Lucknow | Uttar Pradesh, India’s most populous state and an increasingly vital engine of national economic growth, is poised to be a key beneficiary of the Union Budget 2026–27, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, 2026—marking the first-ever full Union Budget to be tabled on a Sunday.
With Chief Minister Yogi Adityanath’s vision of transforming the state into “Uttam Pradesh” (an ideal state), expectations are high for enhanced central assistance to fast-track infrastructure creation, social welfare expansion, healthcare, education, and industrial growth. The timing of the budget is politically significant as it precedes the 2027 Uttar Pradesh Assembly elections, adding weight to development-focused allocations.
Rs 1.30 Lakh Crore Central Assistance Sought
The Uttar Pradesh government has submitted an extensive wishlist to the Centre, seeking approximately Rs 1.30 lakh crore in central support for FY 2026–27. The proposed assistance is aimed at sustaining the state’s aggressive capital expenditure push, which has helped double UP’s Gross State Domestic Product (GSDP) from around Rs 12.89 lakh crore in 2017–18 to projections of Rs 27–30 lakh crore, positioning it among India’s fastest-growing large economies.
Infrastructure and Connectivity at the Core
Infrastructure and connectivity remain the cornerstone of Uttar Pradesh’s demands. The state has sought accelerated funding for expressway projects such as the Ganga Expressway, metro rail expansions in Lucknow, Kanpur, Agra and other cities, new airports, and large-scale urban infrastructure upgrades.
Central support for roads, railways, defence and manufacturing corridors, and electronics clusters is expected to help translate recent investment MoUs worth nearly Rs 3 lakh crore into on-ground execution and employment generation.
Health and Education Expansion
Healthcare and education form another major pillar of the state’s expectations. Uttar Pradesh has sought central backing for establishing an AIIMS in western Uttar Pradesh, setting up an IIT in Bundelkhand, and upgrading existing medical and technical institutions.
The state has also demanded funds for expanding PM Shri schools, with a proposal of Rs 855 crore for infrastructure and quality improvements. Healthcare priorities include scaling up Ayushman Bharat, free treatment schemes, and preventive healthcare initiatives to cater to the state’s vast population.
Agriculture, Water, and Renewable Energy
Allocations for irrigation, water conservation, and renewable energy are high on the agenda, including extensions of the Namami Gange programme. Farmers are expecting increased support for crop diversification, animal husbandry, fisheries, cold storage, and post-harvest infrastructure, aligned with national priorities such as micro-warehouses and agri-logistics.
Urban Development and Social Welfare
Urban infrastructure, affordable housing under Pradhan Mantri Awas Yojana (PMAY), and social security schemes targeting women, labourers, and marginalized communities are also key demands. The state has highlighted the potential of medical tourism, leveraging premier institutions such as SGPGI, Lucknow, along with religious and cultural tourism as employment drivers.
Revenue and Fiscal Concerns Raised
Uttar Pradesh has flagged concerns over a decline in its share of central taxes, which has fallen from 19.67 per cent to around 17.93 per cent, resulting in revenue losses. The state has sought a “fair and just” allocation, noting its contribution to national priorities such as large-scale afforestation despite limited forest cover.
Timely GST compensation, smoother fund releases for centrally sponsored schemes, and reforms to ease fiscal pressure have also been raised with the Centre.
Leadership Speaks
State Finance Minister Suresh Khanna said the government has placed its expectations clearly before the Centre.
“To make Uttar Pradesh ‘Uttam Pradesh’, we placed our suggestions before the Union finance minister. The Centre has supported us in the past, and we expect that support to continue,” he said.
Chief Minister Yogi Adityanath, during a high-level review meeting on January 24, 2026, underscored the welfare-first approach in budget planning.
“Bringing about a positive change in the lives of the poor, farmers, workers, women, youth and deprived sections of society should be the soul of the budget,” he directed officials.
Outlook and Challenges
While the Union Budget is expected to maintain fiscal discipline—keeping the fiscal deficit around 4.3–4.5 per cent of GDP—continued capital expenditure is seen as critical to crowd in private investment amid global uncertainties, including potential US tariff pressures.
For Uttar Pradesh, a supportive Union Budget could unlock large-scale gains in transport, healthcare, education, and industrial growth, reinforcing recent improvements in law and order and investment inflows. However, challenges remain, including managing rising state debt—projected at around 29–30 per cent of GSDP—and ensuring efficient utilisation of funds.
With the Economic Survey due on January 31, 2026, projecting GDP growth of around 7.3–7.4 per cent, stakeholders across Uttar Pradesh are looking to the Union Budget for tangible development outcomes. Final sector-wise allocations will become clearer after the budget presentation, with the state budget—likely in February or March—expected to quickly align with Union provisions for faster implementation.
The coming weeks could prove decisive in shaping Uttar Pradesh’s next phase of growth and its march toward self-reliance and prosperity.
