The interior minister expressed concerns last month that there was a conspiracy to impede the ruling PML-N party in the upcoming election.
Hospital's administration stated that two surgeries were performed on Ahsan Iqbal's arm.
The 59-year-old Iqbal is a US -educated politician long associated with the party Sharif previously led, the Pakistan Muslim League-Nawaz (PML-N).
However, the bullet that entered Iqbal's abdomen was not removed as pulling it out could have proved to be risky, as per the doctors.
Police are still investigating the attack, but local deputy commissioner Ali Anan Qamar told AFP that the shooter said he was inspired by a controversy previous year in which a small amendment to the oath that election candidates must swear had to be hastily reversed after it was linked to blasphemy.
Reports say the gunman was wrestled to the ground by police and bystanders as he was preparing to fire a second shot.
"The suspect belongs to a religious family and a worker of the TLYP", he said.
The former Prime Minister Nawaz Sharif on Monday said the assassination attempt on the Interior Minister Ahsan Iqbal was not a minor incident, adding such incidents would continue to occur if Rs 1000 was distributed among extremists.
According to the police, a suspect has been taken into custody from the spot, who confessed to firing gunshot on the minister over the Khatm-i-Nabuwat issue.
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Senators Rehman Malik and Muhammad Javed Abbasi vehemently condemned the attack and called for national unity against terrorism.
Iqbal's son confirmed that his father is out of danger.
The attack was swiftly condemned by the global community as Pakistanis voiced fears it represented an attempt to weaken democracy ahead of the federal elections.
Punjab Chief Minister Shahbaz Sharif described the incident as an "assassination attempt".
Iqbal is also a leader of the Pakistan Muslim League (Nawaz).
The assailant-later identified as Abid Hussai-was nabbed by law enforcement agencies and was shifted to local police station for further interrogation. However the man who hurled the shoe was arrested and later freed after Iqbal pardoned him.
Police said Hussain had made a confessional statement saying "he acted alone because his religious sentiments were hurt by the PML-N governments decision".
Their attackers were also members of the TLYP who alleged that the PML-N leadership had committed blasphemy by changing the constitutional clause which had provoked the attacks.