From roads to robotics: UP’s record ₹9.13-lakh crore Budget signals growth push - Here’s a complete outlook
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The Uttar Pradesh government on Wednesday presented its largest-ever state Budget, pegging the outlay at ₹9.13 lakh crore for the financial year 2026–27, a 12–13% increase over the previous year’s allocation. The fiscal deficit has been capped at 3% of the Gross State Domestic Product (GSDP), in line with the recommendations of the 16th Finance Commission.
Presenting the Budget, Finance Minister Suresh Khanna said the state’s per capita income is projected to reach ₹1,20,000 in 2025–26. He added that nearly 6 crore people have moved out of multidimensional poverty in Uttar Pradesh and that the unemployment rate has declined to 2.24%.
Strong push for capital expenditure in Budget
The Budget, presented a year ahead of the 2027 Assembly elections, strikes a balance with a sharp push towards capital expenditure. Of the total outlay, ₹1.78 lakh crore has been earmarked for capital expenditure, accounting for about 19.5% of the Budget and marking a 7.78% increase over last year’s allocation of ₹1.65 lakh crore.
“During the previous and present tenure of our government, the state has witnessed all-round development, be it strengthening of law and order, expansion of infrastructure facilities, industrial investment, employment generation, women empowerment, skill development of youth, prosperity of farmers, and poverty alleviation. The GSDP of the state for the year 2024-2025 has been estimated at ₹30.25 lakh crore, which reflects an increase of 13.4% compared to the previous year," Khanna said.
Infra drive gains pace with ₹38,000 cr for PWD
Infrastructure continues to anchor the state’s growth strategy, with more than ₹38,000 crore allocated to the Public Works Department for roads and bridges. The broader infrastructure and industrial development segment have been earmarked ₹27,103 crore.
Urban development has been allotted nearly ₹32,000 crore, underscoring the government’s focus on planned urbanisation and the expansion of tier-II and tier-III cities.
Energy and irrigation get major allocations
The energy sector has been allocated nearly ₹57,000 crore, while irrigation and water resources have received around ₹21,000 crore to strengthen agricultural productivity and ensure reliable support for industry. In addition, ₹500 crore has been set aside for upgrading pilgrimage and tourism infrastructure in Ayodhya, Varanasi, and other key spiritual destinations, as the state looks to further tap its tourism potential.
Unique feature: Push to technology and digital transformation
A significant feature of this year’s Budget is the strong push towards technology and digital transformation. The allocation for the IT and Electronics Department has been increased to over ₹2,000 crore, marking a rise of nearly 76%, signalling an aggressive focus on building a digital economy. Within this, ₹225 crore has been allocated for the Uttar Pradesh AI Mission, which aims to establish AI labs, skill centres and research hubs, alongside strengthening cybersecurity infrastructure through a dedicated operations centre.
Education gets ₹1.18 lakh cr, accounts for 12–13% of Budget
Education continues to drive one of the largest shares of spending. The government has allocated approximately ₹1.08 lakh crore for school education, along with around ₹7,000 crore for higher education and about ₹3,500 crore for technical education. The focus includes setting up new girls’ schools in underserved blocks, upgrading school infrastructure, and expanding digital learning systems to bridge the education gap. Overall, education accounts for 12–13% of the total Budget.
₹50,000 crore push for health & family welfare
In the health sector, the government has earmarked ₹47,000–₹50,000 crore for health and family welfare, supporting the expansion of district hospitals, strengthening medical colleges, and improving maternal and child health services. The state continues to invest in medical infrastructure to improve tertiary healthcare access in semi-urban and rural regions.
Irrigation, dairy, and horticulture get Budget boost
Agriculture and rural development remain politically and economically significant pillars. The Budget provides around ₹45,000 crore for agriculture and allied activities, nearly ₹37,000 crore for rural development, and about ₹12,000 crore for Panchayati Raj institutions. Irrigation projects alone account for around ₹21,000 crore. These allocations are intended to strengthen farm incomes, promote horticulture, dairy and fisheries, and enhance rural infrastructure and housing.
Focused push for UP's MSMEs and traditional industries
The MSME and traditional industries sector has also received focused support. The government has allocated around ₹6,000 crore for MSME and export promotion while ₹5,041 crore has been allocated for textiles and village industries.
The popular ‘One District One Product’ programme continues to receive backing, and ₹75 crore has been allocated for the ‘One District One Cuisine’ initiative, aimed at promoting local food enterprises and boosting employment. The state estimates these measures could support up to 10 lakh job opportunities.
Pension and assistance schemes get continued support
Social welfare spending remains substantial, with nearly ₹55,000 crore allocated to the Social Welfare Department, around ₹4,000 crore for minority welfare, and approximately ₹1,500 crore for divyangjan empowerment. Pension schemes, mass marriage assistance programmes and targeted support for OBCs and Scheduled Castes continue to receive funding, reinforcing the government’s welfare outreach.
Police modernisation and cybercrime units get boost
Law and order, a recurring governance theme in the state, has been allocated over ₹44,000 crore under the Home Department, covering police modernisation, cybercrime units, forensic labs, emergency response systems, and women safety initiatives.
On the revenue side, the state expects improved GST collections, higher excise and stamp duty revenues, and steady central transfers to support its spending plans. No major new taxes were announced, signalling continuity in revenue strategy while relying on economic expansion to improve collections.