey also notes that rural inflation in Punjab remained higher than urban inflation during the financial years 2024–25 and 2025–26 (up to Dec 2025).DISPARITIES IN PER CAPITA INCOMEThe survey points to significant intra-state disparities in per capita income across districts. Ropar, Mohali and Ludhiana remained the leading districts in terms of per-capita income since 2015–16. Ropar recorded a per-capita income of Rs 2,54,748, followed by Mohali at Rs 2,23,709 and Ludhiana at Rs 2,13,718. While Ropar’s economy is largely agrarian, with 29% of its gross district value added (GDVA) coming from agriculture and allied activities, Mohali and Ludhiana are driven by manufacturing, which contributed 30% and 31%, respectively, to their GDVA in 2022–23. On the other hand, Gurdaspur and Tarn Taran recorded the lowest per-capita incomes in the state, with economic activity in these districts affected by restrictions on economic activity and border-related tensions, the survey noted.FOR GRAPHICGDP OF STATE, NATIONYEAR | PUNJAB | INDIA2021–22 | 7.4% | 9.7%2022–23 | 6.6% | 7.6%2023–24 | 6.8% | 9.2%2024–25 | 6.3% | 6.5%2025–26 | 6.1% | 7.4%
