Union Budget Puts Uttar Pradesh on Fast Track with High-Speed Rail, CERs and Urban Thrust

The Union Budget 2026–27 has given a significant fiscal boost to Uttar Pradesh, with the state’s overall allocation rising by about ₹34,000 crore to nearly ₹4.26 lakh crore, reinforcing its growth trajectory through investments in urban development, transport infrastructure, and energy transition.

According to budget estimates, Uttar Pradesh’s share in central tax devolution has increased in absolute terms from ₹2.55 lakh crore in 2025–26 to ₹2.68 lakh crore in 2026–27. Allocations under centrally sponsored schemes are also projected to rise sharply, from ₹96,000 crore to around ₹1.10 lakh crore, while finance commission grants are expected to add another ₹20,000 crore.

The Union government has accepted the finance commission’s recommendation to retain the vertical share of tax devolution to states at 41%, with Uttar Pradesh’s share fixed at 17.62%. Officials said the marginal adjustment reflects the state’s improving fiscal position and revenue surplus status rather than any reduction in central support.

Also Read: Black Box from Ajit Pawar Crash Jet Arrives in Delhi for AAIB Probe

A major highlight of the budget for Uttar Pradesh is its focus on regional urban development and the creation of City Economic Regions (CERs). With an indicative allocation of ₹5,000 crore per region over five years, the initiative is expected to benefit several tier-2 and tier-3 cities across the state by improving urban infrastructure, employment opportunities, and economic clustering.

Varanasi, Prime Minister Narendra Modi’s Lok Sabha constituency, has emerged as a key beneficiary. The budget proposes two high-speed rail corridors—Varanasi–Delhi and Varanasi–Siliguri—along with ship manufacturing and repair centers. These projects are expected to significantly enhance connectivity with eastern India and the Northeast, while also boosting local industry and logistics.

Additional provisions such as the construction of girls’ hostels in every district and focused development of temple cities are also set to benefit Uttar Pradesh. Chief Minister Yogi Adityanath welcomed the budget, saying the emphasis on youth-oriented infrastructure and urban facilities would help realize the aspirations of young people across the state.

Uttar Pradesh finance minister Suresh Kumar Khanna said the increase in capital expenditure would accelerate the development of expressways, industrial corridors, logistics hubs, railways, and urban infrastructure, opening new avenues for investment. He added that the state’s slightly lower tax devolution percentage was a reflection of its financial strength, noting that Uttar Pradesh is now revenue-surplus with strong fiscal discipline and a growing GSDP.

The budget’s push for clean energy is also expected to support Uttar Pradesh’s power sector. Proposed customs duty relaxations on cobalt powder, battery scrap, and other critical minerals, along with concessions for renewable energy imports, are likely to boost lithium-ion battery manufacturing and grid-level battery storage. State officials said this would improve power system balancing, making electricity supply more stable, reliable, and cost-effective in the long run.

Also Read: Bajaj Auto Gets Rs 11,500 Target from Bernstein Amid Robust Export and 3W Growth