Andhra Pradesh Unveils Rs 3.32 Lakh Crore Budget for 2026-27, Emphasizing Fiscal Stability
In a significant move, Finance Minister P Keshav presented the annual budget for Andhra Pradesh for the fiscal year 2026-27 to the state assembly on Saturday. The budget outlines a total outlay of Rs 3,32,205 crore, marking a modest increase of Rs 10,000 crore from the previous year's allocation of Rs 2.22 lakh crore. This financial plan is designed to steer the state toward economic resilience and sustainable development.
Fiscal Framework and Key Expenditure Breakdown
The budget details a revenue expenditure of Rs 2,56,143 crore and a capital expenditure of Rs 53,915 crore, highlighting a strategic focus on long-term investments. Projections indicate a revenue deficit of Rs 22,002 crore, which accounts for 1.11% of the Gross State Domestic Product (GSDP), and a fiscal deficit of Rs 75,868 crore, representing 3.84% of GSDP. These figures underscore a deliberate path toward fiscal consolidation, aiming to reduce financial stress and enhance stability.
Minister Keshav described the budget as a roadmap of hope, crafted not just through income and expenditure statements but by aligning with the aspirations of farmers, youth, women, and vulnerable communities across Andhra Pradesh. He emphasized that this budget reflects corrective measures initiated in 2024 and is aligned with the broader Swarna Andhra @2047 vision under the leadership of Chief Minister Nara Chandrababu Naidu.
Major Departmental Allocations for 2026-27
The budget allocates substantial funds to key sectors to drive growth and welfare. Notable allocations include:
- School Education: Rs 32,308 crore, with Rs 1,500 crore earmarked for infrastructure overhaul.
- Panchayati Raj & Rural Development: Rs 22,942 crore, targeting over 4,000 km of rural road enhancements.
- Health: Rs 19,306 crore, following the clearance of Rs 6,486 crore in liabilities.
- Water Resources / Irrigation: Rs 18,224 crore, central to agricultural and economic growth.
- Municipal Administration & Urban Development: Rs 14,539 crore, including significant investments in capital city Amaravati.
- Energy: Rs 13,934 crore, with Rs 11,000 crore allocated for agriculture power subsidies.
- Transport, Roads & Buildings: Rs 9,856 crore, covering 6,036 km of road works and the induction of 750 e-buses.
Additionally, the budget prioritizes social welfare with allocations such as Rs 51,021 crore for the Backward Classes (BC) component, Rs 20,644 crore for Scheduled Castes (SC), and Rs 9,190 crore for Scheduled Tribes (ST).
Progress on Key Projects and Initiatives
The finance minister highlighted significant advancements in critical areas. For irrigation, the Polavaram project has seen 91% completion of the diaphragm wall, with overall progress exceeding 60%, and pending bills of Rs 5,000 crore have been cleared. In agriculture, Rs 13,598 crore is proposed for allied sectors, with Rs 6,660 crore released to 46.86 lakh farmer families under the Annadatha Sukhibhava–PM Kisan scheme in 2025-26.
Other initiatives include a Rs 500 crore allocation to the Price Stabilisation Fund, cooperative credit of Rs 7,600 crore extended to 53.2 lakh members, and under Deepam 2.0, Rs 2,897 crore credited to 1.08 crore women for LPG cylinders. Paddy procurement payments of Rs 10,580 crore have been transferred to 8.54 lakh farmers, bolstering rural economies.
Comparative Fiscal Performance and Future Outlook
Reflecting on past performance, the 2024-25 fiscal year recorded a revenue deficit of Rs 60,285 crore (3.79% of GSDP) and a fiscal deficit of Rs 81,362 crore (5.11% of GSDP). Revised estimates for 2025-26 show revenue expenditure at Rs 2,38,021 crore and capital expenditure at Rs 39,498 crore, with deficits narrowing to 2.33% and 4.57% respectively. Minister Keshav asserted that these trends indicate a steady movement from fiscal stress toward stability, reinforcing the state's commitment to a stronger and self-reliant Andhra Pradesh.
