Established in 1882 under the aegis of the Lahore Singh Sabha. In pursuance of the policy set forth in the famous Wood's Dispatch of 1853 (a letter from Sir Charles Wood, President of the Board of Control of the East India Company) high schools in some district and tahsil towns and primary schools in some villages were opened in the Punjab and a system of grants-in-aid for privately-run schools was introduced. The medium of instruction in village schools opened by the British was Urdu, and the syllabi were drawn up on secular basis. This meant a setback to indigenous education in Punjabi, traditionally carried out in gurdwaras, derads and dharamsalas. As G.W. Leitner, History of Indigenous Education in the Punjab, 1883, states on the basis of a survey of some districts carried out by Bhai Gurmukh Singh, "...it is clear that by the establishment of Government village and town schools and the procedure adopted by them, a death blow has been dealt to the indigenous Gurmukhi [Punjabi] and Nagari [Hindi] schools. A solicitude for obtaining employment for their children induced the parents of many pupils attending the indigenous schools to withdraw them from those institutions of combined religious and secular education and to send them to the purely secular schools established by Government... He [Bhai Gurmukh Singh] further shews that the disparity between the number of the Gurmukhi-knowing people of the old school and that of the same class in the present time is out of all proportion, the former being many times more than the latter."

Under the new regime, Punjabi received little official patronage. The Anjuman-iPanjab, a literary association formed in 1865, had a Punjabi section for which Lala Bihari Lal Puri, Rai Mul Singh and Bhai Harbhagat Singh translated a few English books into Punjabi. In 1873, some leading Sikhs of the day set up in Amritsar a society called Sri Guru Singh Sabha. Its primary aims were the reform and propogation of the Sikh faith and the promotion of Punjabi language. Bhai Gurmukh Singh (1849-98), then a student at the Government College at Lahore, left off his studies to work for the new movement. He was instrumental in having Punjabi included, in 1877, in the curriculum at the Oriental College, Lahore, where he himself was appointed the first lecturer to teach the language. The Singh Sabha, Lahore, established in 1879 with Bhai Gurmukh Singh as its secretary, set up the Panjabi Pracharni Sabha in 1882 with the object of popularizing and promoting Punjabi. It had Sardar Attar Singh of Bhadaur as its patron and Rao Nihal Singh as its president. Prominent among the members were Bhai Gurmukh Singh, Sodhi Hukam Singh, Lala Nanak Bakhsh, Bhai Ratan Singh and Bhai Aya Singh. A highlight of the Sabha's short career was the presentation in May 1882 of a memorandum signed by 50,000 persons supporting Punjabi to the Hunter Commission, appointed to assess the working of the educational system introduced in response to Wood's Dispatch, and to suggest measures for its improvement. The memorandum of the Panjabi Pracharni Sabha contained two main demands: (1) that Punjabi should be the official language for all government business in the Punjab, and (2) that it should be introduced as medium of instruction in government and government-aided schools. The Sabha lapsed upon the establishment in 1886 of the Khalsa Diwan Lahore whose educational branch under Lala Bihari Lal assumed its duties and functions.