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Union budget: Uttar Pradesh eyes bigger share in central pie
The state witnessed a ₹36,285,37 crore increase in its share of central taxes and duties between 2024 and 2025
About a year before the 2027 state assembly elections, Uttar Pradesh hopes for an increased share in the overall Central tax devolution and a rise in grants focusing on infrastructure, agriculture and industrial growth when Union finance minister Nirmala Sitharaman presents the 2026-27 budget on February 1.
“A major increase could come from UP’s share in central taxes, centrally sponsored schemes and finance commission recommendations,” said a senior official in the state’s department of finance.
These could be in addition to the various project-based demands that Uttar Pradesh finance minister Suresh Khanna had placed during a pre-budget meeting in New Delhi recently.
A requirement of ₹32,075 crore for Metro rail expansion in Lucknow, Kanpur, and Agra, and for networks in new cities, an AIIMS in west UP and IIT in Bundelkhand were among the key demands raised at the meeting of state finance ministers with Sitharaman on January 10.
Uttar Pradesh’s share in central taxes and duties could go up from ₹2.55 lakh crore in 2025-26 to ₹2.80 lakh crore in 2026-27, according to those in the know of things.
The state witnessed a ₹36,285,37 crore increase in its share of central taxes and duties between 2024 and 2025, rising from ₹2,18,886.84 crore to ₹2,55,172.21 crore.
The outlay for centrally sponsored schemes in Uttar Pradesh could go up from ₹96,000 crore last year to ₹1 lakh crore. The central government funds these schemes in the 60:40 or even 90:10 ratio. Conceived by the centre and run by states, these schemes aim to achieve uniform national standards in social sectors like education, health and infrastructure.
Uttar Pradesh had got ₹10,000 crore allocation in the 2025-26 Union budget following the central finance commission recommendations.
As for the schemes fully funded and implemented by the central government, UP’s share could go up from approximately ₹13,000 crore in 2025-26 to ₹15,000 crore in 2026-27.
In the Union budget 2025-26, Uttar Pradesh got ₹18,000 crore for interest-free loan scheme designed to boost capital expenditure and infrastructure development. This figure might cross ₹20,000 crore now.
