UP Budget Analysis 2026-27: Key Highlights, Growth Focus, and Fiscal Approach

The Uttar Pradesh Budget for the financial year 2026–27 was presented on 11 February 2026. This is the tenth budget presented under the leadership of Chief Minister Yogi Adityanath. The theme of this year’s budget is “Navnirman”, which reflects nine years of development and policy continuity in the state.

This budget has drawn attention because it focuses on development and long-term growth. It does not rely on short-term policy measures. This approach becomes important when the state is preparing for future economic goals and structural reforms.

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Economic Growth and Budget Size

Uttar Pradesh has seen rapid economic growth over the last eight years. When the current government started, the state GDP was around ₹8.5 lakh crore. By 2026, it will have reached approximately ₹30.25 lakh crore.

The state aims to become a $1 trillion economy by 2030. To reach this goal, experts say the state needs an annual growth rate of 24%. Currently, the economy is growing at about 13.4%.

Key Financial Figures:

• Total Budget Size: ₹9.12 lakh crore (a record high).

• Per Capita Income: Increased from ₹50,000 to over ₹1,10,000.

• Capital Expenditure: ₹1.78 lakh crore (about 20% of the total budget).

• Fiscal Deficit: Maintained at 2.98%, which is within the 3% limit.

• Debt-to-GDP Ratio: Reduced to about 23.1%

Budget Size and Focus on Capital Expenditure (Capex)

Capital expenditure continues to be a significant component of the 2026–27 financial roadmap. Allocations under this segment are directed towards creating assets that are expected to support economic activity over an extended period.

The 2026–27 budget places considerable importance on capital investment to facilitate infrastructure development and long-term asset creation.

• Total Budget Outlay: Over ₹9.91 lakh crore

• Capital Expenditure Allocation: ₹1.78 lakh crore

Capital expenditure, also referred to as पूंजीगत व्यय (Punjigat Vyay), includes investments in sectors such as transportation, connectivity, and logistics infrastructure. These investments are generally associated with outcomes that unfold over several decades.

Infrastructure initiatives such as the Yamuna Expressway and Agra-Lucknow Expressway serve as examples of how capital investments can contribute to sustained regional connectivity and economic activity over time.

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The Aspirational Goal: A $1 Trillion Economy

Uttar Pradesh aims to become a $1 Trillion economy by the year 2029-30.

• Requirement: Achieving this target necessitates tripling the state's current GSDP to approximately ₹92 lakh crore.

• Expert Analysis: This goal is considered highly ambitious, requiring a sustained annual GSDP growth rate of 24.3%.

• Project Delays Example: The Jewar Airport, planned for completion in 2024, received an additional ₹750 crore in this budget for runway expansion, highlighting implementation challenges.

Fiscal Position and Macroeconomic Outlook

UP's fiscal health shows adherence to established financial principles.

Fiscal Deficit Management:

• The 16th Finance Commission recommends a state's annual fiscal deficit should not exceed 3% of its GSDP, aligning with the Fiscal Responsibility and Budget Management (FRBM) Act, 2003.

• UP's projected fiscal deficit for 2026-27 remains under this 3% threshold, unlike the central government's higher 4.4% deficit.

Debt to GSDP Ratio:

• The state's total accumulated debt is approximately ₹7 lakh crore.

• Compared to its ₹30 lakh crore GSDP, the debt-to-GSDP ratio is a manageable 23-24%, indicating a healthy fiscal position.

Fiscal Consolidation: This describes the government's strategy of rational and targeted spending, avoiding populist measures.

Revenue Expenditure: This constitutes the majority of spending (₹5.83 lakh crore), covering administrative costs, salaries, pensions, subsidies, and interest payments.

Sectoral Allocations and Key Schemes

Sector-specific allocations aim to address developmental needs across infrastructure, education, agriculture, and social welfare. These provisions are intended to facilitate inclusive growth while strengthening economic resilience.

Infrastructure Development

Infrastructure expansion continues to receive focused attention through corridor development and airport capacity enhancement. Such investments are aligned to improve statewide connectivity and support regional economic integration.

• Purvanchal Corridor: ₹34,000 crore is allocated for a new high-speed corridor connecting Gorakhpur (Eastern UP) with Saharanpur (Western UP), enhancing statewide connectivity.

• Jewar International Airport: Funding aims to expand runways from two to five for international flight operations.

• Expressway Integration: Efforts to promote regional integration and develop backward areas through the Ganga and Bundelkhand Expressways continue.

Education and Youth Empowerment

The budget outlines several initiatives aimed at strengthening digital access, skill development, and higher education infrastructure for young learners. These measures are intended to improve access to academic and professional opportunities.

• Swami Vivekananda Youth Empowerment Scheme: Funds are allocated to distribute 50 lakh tablets and smartphones for skill development and digital access.

• Mukhyamantri Yuva Udyami Yojana: A new scheme offering interest-free loans up to ₹5 lakh to encourage youth entrepreneurship.

• Higher Education: Plans include establishing three new state universities and 16 new medical colleges, aiming for one medical college in every district.

Agriculture and Farmer Welfare

Agricultural support measures form an important part of the financial plan, particularly in ensuring stable income opportunities for cultivators. Pricing support mechanisms are also included to enhance farm sector sustainability.

• Sugarcane Pricing: The price of sugarcane increased by ₹30 per quintal, projected to add ₹3,000 crore to farmers' incomes.

• Pricing Mechanism:

• FRP (Fair and Remunerative Price): The base price set by the central government's CCEA.

• SAP (State Administered Price): A higher price that state governments can declare above FRP, paid by sugar mills.

Women Welfare and Social Security

Provisions aimed at improving financial support and safety measures for women have been incorporated. These initiatives seek to improve mobility, access to resources, and social protection.

• Kanya Sumangala Yojana: Financial assistance increased significantly from ₹25,000 to ₹1 lakh.

• Safe City Project: Focus on enhancing women's safety through expanded CCTV coverage and Anti-Romeo Squads.

• Scooter Scheme: ₹400 crore allocated to provide scooters to female students for improved mobility.

• Minority Welfare: ₹150 crore allocated for funding marriages of girls from poor families.

Industrial Growth, Technology, and MSMEs

Industrial development and employment generation remain among the priorities under the current fiscal plan. Emphasis is placed on encouraging enterprise activity and strengthening production ecosystems.

• Manufacturing Hub: UP manufactures 65% of India's mobile phones and 55% of its electronic components.

• UP Rozgar Yojana: Aims to generate over 10 lakh jobs for youth within one year.

• Sardar Vallabhbhai Patel Employment and Industrial Scheme: A new initiative to promote MSMEs.

• One District One Cuisine: A new program similar to "One District One Product." For instance, ₹65 crore is allocated to develop Gorakhpur's Khajani as a production hub.

Health and Medical Education

Healthcare infrastructure continues to receive budgetary support, with emphasis on maternal care and insurance-based health protection. Allocations also support the expansion of medical education institutions.

• Maternal Health: Introduction of cashless delivery services in hospitals.

• Ayushman Bharat Jan Arogya Yojana: ₹4,000 crore allocated for this scheme, providing a ₹5 lakh health insurance cover to beneficiaries identified from the Socio-Economic Caste Census (SECC) 2011.

• Medical Education: ₹1,000 crore allocated for establishing 14 new medical colleges under a Public-Private Partnership (PPP) model.

• AYUSH Sector: ₹2,868 crore allocated to develop 3,900 Ayurvedic and Homoeopathic hospitals.

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