New Delhi: Finance minister Nirmala Sitharaman’s Union Budget 2026 features substantial budgetary allocations for poll-bound states like West Bengal, Tamil Nadu, