In the UP Budget 2026-27, a provision of thousands of crores of rupees has been made for MSME, handloom and textile industries. The government has announced many important schemes to strengthen 3.11 crore employment, create 30,000 new jobs and promote young entrepreneurs.
The real strength of the economy of Uttar Pradesh is not only the big industries, but also the small businesses running in villages and towns, the weavers’ looms and the dreams of young entrepreneurs. Keeping this grassroots economy at the center, in the budget for the financial year 2026-27, the Yogi Adityanath government has announced comprehensive financial provisions and new schemes for Micro, Small and Medium Enterprises (MSME), handloom textile industry and Khadi village industries. The signals of the budget are clear, employment generation, modernization of traditional industries and giving impetus to the vision of self-reliant Uttar Pradesh.
MSME sector: Provision of Rs 3,822 crore, increase of 19%
An allocation of Rs 3,822 crore has been proposed for the micro, small and medium enterprises sector, which is 19 percent more than the last financial year. This is the same sector which is providing employment to about 3.11 crore people in the state. Uttar Pradesh is among the leading states in the country in terms of the number of MSME units.
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New plans and goals
- Sardar Vallabhbhai Patel Employment and Industrial Zone: Provision of Rs 575 crore
- Chief Minister Youth Entrepreneur Development Campaign: Provision of Rs 1000 crore: Target: Establishment of 1 lakh micro enterprises every year.
- Chief Minister Youth Self-Employment Scheme: Rs 225 crore
- One District One Dish Scheme: Rs 75 crore
Policy analysts believe that if 1 lakh new micro enterprises are established every year, there can be a significant increase in both employment and production at the local level.
Handloom and Textile Industry: More than five times budget increase
A provision of Rs 5,041 crore has been made for the handloom and textile industry, which is more than five times compared to last year. A target has been set to create 30,000 new jobs in this sector in the financial year 2026-27.
Major Initiatives
- Establishment of world class mega textile park under PM Mitra Park scheme
- Atal Bihari Vajpayee Power Loom Weavers Electricity Flat Rate Scheme: Rs 4,423 crore
- Uttar Pradesh Textile and Garment Policy 2022: Rs 150 crore
Initiatives like relief in electricity rates for the weaver community and modern textile parks are considered important in making the traditional industry competitive.
Focus on employment and rural economy
Both MSME and textile sectors are major sources of employment in rural and semi-urban areas. Experts say that the increased budget allocation will strengthen local production, exports and self-employment. In particular, schemes like “One District One Cuisine” and “Youth Entrepreneur Development Campaign” can promote local identity and branding, allowing small businesses to access the national market.
Steps towards self-reliant Uttar Pradesh
The aim of the state government is clear, not to limit industrial expansion only to big cities but to extend it to districts and villages. Investment in MSME, handloom and Khadi village industries is being considered as part of this strategy. Economic experts believe that if the schemes are implemented effectively, this budget can establish Uttar Pradesh as a model for employment generation and revitalization of traditional industries.
The budget for the financial year 2026-27 shows that the Uttar Pradesh government is emphasizing on employment-based development model. By proposing Rs 3,822 crore for MSME and Rs 5,041 crore for handloom and textile industry, the government has indicated that only small industries can become the foundation of big economic transformation.
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