Context:

On 11 February 2026, The Uttar Pradesh government has presented a record ₹9.12 lakh crore Budget for 2026-27, marking a 12.9% increase over the previous year. Presented by Finance Minister Suresh Khanna in the State Assembly, the budget signals an aggressive push toward infrastructure expansion, employment generation, healthcare strengthening and industrial growth. A major highlight is the strong emphasis on capital expenditure, which has been pegged at 19.5% of the total outlay, indicating the government’s strategy of building long-term productive assets rather than relying solely on revenue spending.

• • The state’s economic indicators show an upward trend. Uttar Pradesh’s Gross State Domestic Product (GSDP) is estimated at ₹30.26 lakh crore for 2024-25, reflecting a 13.4% growth rate. Per capita income is projected to rise to ₹1.2 lakh in 2025-26, while the unemployment rate has declined to 2.24%, according to the Finance Minister. The state government has stressed fiscal prudence by maintaining the fiscal deficit within 3% of GSDP consistent with the recommendations of the 16th Finance Commission while still aiming for high capital expenditure.

Budget Size and Fiscal Framework:

The ₹9.12 lakh crore budget is structured to balance growth investments with social sector commitments.

Key fiscal goals include:

• • Keeping the fiscal deficit at 3% of GSDP.
  • Reducing the debt-to-GSDP ratio to about 23.1% by FY27.

These targets aim to strengthen fiscal discipline while allowing the government to invest in long-term infrastructure and social sectors, a departure from purely populist expenditure toward a more developmental budget.

Strategic Priority Areas

The UP Budget 2026-27 signals a shift toward data-led growth, digital economy initiatives, and structural transformation.

 Infrastructure and Capital Development

The government has earmarked an unusually high portion of the budget for capital expenditure (capex), reflecting its effort to build the physical backbone of the state’s economy. Major allocations include:

• • ₹27,103 crore for infrastructure and industrial development.
  • Significant urban development funding, including ₹26,514 crore for metropolitan infrastructure authorities.
  • Infrastructure projects across major cities like Meerut, Mathura-Vrindavan and Kanpur with dedicated funding.
  • ₹100 crore for Ayodhya’s comprehensive development.

These investments aim to improve connectivity, spur investment, enhance logistics and strengthen economic corridors — crucial for attracting both domestic and foreign investment.

Agriculture and Rural Development

Agriculture remains a key pillar:

• • The agriculture allocation saw a 20% growth to ₹10,888 crore.
  • Ambitious production targets were set: 753.55 lakh metric tonnes for foodgrains and 48.18 lakh metric tonnes for oilseeds.
  • Investment in solar pump sets and revolving funds to support Farmer Producer Organizations (FPOs).

This reflects a sustained priority on rural prosperity, food security and resilience against climate variability.

Digital, Tech and Innovation Push

A standout feature of this budget is the significant emphasis on technology:

• • A 76% increase in allocations for IT and electronics to ₹2,059 crore.
  • Launch of the Uttar Pradesh AI Mission with ₹225 crore.
  • Funding for a Cyber Security Operations Centre.
  • Plans to develop eight data centre parks with an estimated 30,000 crore investment, aiming for 900 MW capacity.

These measures are seen as an effort to transform UP into a digital hub, foster AI and cybersecurity capabilities, and generate high-quality jobs.

Social Sector Investments

The 2026-27 budget expands social spending in key areas:

Women and Child Development

The government has allocated ₹18,620 crore for women and child welfare, an increase of about 11%. Key initiatives include:

• • ₹3,500 crore for the Nirashrit Mahila Pension Yojana.
  • ₹400 crore for Mukhyamantri Kanya Sumangala Yojana.
  • Investments in child welfare programs.

Additionally, the budget proposes constructing hostels for working women in municipal corporations to boost safety and mobility for female workers.

