Rare Earth Corridors, Rail And Freight: Budget Takeaways For Poll-Bound States

The expected big-ticket announcements ahead of crucial elections in West Bengal, Tamil Nadu, Kerala and Assam may not have happened, but the Union Budget 2026 still had several proposals targeted at these states. The initiatives ranged from dedicated rare earth and rail and freight corridors to schemes aimed at boosting agricultural production and tourism.

West Bengal

With an eye on West Bengal, where the BJP hopes to come to power after three straight chief ministerial terms by Trinamool Congress chief Mamata Banerjee, Finance Minister Nirmala Sitharaman proposed an 'East Coast Industrial Corridor' with a well-connected node in Durgapur and the creation of five tourism destinations in the five 'Purvodaya' states - Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.

Sitharaman also proposed a dedicated freight corridor connecting Surat in Gujarat and Dankuni in Bengal. The new freight corridor will establish a direct link between the two states, from the east to the west, setting up new corridors for logistics and freight movement.

On the rail front, the finance minister announced seven high-speed rail corridors between cities "as growth connectors". One of these corridors will be between Varanasi and Siliguri in West Bengal.

Tamil Nadu And Kerala

One of the big announcements in the Budget was the proposal to establish dedicated rare earth corridors in four states - Tamil Nadu, Kerala, Odisha and Andhra Pradesh.

"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 in her speech.

Two of these states, Tamil Nadu and Kerala, are where the BJP has struggled to make any significant electoral inroads but is hoping to do better in the Assembly polls in a few months from now.

Two of the proposed high-speed rail corridors - between Hyderabad and Chennai, and Chennai and Bengaluru, are in Tamil Nadu - and the state is also getting bird-watching trails along the Pulicat lake, which it shares with Andhra Pradesh, as well as the development of the archaeological site of Adichanallur in Thoothukudi district as a vibrant, experiential cultural destination.

Podhigai Malai in the Western Ghats has been identified for the development of world-class trekking and hiking experiences.

Both Tamil Nadu and Kerala, among the largest producers of coconuts in India, will also benefit from the Coconut Promotion Scheme.

"India is the world's largest producer of coconuts. About 30 million people, including nearly 10 million farmers, depend on coconuts for their livelihood. To further enhance competitiveness in coconut production, I propose a Coconut Promotion Scheme to increase production and enhance productivity through various interventions. including replacing old and non-productive trees with new saplings/plants/varieties in major coconut growing states," Sitharaman announced.

Assam

BJP-ruled Assam has been included in a scheme for the development of Buddhist circuits, along with Arunachal Pradesh, Sikkim, Manipur, Mizoram and Tripura. The scheme will cover the preservation of temples and monasteries, pilgrimage interpretation centres, connectivity and pilgrim amenities.

As part of the focus on mental healthcare, the National Mental Health Institute in Assam's Tezpur will be upgraded to a Regional Apex Institution and the state will also benefit from the Centre's stated aim in the Budget of accelerating development and employment opportunities in the Northeast region.

All of these states, which have large agricultural populations, will also gain from the support for sandalwood, cocoa and cashew, as well as Agar trees in Assam.