UP ranks first among states on highest investment in development and infrastructure

Uttar Pradesh has ranked first in the country for making the highest investment in development and infrastructure, according to a recent report. This was due to the fastest industrial development in the state during the past 8 years.

According to the report, UP alone is estimated to have a share of 16.3 per cent in the financial year 2025-26 in India’s total capital expenses, which is the highest among all states. This will be the second consecutive year when Uttar Pradesh will be on top of capital expenditure under the leadership of Chief Minister Yogi Adityanath.

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The capital expenditure means the amount that governments spend on the construction or acquisition of permanent assets such as roads and highways, schools, and hospitals, among other infrastructures. In simple terms, this is the expense that the government makes for future convenience and development, such as building infrastructure.

According to the recent report submitted by the Bank of Baroda, the total capital expenditure of 26 states of the country is estimated to reach Rs 10.2 lakh crore in FY 2025-26, which was Rs 8.7 lakh crore in the last financial year. According to the report, Uttar Pradesh has a share of 16.3 per cent followed by Gujarat (9.4 per cent), Maharashtra (8.3 per cent), Madhya Pradesh (8.1 per cent) and Karnataka (7.6 per cent) These five states will jointly spend more than 50 per cent of the country’s total capital expenditure.

At the top of these figures, the name of Uttar Pradesh is an indication that the speed of infrastructure and industrial development in the state is faster compared to other states. In the last financial year 2024-25, UP also spent the highest 16.9 per cent capital. This was followed by Maharashtra (10.9 per cent), Gujarat (8.1 per cent), Madhya Pradesh (7.5 per cent), and Odisha (6.4 per cent).

The Reports say that large projects such as the strategic plan, investor conferences, logistics hub construction, expressways, and airports expanded by the UP government in the last few years have made the state the country’s leader in terms of capital investment. Mega projects such as UP Industrial Defence Corridor, International Film City, Medical Colleges, and Ganga Expressway mega projects are among the prominent examples.

UP has also become the first choice for domestic and foreign investors due to the improvement in the ‘Ease of Doing Business’ along with better law and order. The huge investment proposals received during the Global Investors Summit 2023 are now being implemented on the ground, which has also increased the state’s capital experience, and new employment opportunities are also arising for the youth.

Not only this, the joint efforts of the Central and State Governments have given a big boost to budget allocation, approval of projects, and financial assistance. This has given a significant boost to capital expenditure in areas like health, education, infrastructure, and urban development, the report claimed.

The total receipts of 26 states in the current financial year are estimated at Rs 69.4 trillion. This amount is 10.6 per cent more than the last financial year. The bank has estimated 12.3 per cent increase in revenue receipts and 6.6 per cent increase in capital receipts, according to the report.

In this too, once again, Uttar Pradesh is expected to be at the top with 13.3 per cent stake. At number two is Maharashtra (11.3 per cent), Madhya Pradesh, Karnataka, and Rajasthan, with 5.9 per cent each. Tamil Nadu is not included in the top five this time.

The report of the Bank of Baroda states that all states will be very dependent on internal taxes, and GST will be the largest part of their own tax revenue. States’ revenues are estimated with 89 per cent income from other taxes, including GST, sales tax, excise, and stamp duty.

The largest share of this will be of GST (44.2 per cent). Nagaland (67.3 per cent), Delhi (59.7 per cent), and Bihar (57.1 per cent) — states which have the highest dependence on GST — while Madhya Pradesh (38.6 per cent), Andhra Pradesh (37.4 per cent) and Arunachal Pradesh (19.7 per cent) have the lowest dependencies.

The contribution of state excise duty on alcohol and tobacco is estimated to be 13.9 per cent. The top three states in this category are Sikkim (27.3 per cent), Andhra Pradesh (24.9 per cent), and Uttar Pradesh (21.4 per cent).