Rare earth, rail, freight corridors: Poll-bound states major Budget beneficiaries
01 Feb 2026

The Union Budget 2026 has announced several initiatives aimed at poll-bound states such as West Bengal, Tamil Nadu, Kerala, and Assam.

These include dedicated rare earth corridors and rail and freight corridors.

The proposals also focus on boosting agricultural production and tourism in these regions.

Furthermore, Uttar Pradesh, Odisha, and other states are expected to gain from a series of infrastructure projects meant to improve connectivity and drive economic growth.

East Coast Industrial Corridor and tourism boost in Bengal
West Bengal

In a bid to woo voters in West Bengal, Finance Minister Nirmala Sitharaman announced an "East Coast Industrial Corridor." This will have a well-connected node in Durgapur.

The plan also includes five tourism destinations in the Purvodaya states: Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.

A dedicated freight corridor from Surat (Gujarat) to Dankuni (Bengal) will connect these two states directly for logistics and freight movement.

High-speed rail corridors as 'growth connectors'
Rail projects

Sitharaman also announced seven high-speed rail corridors as "growth connectors."

One such corridor will connect Varanasi and Siliguri in West Bengal.

"For an environmentally sustainable system, we will develop seven high-speed rail corridors between cities as growth connectors, namely Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Siliguri," said Sitharaman in her Budget speech on Sunday.

Rare earth corridors in Tamil Nadu, Kerala
Southern states

The Budget also proposed dedicated rare earth corridors in Tamil Nadu and Kerala.

"The scheme for rare earth permanent magnets was launched in November 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing," the finance minister said.

World-class trekking, bird-watching trails in Tamil Nadu
Economic boost

In Tamil Nadu, bird-watching trails along Pulicat Lake will be developed. The archeological site of Adichanallur will be transformed into a vibrant cultural destination.

Podhigai Malai in the Western Ghats is also identified for world-class trekking experiences.

Both Tamil Nadu and Kerala will also benefit from the Coconut Promotion Scheme to enhance competitiveness in coconut production.

"I propose....Coconut Promotion Scheme to increase production and enhance productivity through various interventions, including replacing old and non-productive trees with new saplings/plants/varieties," she announced.

Buddhist circuit development scheme for Assam
Assam initiatives

Assam has been included in a scheme for developing Buddhist circuits with Arunachal Pradesh, Sikkim, Manipur, Mizoram, and Tripura. This will involve preserving temples and monasteries and improving connectivity and pilgrim amenities.

The National Mental Health Institute in Tezpur will be upgraded to a Regional Apex Institution as part of the mental healthcare focus.