Chandigarh: In a significant blow to the Chandigarh administration’s ambitious development agenda, the Union Budget for 2026-27 has drastically reduced capital outlay for the UT by nearly 24%, as compared to the previous fiscal year.The capital expenditure component, crucial for infrastructure, urban development, and major projects, has been slashed to Rs 606 crore in the coming fiscal year, down sharply from Rs 798 crore in FY 2025-26, reflecting a reduction of about 24%. This comes after a 21.83% increase in capital outlay for FY 2025-26 over FY 2024-25 (when it stood at Rs 655 crore, following a 9.2% cut in the 2024 Union Budget). Earlier trends show capital outlay at Rs 722 crore in FY 2023-24.The capital outlay cuts affect most departments. Notable reductions include public works, which is down from Rs 66 crore to Rs 52 crore. Education capital outlay sees a marginal dip from Rs 158 crore to Rs 142 crore. The capital outlay for medical and health has been reduced from Rs 170 crore to Rs 109 crore. The steepest cut is for ‘New and Renewable Energy’, plummeting from Rs 80 crore to just Rs 13 crore. However, a few sectors have seen increases in capital outlay, offering some relief. Housing allocation has risen from Rs 25 crore to Rs 36 crore, while power projects have gone up from Rs 4 crore to Rs 10 crore.Total outlay decreased The overall total outlay for Chandigarh in FY 2026-27 stands at Rs 6,545.52 crore, a decrease of around 6% (or Rs 437 crore) from Rs 6,983.18 crore in FY 2025-26. The Administration reportedly sought around Rs 8,300 crore from the Centre for the upcoming year, highlighting the gap between expectations and actual grants. For the outgoing FY 2025-26, the total outlay was increased by 7.21% in the Union Budget 2025. For the previous FY 2024-25, the total budgetary allocation growth was 7%. The allocation for the coming fiscal is marginally higher than revised estimates for the outgoing fiscal, which was Rs 6,465.77 crore, and is much lower than the actual allocation of Rs 6,598.19 crore made two years ago in FY 2024-25.Dip in revenue expenditure Revenue expenditure, which covers salaries, maintenance, and operational costs, has also been trimmed by about 4%, dropping to Rs 5,939 crore from Rs 6,185 crore in FY 2025-26. This reverses a trend of consistent increases, around 5% in FY 2025-26 and 9% in FY 2024-25. Despite the reductions, some revenue heads under key sectors have seen modest hikes. Administration of Justice is up from Rs 692 crore to Rs 731 crore. Allocation under the revenue head for police increased from Rs 872 crore to Rs 892 crore. For general education (salaries and related liabilities), it increased to Rs 948 crore. For the health sector, the revenue expenditure allocation rose from Rs 813 crore to Rs 844 crore.BOX: UT on budgetA UT spokesperson said, “In the power sector, the budget provision of Rs 877.39 crore in budget estimates (revenue expenditure) has been rationalised to Rs 156.95 crore, reflecting an adjustment of Rs 720.44 crore on account of privatisation of power. Keeping this structural change in view, the budget estimates for 2026-2027 reflect an effective increase of Rs 282.78 crore (4.63%).”BOX – Allocation for MC Grants-in-aid to the Chandigarh municipal corporation have been enhanced from Rs 625 crore in budget estimates 2025-2026 to Rs 850 crore in budget estimates 2026-2027, representing an increase of 36%.(FOUR BOXES – FOR GRAPHIC)**BOX 1: Budget estimates: Year | Demand | Allocation 2022-2023 | Rs 5,836 crore | Rs 5,382 crore 2023-2024 | Rs 6,806 crore | Rs 6,087 crore 2024-2025 | Rs 7,150 crore | Rs 6,513 crore 2025-2026 | Rs 7,950 crore | Rs 6,983 crore 2026-2027 | Rs 8,379 crore | Rs 6,545 crore**BOX 2: Budgetary Outlays**2022-23: Rs 5,382.79 crore2023-24: Rs 6,087.10 crore 2024-2025: Rs 6,513.62 crore 2025-2026: Rs 6,983.18 crore 2026-2027: Rs 6,545 croreRevenue Expenditure 2022-23: Rs 4,843 crore 2023-24: Rs 5,365 crore 2024-2025: Rs 5,858 crore 2025-2026: Rs 6,185 crore 2026-2027: Rs 5,939 croreCapital outlays 2022-23: Rs 539 crore 2023-24: Rs 722 crore 2024-2025: Rs 655 crore 2025-2026: Rs 798 crore 2026-2027: Rs 606 croreBOX 3: Capital outlay – Major depts Police 2024-2025: Rs 33.09 crore 2025-2026: Rs 83.26 crore 2026-2027: Rs 76.05 croreEducation, sports, art and culture 2024-2025: Rs 113.05 crore 2025-2026: Rs 158.28 crore 2026-2027: Rs 142.83 croreMedical and public health 2024-2025: Rs 96.27 crore 2025-2026: Rs 170.23 crore 2026-2027: Rs 109.45 croreHousing 2024-2025: Rs 22.95 crore 2025-2026: Rs 25.04 crore 2026-2027: Rs 36.05 croreNew and renewable energy 2024-2025: Rs 61.36 crore 2025-2026: Rs 80.01 crore 2026-2027: Rs 13.49 croreTourism 2024-2025: Rs 4.81 crore 2025-2026: Rs 8.51 crore 2026-2027: Rs 14.25 croreUrban development 2024-2025: Rs 140 crore 2025-2026: Rs 92 crore 2026-2027: Rs 87 croreSocial security and welfare 2024-2025: Rs 12.04 crore 2025-2026: Rs 8.02 crore 2026-2027: Rs 7.6 crorePower Projects 2024-2025: Rs 20.60 crore 2025-2026: Rs 4.18 crore 2026-2027: Rs 10.71 croreRoad Transport 2024-2025: Rs 57.49 crore 2025-2026: Rs 39.03 crore 2026-2027: Rs 40.55 croreBOX 4 – Key projects for capital expenditure Health Services: Includes provision for health services, upgrade of 50-bedded community health centre to a 250-bedded hospital, and strengthening of the 50-bedded polyclinic in Chandigarh Education: Providing amenities/services, graduate courses, and modernisation and construction of a new polytechnic, govt polytechnic for women, and industrial training institute Art, culture and museum: Includes provision for construction and renovation of Govt College of Art, administrative block, international hostel in Sector 15, auditorium, etc.Police housing and allied works: Includes provision for police housing and allied works like development of infrastructure, building, and renovation of existing residential houses, etc Road and transport: Includes provision for purchase of new buses, replacement of condemned buses, and upgrade of the bus stand; computerisation of Chandigarh Transport Undertaking; construction of link road; and purchase of video coach buses for intercity transport.Govt housing: Includes provision for construction/renovation of residential and non-residential govt buildings. 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