VIJAYAWADA: The Andhra Pradesh government proposed the budget with an outlay of Rs 3,32,205 crore for the financial year 2026-27. Introducing the Budget 2026-27 in the AP Legislative Assembly on Saturday, Finance Minister Payyavula Keshav elaborated that while the revenue expenditure is estimated at Rs 2,56,143 crore, the capital expenditure is estimated at Rs 53,915 crore.
The estimated revenue deficit is around Rs 22,002 crore and the fiscal deficit is around Rs 75,868 crore. The revenue deficit will be around 1.11 percent and fiscal deficit will be around 3.84 per cent of GSDP.
The revised estimate for revenue expenditure for FY 2025-26 is Rs 2,38,021 crore, and for capital expenditure it is Rs 39,498 crore. The revenue deficit is around Rs 41,118 crore, whereas the fiscal deficit is around Rs 80,567 crore. The revenue deficit is 2.33 percent and fiscal deficit is 4.57 per cent of GSDP.
As anticipated, equal priority was given to the welfare and development in the budget. Apart from increased estimates of the capital expenditure, significant allocations were for the SC, ST, BC components and the welfare of Minority communities, Women and Children. Rs 51,012 crore was earmarked for the BC component, Rs 20,644 crore for the SC component, Rs 9,190 crore for the ST component, Rs 6,090 crore for the welfare of Minority communities, Rs 4,582 crore allocated for Women, Children, Differently Abled and Senior Citizens Welfare Department.
First of its kind in the history of the country, AP government is proposed to set up an AP Wealth Fund with a seed corpus of Rs 100 crore. Private equity investors will be invited to contribute to the fund to invest in opportunities across the country and generate wealth for the State.
The centrepiece of the 2026-27 Budget is a major expansion in public capital expenditure, which has been raised to Rs 53,915 crore, one of the highest levels in the state’s history. This large-scale investment is designed to accelerate economic activity across transport networks, irrigation systems, energy infrastructure, urban development and industrial corridors.
A significant share of the capital push is being channelled into future-facing sectors. The energy sector alone has been allocated Rs 13,934 crore, reinforcing state’s ambition to become a clean energy powerhouse. 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. 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.
Over Rs 9,900 crore has been allocated for major irrigation projects, while the Polavaram Project itself receives Rs 6,105 crore. Large allocations have been made for NTR Bharosa and other social security schemes.