The Uttar Pradesh government has estimated a 16 per cent jump in tax revenue in the next financial year (FY26), signalling a rise in economic activities.
The state has estimated the tax kitty to rise by ₹75,000 crore to reach ₹5.50 trillion in FY26 against the estimated tax revenue – including both own tax and the state’s share in central taxes – that was roughly ₹4.75 trillion in FY25.
The 16 per cent increase in the state’s estimated tax revenue is higher than the growth of 11 per cent estimated by the Centre in the Union Budget FY26.
UP’s own tax revenue is estimated to jump ₹39,000 in FY26 against the corresponding figure of ₹2.56 trillion projected in the UP Annual Budget FY25.
Similarly, the share of UP in central taxes is expected to hit ₹2.55 trillion in the next financial year as against ₹2.18 trillion in FY25.
UP has witnessed an uptick in tax mop-up over the past few years, owing to the growing bouquet of mega infrastructure projects that have catalysed the socioeconomic contours.
Besides, the growth of the tourism sector has helped other sectors such as hospitality, real estate, transport, and logistics to gain traction, boosting investor sentiments and contributing to higher tax collection.
Addressing the media after tabling the UP Budget FY26 in Vidhan Sabha, UP Chief Minister Yogi Adityanath said his government has adopted fiscal prudence and discipline. “Once reckoned as a bimaru (reference to laggard) state, UP has now emerged as a revenue-surplus state,” he said.
The UP Budget estimates total receipts of ₹7.79 trillion, including revenue receipts of ₹6.62 trillion and capital receipts of ₹1.16 trillion.
The state reported improvement in the quality of expenditure with the capex increasing to 19.3 per cent from 14.8 per cent of total expenditure during FY23.
Niti Aayog has ranked UP among the front runners in the fiscal health index of states.
Moreover, UP’s annual Budget FY26 has expanded 9.8 per cent at more than ₹8.08 trillion compared to the FY25 annual Budget of ₹7.36 trillion.
The state’s fiscal deficit is estimated at ₹91,400 crore, which is 2.97 per cent of the year’s expected gross state domestic product, thus taming it below the fiscal responsibility and budget management norm of less than 3 per cent.
