3 min readUpdated: Feb 1, 2026 03:12 PM IST
Presenting Union Budget FY2026-27, Finance Minister Nirmala Sitharaman announced structural infrastructure projects and resource development for five states — Assam, Tamil Nadu, West Bengal, Kerala, and Puducherry — going to polls this year.
Here is a breakdown of what the Budget has proposed for the election-bound states.
Budget 2026: Rare earth and railway push for Tamil Nadu and Kerala
The southern states arguably received the most specific structural attention in this budget, particularly in high-tech and connectivity sectors.
In a move to break import dependency, the Centre has announced rare earth corridors. Crucially, Tamil Nadu and Kerala, along with Odisha and Andhra Pradesh, have been named as beneficiaries. These states will receive support to establish dedicated corridors for mining, processing, and manufacturing rare earth permanent magnets. All these are critical components for electric vehicle and electronics goods manufacturing and assembling.
Tamil Nadu scored big on the connectivity map. Budget 2026 proposed seven new high-speed railway corridors, two of which directly benefit the state: Hyderabad–Chennai and Chennai-Bengaluru corridors. This promised to turn the region into a tighter economic agglomeration.
Check the LIVE updates and industry reactions to Budget 2026 here.
Budget 2026: West Bengal, Northeast, too, get logistics boost
Bengal has been on the BJP-led NDA’s radar for quite some time now. For West Bengal, the focus is on logistics and reducing the time (and distance) for trade. The Budget proposed a new dedicated freight corridor connecting Bengal’s Dankuni in the east to Gujarat’s Surat in the west. This is a massive infrastructure push intended to link Bengal’s industries directly with markets in the western part of India.
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Another move that is likely to impact both North Bengal and the Northeast, a Varanasi-Siliguri high-speed rail corridor has been announced. Siliguri’s constraint as the ‘Chicken’s Neck’ corridor makes this vital for both West Bengal and Assam, the ‘gateway to Northeast’.
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Coastal economy boost in Budget 2026: Kerala, Tamil Nadu, Bengal & Puducherry
The ‘Blue Economy’, which directly impacts the coastal belts of Kerala, Tamil Nadu, West Bengal, and Puducherry, has also got a push. In a major relief for deep-sea fishermen, the government has declared that fish caught by Indian vessels in the Exclusive Economic Zone (EEZ) or high seas will be free of duty. Furthermore, landing this catch at foreign ports will now be treated as an export, simplifying the books for larger fishing operations.
To move traffic off the roads, a Coastal Cargo Promotion Scheme has been announced. It aims to raise the share of inland waterways and coastal shipping from 6% to 12% by 2047.
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Incentives to indigenise seaplane manufacturing and a new Viability Gap Funding (VGF) scheme for operations have also been proposed. This could open new tourism circuits in backwaters and coastal towns of Kerala and Tamil Nadu.
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Budget 2026: Manufacturing and textiles industry boost to Assam, TN, Bengal
While not state-specific, the expansion of the textile sector through the “Tex-Eco Initiative” and “Samarth 2.0” will likely have trickle-down benefits for textile hubs in Tamil Nadu, West Bengal, and Assam.
