Seeking to balance welfare and development, the Andhra Pradesh government presented a budget of over ₹3.32 trillion for 2026-27, stating that the state's finances were still recovering from the previous YSRCP's policies.
The budget was ₹10,000 crore higher than the previous fiscal year, with an estimated revenue expenditure of ₹2.56 trillion and a capital expenditure of nearly ₹54,000 crore.
Presenting the budget, Finance Minister Payyavula Keshav noted that the estimated revenue deficit was around ₹22,000 crore, representing 1.11% of the Gross State Domestic Product (GSDP).
Keshav said that while the state's finances are still fragile, the government is committed to addressing the challenges.
The government highlighted the development of an economic master plan for the Visakhapatnam Economic Region (VER), which includes seven growth drivers and 41 high-impact projects with a proposed investment of ₹28,000 crore, including metro rail projects.
The southern state will launch the "AP Wealth Fund," aiming to become as large as the sovereign wealth funds of Norway and Abu Dhabi, to manage the state's finances.
Keshav announced the creation of an AP Wealth Fund with an initial corpus of ₹100 crore.
Thanking Prime Minister Narendra Modi for initiating legislation to grant statutory status to the Amaravati capital city, Keshav said that administrative approval had been granted for 97 projects worth ₹57,868 crore.
The budget projects that the state will raise ₹76,000 crore through market loans and ₹19,000 crore from the Centre, while the GSDP for 2026-27 is estimated at ₹19.75 trillion.
The projected public debt for 2026-27 is ₹7.11 trillion, an increase from ₹6.35 trillion in the previous fiscal year.
The budget allocates ₹51,021 crore to the Backward Classes (BC) component and ₹32,308 crore to School Education.
It also allocates ₹19,306 crore to the Health, Medical & Family Welfare Department.
The Panchayati Raj & Rural Development Department, led by Deputy Chief Minister Pawan Kalyan, receives nearly ₹23,000 crore.
Key allocations include ₹18,224 crore for Water Resources, followed by Municipal Administration and Urban Development (₹14,539 crore), Agriculture (₹11,745 crore), Social Welfare (₹11,119 crore), and Economically Weaker Sections (EWS) Welfare (₹10,700 crore).
For welfare schemes, the southern state earmarks ₹27,719 crore for the NTR Bharosa scheme, which provides a monthly welfare pension of ₹4,000 to eligible beneficiaries.
In addition, ₹2,601 crore is allocated for the Deepam 2.0 scheme, offering three free cooking gas cylinders per year and ₹2,320 crore in economic support to various communities.
The Stree Shakti scheme, providing free bus travel for women, receives ₹1,420 crore for the next financial year, along with ₹600 crore for power subsidies for vulnerable sections.
Thalliki Vandanam, offering ₹15,000 per annum to each school-going child, receives ₹9,668 crore, followed by Woman and Child Welfare (₹4,581 crore) and scholarships (₹3,838 crore).
Annadata Sukhibhava, providing ₹20,000 per annum to farmers, receives ₹6,600 crore.
Similarly, Higher Education receives ₹2,566 crore, while ₹707 crore is allocated for PM Schools for Rising India and ₹438 crore for Youth Advancement and Sports.
Other key allocations include nearly ₹10,000 crore for major irrigation projects, the Polavaram project (₹6,105 crore), and the Rashtriya Krishi Vikas Yojana (₹1,927 crore).
The budget also provides ₹8,365 crore for the rural employment guarantee program Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Grameen (VB G-RAM-G).
Furthermore, it allocates ₹5,451 crore for Housing (Urban and Rural) and ₹4,000 crore each for the Dr NTR Vaidya Seva Trust and Jal Jeevan Mission.
Keshav stated that the TDP-led government aims to provide 25 lakh house pattas and houses to EWS under the PMAY (U) – NTR Nagars scheme.
Among the 10 major initiatives, the budget lists free power to weavers, city economic regions specific to Visakhapatnam, Amaravati, and Tirupati, the Rayalaseema Global Horticulture Hub, free bus service for disabled men, quantum computing, 3,000 new police vehicles, and others.
He noted that the Rayalaseema Integrated Development Plan includes expanding the horticulture area from 8.41 lakh hectares to 14.41 lakh hectares by 2030.
In his speech, the minister said that two years is not enough to rebuild the state, which has faced catastrophic events since its inception, including the "misrule" from 2019-24.
Andhra Pradesh Chief Minister N Chandrababu Naidu called the ₹3.32 trillion budget for 2026-27 an improved one. He noted that the state is recovering from the alleged destruction caused by the previous YSRCP government, according to a TDP source.
"Though low revenue and high expenditure are a legacy we inherited, we are managing the situation with the cooperation of the Central government," he said.