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Sitharaman unveils Budget 2026 with high-speed rail for Bengal and Tamil Nadu, Buddhist circuits for Assam, Rare Earth Corridors, and SME Growth Fund to boost poll-bound states.
Of the seven new high-speed rail corridors announced in Budget 2026, Tamil Nadu will get two, with Chennai being connected to the IT hubs of Bengaluru and Hyderabad.
Finance Minister Nirmala Sitharaman on Sunday announced a slew of new schemes and infrastructure initiatives for states going to the polls this year, including West Bengal, Tamil Nadu, Assam and Kerala.
At the start of her Budget speech, Sitharaman said the Prime Minister Narendra Modi-led government has “decisively and consistently chosen action over ambivalence, reform over rhetoric, and people over populism.”
From Manufacturing To Infra And AI: Capex Boost Flags Off Budget 2026 ‘Reforms Express’
What’s In Budget 2026 For Poll-Bound States
West Bengal & Assam
West Bengal, where elections are due in April–May this year, received a major infrastructure boost with the announcement of a high-speed rail corridor connecting Siliguri with Varanasi in Uttar Pradesh.
The Budget also proposed a dedicated freight corridor from Dankuni in the Kolkata Metropolitan Region to Surat in Gujarat.
In addition, Sitharaman proposed:
- Development of an integrated East Coast Industrial Corridor, with a well-connected node at Durgapur in West Bengal.
- Creation of five tourism destinations across the five Purvodaya states
- 4,000 e-buses to strengthen public transport
For Assam, the Finance Minister announced a new scheme to develop Buddhist circuits in the state.
Tamil Nadu & Kerala
Of the seven new high-speed rail corridors announced in Budget 2026, Tamil Nadu will get two, with Chennai being connected to the IT hubs of Bengaluru and Hyderabad.
The Centre also said it will support Tamil Nadu and Kerala in establishing dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing.
Other key announcements for the two coastal states include:
- Ecologically sustainable bird-watching trails along Pulikat Lake in Tamil Nadu
- Turtle trails along key nesting sites in Kerala’s coastal areas
- Support for high-value coastal crops such as coconut, sandalwood, cocoa and cashew
Other Schemes And Initiatives
The Finance Minister said poll-bound states are also expected to benefit from the Centre’s renewed focus on Tier II and Tier III cities, as well as temple towns, which require modern infrastructure and basic amenities.
City Economic Regions & Mega Textile Parks
City Economic Regions (CERs) will be mapped across the country, and an allocation of Rs 5,000 crore per CER over five years has been proposed to implement development plans.
Sitharaman also proposed to set up Mega Textile Parks in challenge mode. She said these parks can also focus on bringing value addition to technical textiles.
Rs 10,000 Cr SME Growth Fund
Sitharaman also proposed introducing a dedicated Rs 10,000 crore Small and Medium Enterprises (SME) Growth Fund aimed at creating future champions by incentivising enterprises based on select criteria.
Mahatma Gandhi Gram Swaraj Initiative
The Finance Minister announced the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts through global market linkages and branding.
The scheme will streamline and support training, skilling, and improvements in quality and production, benefiting weavers and village industries, One District–One Product initiative and rural youth.
February 01, 2026, 14:56 IST
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