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Presented by finance minister Suresh Kumar Khanna, the budget not only strengthens key sectors like agriculture, MSMEs, and infrastructure but also pioneers investments in artificial intelligence, cybersecurity, and Smart Cities, analysts said
The government has proposed the establishment of an Artificial Intelligence City, which will serve as a hub for AI research and development, fostering innovation in automation, machine learning, and data analytics. Representational image/Shutterstock
With a record-breaking allocation of Rs 8,08,736 crore, the Uttar Pradesh Budget 2025 is a visionary blueprint for economic transformation, analysts said. Presented by finance minister Suresh Kumar Khanna, the budget not only strengthens key sectors like agriculture, MSMEs, and infrastructure but also pioneers investments in artificial intelligence, cybersecurity, and Smart Cities, they added.
While the opposition Samajwadi Party (SP) dismissed it as ineffective, several experts labelled it a transformative “AI-powered budget” that paves the way for Uttar Pradesh’s technological and industrial evolution.
A budget for holistic growth
In his budget speech, Khanna emphasised the government’s focus on fostering research, development, and IT-driven growth, ensuring that Uttar Pradesh keeps pace with the rapid technological transformations occurring globally. “This budget is a reflection of our commitment to making Uttar Pradesh a $1 trillion economy by investing in key sectors that drive growth and employment,” Khanna stated. A significant 22% of the budget is allocated for infrastructure, 13% for education, 11% for agriculture and allied services, and 6% for healthcare. This strategic allocation highlights the government’s commitment to balancing economic growth with social welfare.
For the first time in the state’s history, the finance minister has utilised NITI Aayog’s estimates to evaluate fiscal performance, reinforcing a data-driven approach to governance. Professor AP Tiwari, economist and former head of the economics department at Dr Shakuntala Misra National Rehabilitation University, Lucknow, said, “The use of NITI Aayog’s fiscal estimates adds credibility and transparency to the budget, making it more accountable and aligned with national economic goals.” Moreover, the 9.8% increase in the budget compared to the previous year signals a strong push toward higher capital expenditure, essential for long-term economic sustainability, he said.
However, the opposition, led by Samajwadi Party (SP) chief Akhilesh Yadav, has sharply criticised the budget, questioning its vision and impact. Yadav remarked, “This was their (current UP government’s) second last budget. Next year, they will present their last budget, and after that, we will get the opportunity to choose a new government. This budget has no association with their manifesto. This budget, and all those before, have had no vision… The people think that the budget has not been presented at all.”
Empowering traditional sectors
Uttar Pradesh’s economic backbone has always been its agriculture, MSMEs, and infrastructure sectors, which continue to receive substantial support in the budget. A farmer welfare fund of Rs 1,050 crore has been established to provide financial assistance in case of accidental death or disability. The One District One Product (ODOP) initiative, aimed at promoting local artisans and industries, remains a focal point, ensuring that traditional trades do not fade in the face of modernization. Professor AP Tiwari said, “This budget successfully integrates traditional economic strengths with emerging technological advancements, ensuring inclusive and sustainable growth.”
Professor Tiwari further said, “The emphasis on expressways and Smart Cities will not only enhance connectivity but also create new economic corridors that will attract businesses and generate employment.”
The infrastructure sector has received unprecedented support, with the development of four new expressways and major investments in roads, transport systems, and industrial expansion. The plan to transform 58 municipalities into Smart Cities also indicates a long-term vision for urban growth, blending modern technology with infrastructural expansion.
The rise of AI and technological advancement
What sets this budget apart is its pioneering focus on artificial intelligence and cybersecurity, positioning Uttar Pradesh as a leader in the digital economy. The government has proposed the establishment of an Artificial Intelligence City, which will serve as a hub for AI research and development, fostering innovation in automation, machine learning, and data analytics. Furthermore, a research park dedicated to cybersecurity will be developed to enhance digital safety and innovation in technology-driven fields.
“We are making strategic investments in technology and innovation because these are the industries that will define the future. This budget ensures Uttar Pradesh is at the forefront of digital transformation,” Khanna said.
Professor Tiwari said, “The allocation to infrastructure is not just an expenditure but an investment in the future. By fostering digital literacy and AI-driven research, the state is preparing itself for the next phase of economic transformation.”
Advanced budget for education sector
The budget’s emphasis on education has been welcomed by various experts, including Piyush Singh Chauhan, vice chairman of SR Group of Institutions. He commended state finance minister Suresh Khanna for allocating 13% of the budget to the education sector and introducing a scheme to provide scooters to meritorious female students pursuing higher education.
“The announcements made in this budget for the development of primary, secondary, and higher education are commendable. The government’s initiatives to promote girls’ education are significant,” Chauhan said.
He said that the budget will not only strengthen education but also contribute to the state’s economic growth.
Welfare, social security, and inclusive growth
Social security remains a cornerstone of the budget, ensuring that the benefits of economic growth reach every section of society. Two free cylinders under the Ujjwala scheme, scooters for meritorious students, and digital devices for government personnel are just some of the welfare initiatives designed to improve the quality of life for citizens.
A major highlight is the Zero Poverty Campaign, launched on October 2, 2024, with the goal of identifying and uplifting the poorest families in each village by ensuring a minimum annual income of Rs 1,25,000 per household. Additionally, investments in labour welfare, including the establishment of labour hubs with essential amenities like canteens, drinking water, and sanitation facilities, demonstrate the government’s commitment to social equity. “By addressing poverty at the grassroots level, this initiative has the potential to significantly uplift rural communities and provide economic security to millions,” said Professor Tiwari.