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The Uttar Pradesh government has increased spending on infrastructure, industry and textiles in its 2026-27 Budget, with INR 27,103 crore proposed for infrastructure and industrial development and over INR 5,041 crore for handloom and textiles. The Budget focuses on MSME growth, youth entrepreneurship, investment attraction and job creation. Key allocations include funding for industrial area expansion, defence manufacturing, textile schemes and rural industries. The government expects the measures to support manufacturing expansion, employment generation and regional economic activity across the state.
The Uttar Pradesh government has proposed a higher allocation for infrastructure and industrial development in the 2026-27 Budget, signalling a continued focus on manufacturing, MSMEs and job creation. The outlay for infrastructure and industry has been set at INR 27,103 crore, about 13 per cent higher than the previous year. Spending on handloom and textiles has been raised sharply to over INR 5,041 crore, marking a more than five-fold increase. Advertisement
The Budget, presented in the Assembly in the past week, is being viewed as the final full budget of the current administration before the next Assembly elections. According to the government, the allocations are aimed at accelerating industrial expansion, strengthening small businesses and supporting employment generation across sectors.
A provision of INR 5,000 crore has been proposed for the Chief Minister Industrial Area Expansion and New Industrial Area Promotion Scheme. The Swami Vivekananda Yuva Sashaktikaran Yojana has been allotted INR 2,374 crore for the distribution of tablets and smartphones, while INR 2,000 crore has been earmarked under the Atal Infrastructure Mission to support urban and regional infrastructure works.
The state has also set aside INR 1,000 crore to implement its 2023 incentive policy designed to attract foreign direct investment and global corporations, including Fortune 500 companies. The government said memorandums of understanding have already been signed to set up 200 defence manufacturing units under the Defence Industrial Corridor, involving proposed investments of INR 35,280 crore and estimated direct employment for 53,263 people.
For the MSME sector, an allocation of INR 3,822 crore has been proposed, representing a 19 per cent increase over 2025-26. A new Sardar Vallabhbhai Patel Employment and Industrial Zone scheme has been introduced with an outlay of INR 575 crore. In addition, INR 1,000 crore has been earmarked for the Mukhyamantri Yuva Udyami Vikas Abhiyan, which targets the creation of one lakh micro enterprises every year, while INR 225 crore has been proposed for the Mukhyamantri Yuva Swarozgar Yojana.
The Budget has also proposed a new One District One Cuisine scheme with an allocation of INR 75 crore, aimed at promoting local food-based enterprises. In the textiles sector, the government has set a target of generating 30,000 jobs during 2026-27.
Specific allocations include INR 4,423 crore under the Atal Bihari Vajpayee Powerloom Weavers Flat Rate Electricity Scheme and INR 150 crore under the UP Textile and Garmenting Policy-2022. A mega textile park is under development in the state under the PM MITRA scheme, which is intended to function as a large garment manufacturing hub.
Under khadi and village industries, the Mukhyamantri Gramodyog Rozgar Yojana aims to establish 800 units through INR 40 crore in bank loans, with an employment potential of 16,000 people. An allocation of INR 10 crore has been proposed as interest subsidy under the Pt Deendayal Gramodyog Rozgar Yojana. Additional provisions include INR 7.5 crore for the modernisation of the blanket production centre in Khajni, Gorakhpur, and INR 13 crore for the integrated development of traditional potters through the UP Mati Kala Board.
Source PTI
FAQ
Q1. What are the key priorities of Uttar Pradesh's 2026-27 Budget?
The Uttar Pradesh Budget for 2026-27 places strong emphasis on infrastructure development, industrial expansion, MSME growth and employment generation. The government has increased allocations for manufacturing, textiles, defence production and youth entrepreneurship, indicating a continued focus on investment-led growth and job creation across both urban and rural regions.
Q2. How much has the state allocated for infrastructure and industrial development?
The Budget proposes an allocation of INR 27,103 crore for infrastructure and industrial development, representing an increase of around 13 per cent over the previous year. This outlay is intended to support industrial area expansion, new infrastructure projects and policy initiatives aimed at strengthening Uttar Pradesh's manufacturing ecosystem.
Q3. What measures have been announced to support MSMEs and youth entrepreneurship?
An allocation of INR 3,822 crore has been proposed for the MSME sector, reflecting a 19 per cent rise over 2025-26. The Budget also introduces the Sardar Vallabhbhai Patel Employment and Industrial Zone scheme with an outlay of INR 575 crore. In addition, INR 1,000 crore has been earmarked for the Mukhyamantri Yuva Udyami Vikas Abhiyan, which aims to create one lakh micro enterprises annually, while INR 225 crore has been allocated for the Mukhyamantri Yuva Swarozgar Yojana.
Q4. How does the Budget plan to attract large investments and boost defence manufacturing?
To attract foreign direct investment and global companies, including Fortune 500 firms, the state has allocated INR 1,000 crore to implement its 2023 incentive policy. Under the Defence Industrial Corridor, memorandums of understanding have already been signed for setting up 200 defence manufacturing units, involving proposed investments of INR 35,280 crore and generating direct employment for over 53,000 people.
Q5. What support has been announced for the textiles and handloom sector?
Spending on handloom and textiles has been increased sharply to over INR 5,041 crore. Key allocations include INR 4,423 crore under the Atal Bihari Vajpayee Powerloom Weavers Flat Rate Electricity Scheme and INR 150 crore under the UP Textile and Garmenting Policy-2022. The government has also set a target of generating 30,000 jobs in the textiles sector during 2026-27, supported by the development of a mega textile park under the PM MITRA scheme.
Q6. What provisions have been made for rural industries and traditional crafts?
Under khadi and village industries, the Mukhyamantri Gramodyog Rozgar Yojana aims to establish 800 units through INR 40 crore in bank loans, with the potential to create employment for around 16,000 people. The Budget also includes INR 10 crore as interest subsidy under the Pt Deendayal Gramodyog Rozgar Yojana, along with targeted allocations for modernising the blanket production centre in Khajni, Gorakhpur, and supporting traditional potters through the UP Mati Kala Board.
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