When Finance Minister Nirmala Sitharaman presented the Union Budget, all eyes were on what she would allocate for poll-bound states. She did not disappoint, but stayed away from big-ticket announcements, prompting the Opposition-ruled states to claim that they did not get enough.
In her budget speech, Sitharaman also sought to counter the Opposition’s attack directed against her government after the flagship employment scheme named after Mahatma Gandhi was renamed as G RAM G. She announced a new scheme titled ‘Mahatma Gandhi Gram Swaraj for khadi, handloom and handicrafts. This could help reduce some criticism directed towards the government.
The Finance Minister kept the government’s electoral prospects in mind as it targeted youth, creating opportunities for them in the services sector and skill them in the content creation economy or the ‘Orange economy.’
The Finance Minister has also announced some infrastructure projects for the poll-bound states, as it did in the 2021 budget ahead of polls in five states.
Of the five states, the BJP is in power in Assam and is keen to retain control. It received a combination of institutional and cultural investments.
Sitharaman flagged the absence of national-level mental healthcare institutions in north India and announced the setting up of NIMHANS-2 and the upgradation of National Mental Health Institutes in Tezpur as regional apex institutions. Ranchi Institute will also get an upgrade.
Beyond healthcare, the Budget proposed a scheme for the development of Buddhist circuits across Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura. The scheme will cover preservation of temples and monasteries, pilgrimage interpretation centres, connectivity and pilgrim amenities. The move positions the Northeast within India’s civilisational and tourism narrative, while also appealing to cross-border cultural linkages.
Assam will also benefit from the ₹20,000 crore outlay announced earlier for strengthening infrastructure in Tier 2 and Tier 3 cities.
West Bengal, a key battleground where the BJP faces Mamata Banerjee, also got infrastructure projects.
The Budget announced an east–west Dedicated Freight Corridor connecting Dankuni in West Bengal to Surat in Gujarat; development of an integrated East Coast Industrial Corridor, with a well-connected node at Durgapur; creation of five tourism destinations in the five Purvodaya states, including West Bengal; provision of 4,000 electric buses across Purvodaya states; a high-speed rail corridor connecting Varanasi to Siliguri.
These announcements allow the BJP to project logistics-led growth, industrial revival and green mobility in a state where it remains in opposition. However, Bengal CM Mamata Banerjee hit out at the budget proposals for the state, saying the projects the government announced were already in process and the state government was working on them.
In the South, Tamil Nadu and Kerala, both opposition-ruled states led by M. K. Stalin and Pinarayi Vijayan, respectively, were folded into a national strategy on minerals, mobility and sustainability. The Budget proposed the establishment of Dedicated Rare Earth Corridors to support mineral-rich states, including Tamil Nadu, Kerala, Odisha and Andhra Pradesh. These corridors will focus on mining, processing, research and manufacturing of rare earth materials, a sector with strategic and geopolitical relevance.
On transport, Sitharaman announced seven High-Speed Rail corridors to promote environmentally sustainable passenger systems, described as “growth connectors”: Mumbai–Pune; Pune–Hyderabad; Hyderabad–Bengaluru; Hyderabad–Chennai; Chennai–Bengaluru; Delhi–Varanasi; Varanasi–Siliguri. Tamil Nadu benefits directly through Chennai’s inclusion in multiple corridors, while Kerala is linked indirectly through regional connectivity.
Kerala was also included in turtle nesting trails along key coastal sites and national tourism and ecological conservation programmes.
The south and eastern states are also set to gain through a number of budgetary pushes in the agriculture and fisheries sector. Sitharaman announced support for high-value crops, including coconut, sandalwood, cocoa and cashew in coastal regions, agarwood in the Northeast.
Even a new coconut promotion scheme aimed at improving productivity has been announced. According to estimates, nearly 10 million farmers depend on coconut cultivation, particularly in coastal states. Sandalwood cultivation will receive focused support through partnerships with state governments to promote scientific farming and post-harvest processing. The Budget also proposes the integrated development of 500 reservoirs and water bodies to strengthen the fisheries value chain, particularly in coastal and inland regions.
Each poll-bound state received at least one scheme that can be localised, branded and repeated on the campaign trail.
Comparison with the 2021 Budget
The 2021 Union Budget, presented months before elections in Assam, West Bengal, Kerala and Tamil Nadu, included a series of state-specific infrastructure announcements. Major national highway projects were announced across all four states. Tamil Nadu featured prominently with multiple highway corridors, while Kerala was promised new stretches, including part of the Mumbai–Kanyakumari corridor. West Bengal saw plans for large-scale road upgradation along key economic routes, and Assam was positioned as a major recipient of ongoing and future highway investments over a multi-year period.
The finance minister also announced a dedicated welfare package for tea workers in Assam and West Bengal, targeting a politically significant workforce in both states. All four states went to the polls within months of the budget.
However, these states did not get big announcements like Delhi and Bihar got in the 2025 Budget. Last year, Sitharaman announced significant personal income tax relief measures that were highlighted by the BJP as part of its middle-class outreach. Bihar was given the Makhana Board, the national food technology institute, expansion of IIT-Patna, support for the Western Kosi Canal, and a renewed focus on tourism around key Buddhist heritage sites. These measures were widely interpreted as state-specific signals in the run-up to the polls.