Education and Healthcare

Education and healthcare allocations have also increased:

• • Education funding rose by 12.4%, cementing the government’s intent to enhance human capital.
  • A notable allocation of ₹14,997 crore for medical education.
  • Rural healthcare and Ayushman Bharat (state health scheme) received combined funding of ₹10,641 crore.

These investments seek to build better learning outcomes and bolster healthcare access, crucial determinants of long-term demographic dividends.

Youth and Employment Initiatives

Youth, especially in a state with a large working-age population are central to the budget:

• • New job creation schemes targeting over 10 lakh employments were announced.
  • The Swami Vivekanand Youth Empowerment Scheme proposes distributing 40 lakh tablets/smartphones with ₹2,374 crore set aside.
  • Emphasis on skill development and entrepreneurship support.

These measures underline the state’s attempt to reduce unemployment directly and indirectly by improving digital literacy and access.

Targeted Scheme Additions

Beyond broad allocations, the budget introduces several specific schemes:

• • Chief Minister Urban Expansion and New City Promotion Scheme with ₹3,500 crore to fuel urban renewal.
  • New housing initiatives in cities like Meerut, Agra and Lucknow.
  • Smart school upgrades under Samagra Shiksha.
  • Cashless medical coverage for teachers and school staff.

These targeted interventions aim to modernise city infrastructure, enhance educational quality, and strengthen healthcare safety nets.

Regional and Sectorial Insights

The budget also had provisions encouraging traditional sector growth and regional employment:

• • A textile push with a fivefold increase in allocations for textiles.
  • A specialised scheme for “One District One Cuisine” with ₹75 crore to promote culinary tourism and local industry.
  • Plans under the Atal Bihari Powerloom Weavers Flat Rate Electricity Scheme and other gramodyog schemes to create thousands of jobs in rural industries.

The strategy reflects not only modernisation but also preservation and commercialisation of traditional skills and culture.

Urban Development and Tourism

Tourism and urban services received attention as well:

• • Tourist sites such as Sarnath and Hastinapur are slated for infrastructure and connectivity upgrades.
  • Development of night safaris and heritage circuits to promote tourism-led livelihood opportunities.

Combined with improved road and cultural infrastructure, these could elevate Uttar Pradesh’s appeal to both domestic and international visitors.

Key schemes in budget:

Industrial & Enterprise Schemes

Sardar Vallabhbhai Patel Employment and Industrial Zone

·         Launched in Budget 2026–27 to boost employment and industrial growth.

·         Allocation: ₹575 crore.

·         Focus on strengthening MSMEs and promoting district-level industrial hubs.

·         Encourages startups, local entrepreneurship, and private investment.

·         Aims to generate sustainable employment and formalise the workforce.

Bioplastic Industrial Policy – 2024

·         Promotes eco-friendly and biodegradable manufacturing.

·         Supports circular economy and green industrial practices.

·         Encourages investment in sustainable materials and clean technology.

·         Integrated within broader industrial and capital expenditure outlays.

Warehousing and Logistics Policy

·         Strengthens storage, transport, and supply chain infrastructure.

·         Reduces logistics bottlenecks for industry and agriculture.

·         Enhances value chain efficiency and export competitiveness.

·         Integrates rural producers with national and global markets.

Agriculture & Farmers: Growth at the Grassroots

Agriculture Outlay & Farmer Support

·         Key allocations:

o    ₹637.84 crore for solarisation of diesel pumps

o    ₹298 crore for Natural Farming Mission

o    ₹245 crore for Agri-Export Hubs

o    ₹75 crore revolving fund for FPOs

·         Focus on irrigation, infrastructure, sustainability, and export growth.

Chief Minister Farmers’ Prosperity Scheme

·         Strengthens farmer income and rural economy.

·         ₹30 per quintal increase in sugarcane price.

·         Promotes diversification and agro-processing linkages.

·         Enhances rural credit access and financial stability.

Livestock Insurance and Risk Management

·         Protects farmers against livestock losses.

·         Covers disease and climate-related risks.

·         Strengthens animal husbandry sector resilience.

