Andhra Pradesh unveils Rs 3.32 lakh crore Budget for 2026-27; focuses on clean energy, Amaravati, and fiscal discipline

N Chandrababu Naidu, Chief Minister, Andhra Pradesh

• Andhra Pradesh hikes capital outlay by 33% to Rs 53,915 crore
• Clean energy, logistics, and Amaravati get major funding boosts
• Education, health, and agriculture budgets significantly increased

Did our AI summary help?

The Andhra Pradesh Government’s Budget for 2026-27 marks a decisive shift towards infrastructure-driven economic expansion while maintaining tight fiscal discipline, the state government said in a statement.

In the Budget, the state has balanced growth ambitions with financial stability, reinforcing investor confidence in Andhra Pradesh’s long-term development trajectory, it said.

The main focus area of the Budget is a major expansion in public capital expenditure, which has been raised to Rs 53,915 crore for 2026-27. This figure is 33 percent higher the Budgeted outlay for 2025-26 – which is Rs 40,635 crore.

"This large-scale investment is designed to accelerate economic activity across transport networks, irrigation systems, energy infrastructure, urban development and industrial corridors," the statement said.

"The government has clearly positioned infrastructure as a multiplier for private investment, job creation and long-term productivity growth, moving beyond consumption-led spending towards asset creation that strengthens the state’s economic backbone," it said.

The state’s total Budget expenditure for 2026-27 is Rs 3.32 lakh crore – of which Rs 2.56 lakh crore is earmarked for revenue spending.

Clean energy, logistics & Amravati

A significant share of the capital push is being channelled into future-facing sectors, said the statement.

The energy sector alone has been allocated Rs 13,934 crore, reinforcing Andhra Pradesh’s ambition to become a clean energy powerhouse. Connectivity and logistics - covering roads, ports and airports - will receive Rs 13,546 crore, strengthening supply chains and export competitiveness.

The development of Amaravati as the People’s Capital has been backed with Rs 6,000 crore, alongside major funding for industrial promotion, MSMEs and digital infrastructure including the Quantum Valley initiative. "Together, these investments are aimed at positioning the state as a hub for advanced manufacturing, deep-tech industries and global trade flows," said the statement.

Fiscal consolidation alongside rapid growth

Even as spending rises sharply, the Budget reflects strong progress in fiscal management. The revenue deficit has been brought down to 1.11% of GSDP, a steep improvement from previous years, while the fiscal deficit stands at 3.84% of GSDP and the primary deficit at 1.95%, the statement said.

These numbers signal a steady return to sustainable public finances without compromising on development priorities, it said. "At the same time, the state’s economy continues to expand at a robust pace, with GSDP projected to reach Rs 19.75 lakh crore in 2026–27, underscoring Andhra Pradesh’s position as one of India’s faster-growing regional economies."

Human capital placed at the centre

The Budget makes a strong case for people-first growth by substantially increasing allocations to education, healthcare and skilling. Nearly Rs 35,000 crore has been earmarked for school and general education, while the medical and health sector will receive over Rs 19,000 crore.

Significant funding has also been provided for scholarships, mid-day meals, higher education and skill development programmes, creating a pipeline of industry-ready talent, said the statement.

Agriculture and water security strengthened

Recognising the central role of agriculture in inclusive development, the 2026–27 Budget channels large resources into irrigation, farmer income support and climate resilience. Over Rs 9,900 crore has been allocated for major irrigation projects outside Polavaram, while the Polavaram Project itself receives Rs 6,105 crore.

"The Annadata Sukhibhava scheme continues to support farmers’ incomes, complemented by crop insurance and price stabilisation mechanisms. These investments aim to stabilise rural livelihoods, enhance productivity and protect farmers against market and climate risks, while integrating agri-tech and modern infrastructure into the farm economy," the release said.