In the last full-fledged Budget of the Yogi Adityanath-led government before Uttar Pradesh goes to elections next year, the focus has largely been on infrastructure expansion and employment generation, to not only boost the economy but also woo the youth population of the state.
“Budget 2026-27 reflects the government’s vision in which development, financial discipline and future preparedness have been given equal importance,” Khanna told the House, while presenting the budget.
“We inherited an economy with a debt-to-GSDP ratio of 29.3 per cent in 2016-17, which our government reduced to 27.9 per cent by 2019-20. However, due to the unprecedented economic impact of the Covid-19 pandemic, this ratio increased to 33.4 per cent in 2021-22…. I am pleased to inform this House that, as a result of well-planned fiscal management, the debt-to-GSDP ratio has been brought down again to below 27 per cent in 2024-25 and is targeted to be further reduced to 23.1 per cent in the next financial year 2026-27,” Khanna said, adding “the government is determined to gradually bring it down to below 20 per cent for ensuring the state’s long-term financial stability and sustainable development”.
He also said the fiscal deficit for 2026–27 was estimated at Rs 1.18 lakh crore, or 2.98 per cent of the Gross State Domestic Product (GSDP), within the FRBM-prescribed limit of 3 per cent.
“The fiscal deficit has been kept within the prescribed limit, underlining the government’s commitment to financial prudence,” he said, adding that revenue savings are projected at Rs 64,457 crore.
A major chunk of the budgetary outlay – Rs 1.78 lakh crore or almost 19.5 per cent of the total Rs 9.12 lakh crore, has been set aside for capital expenditure (capex), signifying the government’s push for infrastructure growth.
Story continues below this ad
“The increased capital investment would accelerate infrastructure creation and economic activity,” Khanna said, adding that social sectors too have been given priority, with 12.4 per cent of the Budget allocated to education, 6 per cent to health and medical services and 9 per cent to agriculture and allied sectors.
“The government considers human resource development and enhancement of farmers’ income as central to its development strategy,” he added.
To promote employment generation for youths, the Budget has placed a significant emphasis on industrial expansion, emerging technologies, skill development and entrepreneurship, signalling a shift towards job-oriented growth.
A major allocation of Rs 550 crore has been made for the establishment of Sardar Vallabhbhai Patel Employment and Industrial Zones across districts, aimed at creating local employment opportunities and promoting investment. An additional Rs 25 crore has been provided for initial implementation of the scheme.
Story continues below this ad
To boost local enterprise and market linkages, Rs 75 crore has been earmarked for “One District, One Cuisine” scheme, where the government would also help in branding.
The government has also proposed Rs 30 crore for setting up a state-level U-Hub in Lucknow and Gautam Buddha Nagar to strengthen the startup ecosystem and encourage youth-led entrepreneurship.
The Budget also reflects a strong focus on the digital economy and future technologies as key employment drivers. A provision of Rs 225 crore has been made for the Uttar Pradesh AI Mission (UP-AIM), while Rs 100 crore has been allocated for the development of a Data Centre Cluster and Rs 10 crore for establishing a State Data Centre Authority.
At a post-Budget press meet, Chief Minister Yogi Adityanath said the budget reflected the sentiments and aspirations of the people and noted that the size of the state budget has more than tripled during the nine-year period. “Uttar Pradesh has successfully transformed its perception over the past nine years, emerging from policy paralysis and changing perceptions to present UP as a land of unlimited potential,” the chief minister said.
Story continues below this ad
Samajwadi Party president Akhilesh Yadav, however, said it was a “farewell budget” of the Yogi Adityanath government, asserting that the ruling BJP will exit office after the 2027 Assembly elections. The former chief minister said the budget was big only in size and was not pro-people.
“The government says its budget has crossed Rs 9 lakh crore and claims it as an achievement. It is generally accepted that every budget is bigger than the previous one. The real question is how much of it is actually spent,” he said.
Yadav alleged that on an average, the government has failed to utilise even 50 per cent of its allocations.
“If the outlay is so large, why is the government unable to spend it? This shows a failure of governance,” he said.
