Budget earmarks Rs 65,926 crore for power in 2026–27; Big push for smart meters and RDSS

Lucknow: Finance minister Suresh Khanna proposed a Rs 65,926 crore outlay for the energy sector, an 8% rise over last year, signalling an aggressive drive to improve reliability, efficiency and consumer experience across the state's electricity network. The Budget combines capital investments (money spent on building or creating assets for the future which is Rs 20,103 crore) with revenue-side support (money spent on day-to-day expenses which is Rs 38,257 crore) to simultaneously strengthen infrastructure and keep power affordable.
On the capital side, the state has set aside about Rs 17,019.80 crore for generation, transmission and distribution projects. The revenue provisions include large allocations for subsidies, compensation and seasonal reliability measures. A centrepiece of the plan is smart metering, with Rs 4,155.17 crore earmarked under a dedicated head to expand prepaid/AMI meters statewide. Officials say smart meters will reduce aggregate technical and commercial losses, enable accurate billing, and give consumers real-time visibility of consumption—key to improving discom finances and service quality. The state has also reinforced its participation in the Revamped Distribution Sector Scheme (RDSS). The Budget provides Rs 2,920.99 crore for loss-reduction works, Rs 1,650 crore for IT/OT modernization, and Rs 1,045.19 crore for household electrification and feeder segregation. To harden the grid and prepare for demand growth, Rs 4,000 crore is allocated for UPPCL's distribution network strengthening, while Rs 583 crore goes to UP power transmission corporation for priority transmission schemes. The plan also continues support for green energy corridor-II, enabling evacuation and integration of renewable power through state allocations and a dedicated loan line. The govt has provisioned Rs 3,500 crore for summer reliability to ensure uninterrupted power between April and Sept, alongside targeted assistance lines that include tariff support for private tube-well consumers and compensation to UPPCL for revenue shortfalls. On clean energy, the minister highlighted additional energy sources with a proposed outlay of about Rs 2,104 crore, more than double last year. Under the UP solar energy policy-2022, state bio-energy policy-2022, and UP green hydrogen policy-2024, the govt has set a five-year target of 22,000 MW.