Uttar Pradesh Finance Minister Suresh Khanna presented a comprehensive budget of Rs 8.08 trillion for the financial year 2025-26. This budget aims to enhance infrastructure, education, and agriculture in the state. The outlay represents a 9.8 per cent increase from the previous year’s budget of Rs 7.36 trillion. Chief Minister Yogi Adityanath emphasised that the budget reflects a commitment to the ancient Sanatan culture and aims to position UP as a key growth engine for India.
Economic Growth and Performance
Uttar Pradesh‘s economy has shown growth. In 2023-24, while India recorded a growth rate of 9.6 per cent, UP’s economy expanded by 11.6 per cent. This growth is indicative of the state’s improving economic landscape and effective governance.
Budget Allocation Breakdown
The budget allocates funds across various sectors. Infrastructure receives the highest priority with 20.5 per cent of the budget dedicated to capital expenditure. The state earmarks Rs 1,500 crore for new expressways and the UP Defence Industrial Corridor. Other allocations include 22 per cent for development projects, 13 per cent for education, and 11 per cent for agriculture.
Infrastructure Development Initiatives
A focus is on infrastructure development. The budget proposes substantial investments in expressways and other transport projects. This investment aims to enhance connectivity and stimulate economic activity across the state.
Technological Advancements and Innovation
The budget includes a provision of Rs 5 crore for developing an artificial intelligence city in Lucknow. This initiative aims to encourage innovation and attract technology-driven industries to the region.
Fiscal Responsibility and Economic Indicators
Uttar Pradesh’s Gross State Domestic Product (GSDP) is projected to reach Rs 27.51 trillion in FY25. The fiscal deficit is estimated at Rs 91,400 crore, which is 2.97 per cent of the GSDP, adhering to the Fiscal Responsibility and Budget Management (FRBM) norms. The public debt ratio has also decreased, indicating improved fiscal health.
Social Welfare Initiatives
The budget includes provisions for social welfare. Initiatives such as affordable food canteens for farmers and hostels for working women are planned in seven districts. Additionally, Rs 400 crore is allocated for providing free two-wheelers to students, promoting education and mobility.
Health and Education Improvements
Uttar Pradesh has progressed in health and education. The state’s health index has improved from 37 per cent in 2014-19 to 45.9 per cent in 2022-23. The budget allocates 6 per cent to medical and health services, reflecting a commitment to enhancing public health.
Questions for UPSC:
- Discuss the impact of infrastructure development on economic growth in Uttar Pradesh.
- Critically examine the role of fiscal responsibility in managing state budgets in India.
- Explain the significance of technology initiatives in enhancing economic development.
- With suitable examples, discuss how social welfare programs can contribute to overall economic stability.
Answer Hints:
1. Discuss the impact of infrastructure development on economic growth in Uttar Pradesh.
- Infrastructure investment enhances connectivity, reducing transportation costs and time.
- Development of expressways and transport projects stimulates local economies and attracts businesses.
- Improved infrastructure increases employment opportunities and supports industrial growth.
- Infrastructure projects can lead to higher capital expenditure ratios, reflecting a commitment to long-term growth.
- UP’s focus on infrastructure aligns with national growth targets, positioning the state as a key economic player.
2. Critically examine the role of fiscal responsibility in managing state budgets in India.
- Fiscal responsibility ensures sustainable public finances, preventing excessive debt accumulation.
- Adherence to FRBM norms promotes transparency and accountability in budget management.
- Fiscal discipline allows for better allocation of resources to essential services like health and education.
- States with strong fiscal management can attract investments and encourage economic stability.
- Fiscal responsibility can enhance the credibility of state governments, leading to improved credit ratings.
3. Explain the significance of technology initiatives in enhancing economic development.
- Technology initiatives drive innovation, improving productivity across various sectors.
- Investment in AI and tech infrastructure attracts skilled labor and tech companies to the region.
- Technological advancements can lead to the creation of new industries and job opportunities.
- Enhancing digital infrastructure supports e-governance, improving service delivery and efficiency.
- Technology initiatives can help address socio-economic challenges, promoting inclusive growth.
4. With suitable examples, discuss how social welfare programs can contribute to overall economic stability.
- Affordable food canteens for farmers improve food security and support local agriculture.
- Hostels for working women enhance workforce participation, contributing to economic productivity.
- Providing free two-wheelers to students promotes education access, leading to a more skilled workforce.
- Social welfare programs can reduce poverty and inequality, encouraging a stable economic environment.
- Investment in social welfare can stimulate consumer spending, driving economic growth.
