Union Budget 2026: Election Bound States on Budget’s Radar
Ahead of assembly elections, four states— West Bengal, Tamil Nadu, Assam and Kerala— figured prominently in the Union Budget as finance minister Nirmala Sitharaman proposed infrastructure projects, even as she was silent on big ticket populist schemes.
In West Bengal, where the BJP is leaving no stone unturned in its attempt to defeat chief minister Mamata Banerjee’s three term Trinamool Congress government, the budget proposed a dedicated East Coast Industrial freight corridor linking Dankuni in the state to Surat in Gujarat, linking the eastern state’s industries to the west. The proposal, reducing pressure on passenger trains, is expected to cut logistics costs. Last month, Prime Minister Narendra Modi had flagged off the Howrah-Guwahati (Kamakhya) Vande Bharat sleeper train from Malda railway station, connecting West Bengal and Assam, the only poll-bound state where the BJP is in power.
Besides, West Bengal is among the five Purvodaya states, the other four being Bihar, Jharkhand, Odisha and Andhra Pradesh, which will be tourist destinations in the region. The budgetary proposal included deployment of 4,000 electric buses, contributing to the development of public transport and clean mobility across the region, while focusing on development of tourism in the Eastern region. “I propose the development of an integrated East Coast Industrial Corridor with a well-connected node at Durgapur, creation of five tourism destinations in the five Purvodaya States,” Sitharaman said.
The budget also proposed seven high-speed rail corridors as “growth connectors”, including one connecting Siliguri in North Bengal to Varanasi in Uttar Pradesh. Two of the corridors connect Chennai in Tamil Nadu, where the BJP-AIADMK alliance is taking on MK Stalin’s DMK, to Bengaluru and Hyderabad. Sitharaman, who presented the budget wearing a Kanchipuram saree from her home state of Tamil Nadu, also announced expansion of the textile sector, through the “Tex-Eco Initiative” and “Samarth 2.0”, a move which could benefit textile hubs in Tamil Nadu, West Bengal, and Assam.
Tamil Nadu and Kerala, besides Odisha and Andhra Pradesh, also figured in the budgetary proposal to establish dedicated rare earth corridors, to promote mining, processing, research and manufacturing, in a bid to bring down import dependency on critical components used for electric vehicles and electronic goods. "A scheme for rare-earth permanent magnets was launched in 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu in establishing dedicated rare-earth corridors," she announced in her speech,” the finance minister said.
In a move that could bring relief to the coastal states of West Bengal, Tamil Nadu, Kerala and Puducherry, the budget proposed that fish caught by Indian vessels in the Exclusive Economic Zone (EEZ) or high seas will be free of duty. Besides, landing this catch at foreign ports will now be treated as an export, simplifying the books for larger fishing operations.