Amid challenges, U.P. govt gets ready to present 2025-2026 budget

Amid challenges, U.P. govt gets ready to present 2025-2026 budget

Amid challenges of mobilising additional funds and making use of them, the U.P. government has stepped up preparations to present its annual budget for 2025-2026 of a likely larger size of 8 lakh crore to 8.5 lakh crore.

Uttar Pradesh budget session likely to be convened later this month, say those aware of development. (For Representation)

Those aware of the development said the state government may convene the budget session later this month and work on giving a final shape to it has now begun at a faster pace.

A final draft of the budget would be worked out based on the guidelines that chief minister Yogi Adityanath may give to officials about incorporating some new development projects and the allocations of increased central funds as indicated in the Union Budget for 2025-2026.

“Yes, we have been waiting for indications about central allocations under various heads. We now have an idea (following presentation of the Union Budget on February 1, 2025) about the funds earmarked for the state – U.P.’s share in the central taxes, central assistance and the likely allocations under centrally sponsored schemes and so preparations for the annual budget have been stepped up,” said an official aware of the development.

“Around 10 to 15 percent increase is expected in the size of the state government’s budget as many big development projects are underway. As the amount of funds to be received from the Centre has gone up, the size of U.P.’s budget is bound to increase,” said professor Yashvir Tyagi, former head of economic department, Lucknow University.

The state government will, however, face greater challenges of funding the annual budget and spending the allocated amount, keeping in view the wide gap in budgetary estimates and actual expenditure.

The Comptroller and Auditor General in a report recently pointed out that the state government estimated a revenue expenditure of 5.21 lakh crore in the annual budget for 2023-2024 and could use only 4.29 lakh crore, indicating a gap of 18 percent over budgetary estimates.

This gap (in revenue expenditure) was 17 percent in 2021-2022 and 19 percent in 2022-2023. There was a wider gap in terms of capital expenditure (on creation of development infrastructure). The state government’s budgetary estimates projected a capital expenditure of 1.66 lakh crore and its actual expenditure remained only 1.18 lakh crore thereby indicating a gap of 29 percent under this head. This gap was 38 percent in 2021-2022 and 30 percent in 2022-2023.

The state government had presented annual budget of a size of 7.36 lakh crore in 2024-2025. It later presented two supplementary budgets of 17,865.72 crore and 12,209.93 crore thereby taking the total size of the budget in 2024-2025 to 7.66 lakh crore.

“We are sure the size of annual budget will be between 8 lakh crore to 8.5 lakh crore and hope the budget session may commence later this month,” said at least two other officials aware of the development.

The state’s share in central taxes is set to increase by 24,317.59 crore in 2025-2026. It got 230854.62 as U.P.’s share in 2024-2025 and this sum is set to go up to 255172.21 in 2025-2026.

Besides this, the state government hopes for more funds from the Centre as assistance and under centrally sponsored schemes. There are already indications that the state government would get nearly 4.5 lakh crore (including U.P.’s share in central taxes) in 2025-2026 and this will help in taking up the total size of the state’s annual budget.

Uttar Pradesh minister for finance Suresh Khanna and senior officers of the state finance department were not available for comments.

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