Modernisation of Cooperative Sugar Mills

·         Upgrades sugar mill infrastructure and efficiency.

·         Improves processing quality and productivity.

·         Ensures better returns for sugarcane farmers.

Expanding Finance & Empowering Women-

Women Entrepreneur Credit Card Scheme

·         Provides easy credit access to women-led businesses.

·         Encourages entrepreneurship and self-employment.

·         Promotes financial inclusion and economic independence.

Mission Shakti 5.0 – Women’s Safety & Empowerment

·         Expansion of Safe City projects with CCTV networks.

·         Dedicated women patrol units and improved mobility support.

·         Skill development and vocational training for women.

·         Hostels for working women.

·         Strengthens gender-responsive budgeting framework.

Education & Skills: Building Human Capital

Dream Skill Lab

·         Industry-aligned advanced skill training initiative.

·         Focus on digital skills, emerging technologies, and vocational trades.

·         Enhances employability of youth.

Tech Youth – Empowered Youth Scheme

·         Promotes digital literacy and job-oriented training.

·         Encourages entrepreneurship and startup participation.

·         Bridges gap between education and industry demands.

New Kasturba Gandhi Girls’ Schools

·         Expansion of girls’ education infrastructure.

·         Focus on improving access in rural and underserved areas.

Hostels for Girl Students in Every District

·         Safe accommodation for female students.

·         Reduces dropout rates.

·         Promotes uninterrupted higher education for girls.

Healthcare Infrastructure: Expanding Access & Quality

Four Super Specialty Hospitals (PPP Mode)

·         Establishment under Public-Private Partnership model.

·         Expands access to advanced medical care.

·         Reduces burden on existing government hospitals.

Trauma Centers – Level 2

·         Strengthens emergency and critical care services.

·         Enhances healthcare response in high-need districts.

Hostels in Medical Colleges

·         Infrastructure support for medical students.

·         Encourages female participation in medical education.

·         Long-term investment in healthcare workforce expansion.

IT & Artificial Intelligence: Digital Transformation

IT & Electronics Sector Boost

·         Allocation: ₹2,059 crore (76% increase from previous year).

·         Strengthens digital economy and electronics manufacturing.

Uttar Pradesh AI Mission

·         Allocation: ₹225 crore.

·         Promotes AI adoption in governance, healthcare, and industry.

·         AI labs in educational institutions.

·         Encourages research, innovation, and future-ready workforce.

State Data Center & Data Center Cluster

·         Strengthens secure data storage and e-governance systems.

·         Supports data-driven public service delivery.

·         Encourages private investment in digital infrastructure.

Establishment of U-Hub

·         State-level innovation and startup incubation platform.

·         Supports research, industry partnerships, and entrepreneurship.

·         Strengthens startup ecosystem.

 ‘Green’ & ‘Pink’ Budget: Sustainability and Social Equity

Green Budget Tagging

·         23.5% of total budget allocated to environmentally focused schemes.

·         Aligns with climate goals and sustainable development priorities.

Climate & Renewable Energy Initiatives

·         Plantation drive: 242 crore (2.42 billion) saplings.

·         More than 1 GW solar capacity operational.

·         Promotes clean energy and environmental conservation.

Women’s Empowerment under Pink Budget

·         Integrated gender-focused allocations.

·         Supports safety, education, credit access, and entrepreneurship.

·         Ensures inclusive and equitable development.

Conclusion:

The Uttar Pradesh Budget 2026-27 is more than a routine fiscal statement, it is an economic blueprint aimed at propelling the state into a new growth trajectory. With a historic outlay of over ₹9.12 lakh crore, a strong emphasis on infrastructure, rural development, technology integration and welfare programs, it seeks to catalyse development while laying the foundation for a digitally empowered, economically competitive Uttar Pradesh. Whether the ambitious allocations translate into tangible socio-economic outcomes will largely depend on policy execution, institutional capacity and collaborative governance in the coming years.