Agriculture continues to be the backbone of Punjab's economy, even as the services sector expands and new opportunities emerge in industries such as information technology (IT), tourism and agro-processing, according to the Punjab Economic Survey 2025-26 released after the state Budget presentation on Sunday.
The survey states that Punjab continues to play a crucial role in India's food security. In 2024-25, the state produced about 15.18 per cent of the country's wheat and 9.57 per cent rice despite having a relatively smaller share of the total cultivated area.
The state also dominates procurement for the central foodgrain pool. Up to December 2025, the state contributed 31.42 per cent of rice and nearly 39.68 per cent of wheat to the central pool.
The agriculture and allied sectors account for 22.77 per cent of Punjab's Gross State Value Added (GSVA) in 2025-26. However, growth in the sector is expected to be slow. While it grew by 3.49 per cent in 2024-25, it is projected to contract by 2.49 per cent in 2025-26, largely due to a decline in the crop subsector.
The livestock sector's share in agricultural GSVA has risen steadily, reflecting diversification in farming. Punjab accounts for about 8.08 per cent of the country's registered food-processing factories, ranking fourth nationally.
The services sector has emerged as the largest employer in the state. According to the Periodic Labour Force Survey 2023-24, it employs around 41 per cent of Punjab's workforce, higher than the national average of about 30 per cent.
Trade, repair services, hotels and restaurants account for the largest share of employment within the sector, followed by education, health and other services.
Punjab currently has around 740 registered IT units, while exports from the Mohali-Chandigarh IT hub have grown by nearly 14 per cent over the past five years.
Tourism has also expanded steadily. Tourist inflow to the state grew at an average annual rate of 19 per cent between 2010 and 2024. In 2024, Punjab received about 2.77 crore domestic tourists and 5.4 lakh foreign visitors, ranking 10th in the country in foreign tourist arrivals.
The survey also notes demographic shifts, with the share of the working-age population rising to 72.6 per cent in 2023.
It emphasises that generating employment, diversifying agriculture, strengthening allied sectors and promoting industries such as IT and tourism will be crucial for sustaining Punjab's economic growth.
Economy snapshot
Agriculture still contributes over 22% to Punjab's economy, but growth is projected to contract this year
Services sector employs 41% workforce, well above national average of about 30%