UP Budget: Chief Minister Yogi Adityanath-led Uttar Pradesh government on Wednesday presented a Rs 9.13 lakh crore Budget for FY 2026-27 in the Assembly, with a strong focus on infrastructure, MSMEs and the textile sector to accelerate economic growth and job creation.
State finance minister Suresh Khanna, tabling the Budget, said the total outlay stands at Rs 9,12,696.35 crore, about 12.2 per cent higher than the previous year. Capital expenditure accounts for 19.5 per cent of the Budget, underscoring the government’s emphasis on asset creation and long-term growth.
Here’s what’s in it for infrastructure, MSME and textile sectors:
Infrastructure and Industrial development
The government proposed Rs 27,103 crore for infrastructure and industrial development schemes, marking a 13 per cent increase over FY 2025-26. The Chief Minister Industrial Area Expansion and New Industrial Area Promotion Scheme received funding of Rs 5,000 crore which aims to expand industrial facilities and attract business investment. The Atal Infrastructure Mission will receive funding of Rs 2,000 crore to support its various projects.
The state government allocated Rs 1,000 crore to fund the Incentive Policy 2023 which aims to attract foreign direct investment and Fortune 500 companies to the country. The Defence Industrial Corridor project has established agreements which cover approximately 200 defence facilities that will receive Rs 35,280 crore in investment and create 53,263 job opportunities.
MSMEs and Entrepreneurship
The MSME sector received a proposed allocation of Rs 3,822 crore, about 19 per cent higher than the previous year. The government said the sector currently provides employment to about 3.11 crore people in the state.
A new scheme titled “Sardar Vallabhbhai Patel Employment and Industrial Zone” has been proposed with an allocation of Rs 575 crore to promote MSME clusters.
The Budget sets aside Rs 1,000 crore for the Chief Minister Young Entrepreneur Development Campaign, which aims to establish one lakh micro enterprises annually. Another Rs 225 crore has been proposed for the Chief Minister Youth Self-Employment Scheme, along with Rs 75 crore for a new initiative called “One District One Dish”.
Textile and Handloom sector
The textile and handloom sector saw one of the sharpest increases, with Rs 5,041 crore proposed, more than five times last year’s allocation. The government has set a target of generating 30,000 jobs in the sector in FY 2026-27.
A major component is Rs 4,423 crore for the Atal Bihari Vajpayee Powerloom Weaver Electricity Flat Rate Scheme to support weavers and reduce operational costs. Another Rs 150 crore has been earmarked for the Uttar Pradesh Textile and Garmenting Policy-2022.
The state is also developing a mega textile park under the PM MITRA scheme to build a large garmenting hub and strengthen the textile value chain.
Broader economic indicators highlighted
The finance minister said Uttar Pradesh’s GSDP is estimated at Rs 30.25 lakh crore in FY 2024-25 (revised), reflecting 13.4 per cent growth year-on-year. Per capita income is projected to rise to Rs 1,20,000 in FY 2025–26 from Rs 54,564 in 2016-17.
He added that about 6 crore people have been lifted out of multidimensional poverty and the unemployment rate has declined to 2.24 per cent. The state also improved its SDG India Index ranking from 29th in 2018–19 to 18th in 2023–24.
