Budget boosts infrastructure, industry in poll-bound Tamil Nadu, West Bengal

With crucial assembly elections scheduled this year in Tamil Nadu and West Bengal, the Union Budget 2026-27 presented by Finance Minister Nirmala Sitharaman on 1 February has earmarked significant developmental initiatives for both states. The Budget focuses on infrastructure, industry, sustainable tourism, and critical mineral projects designed to accelerate growth, improve connectivity, and boost employment opportunities ahead of the polls.

For Tamil Nadu, the highlight is the announcement of a rare earth mineral corridor to support mining, processing, research, and manufacturing in the mineral-rich state. This initiative is part of a broader scheme launched in November 2025 to strengthen India’s rare earth ecosystem by supporting states including Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

In addition, the Budget proposes the development of seven high-speed rail corridors connecting major cities, with Chennai linked to Hyderabad and Bengaluru, promising faster and more efficient passenger travel.

The Finance Minister also announced ecologically sustainable tourism projects in Tamil Nadu, including a mountain trail in Podhigai Malai located in the Western Ghats and bird-watching trails around Pulikat lake, which borders Tamil Nadu and Andhra Pradesh.

The development of the archaeological site of Adichanallur into a vibrant cultural destination through curated walkways, immersive storytelling, and advanced conservation technologies reflects a push to leverage Tamil Nadu’s rich heritage.

Furthermore, the focus on Tier II and Tier III cities and temple towns such as Madurai, Kancheepuram, and Kumbakonam aims to enhance basic infrastructure and amenities, backed by a proposed Rs 5000 crore allocation per City Economic Region over five years.

Reacting to the Budget proposals, DMK spokesperson Constantine Ravindran said the expectations of Tamil Nadu which will go to polls is one thing, but when seen as a whole, there is nothing in the Budget for any sector including the MSMEs.

"It does not have an aim or goal and in short, it is directionless. Even the high speed rail link is not for operations within Tamil Nadu; one proposed connection is towards Bengaluru and another link terminates in Chennai; hence, Nirmala Sitharaman has again given zero as a gift to Tamil Nadu," he said.

In West Bengal, Sitharaman announced a new dedicated freight corridor from Dankuni (West Bengal) to Surat (Gujarat), targeting environmentally sustainable logistics to reduce costs and improve connectivity between eastern and western markets. The Budget also prioritises developing the Integrated East Coast Industrial Corridor, including an industrial node in Durgapur, a vital manufacturing hub supporting the Centre’s ‘Purvodaya’ vision for industrial growth in eastern India.

Tourism development is another focus, with five new destinations proposed in the Purvodaya states including West Bengal to encourage regional employment and growth. To support sustainable urban transport, the government plans to deploy 4,000 electric buses. Complementing these efforts is the development of seven high-speed rail corridors nationally, including a route connecting Varanasi and Siliguri in northern West Bengal, enhancing travel efficiency and regional integration.

West Bengal chief minister Mamata Banerjee said, “This Budget is directionless, visionless, actionless and anti-people. It is also anti-women, anti-farmer, anti-education and against the SC, ST and OBC... There is nothing on offer for Bengal in the Budget."

Industry leaders like Mehul Mohanka, Deputy Chairman of CII Eastern Region, have welcomed these announcements, emphasising their long-term benefits for enhanced raw material access, manufacturing, and logistics infrastructure in both states.

As Tamil Nadu and West Bengal prepare for elections later this year, the Budget’s focus on targeted infrastructure, ecological sustainability, industrial modernisation, and cultural preservation demonstrates the Centre’s intent to fuel economic development and address key voter concerns through strategic investments.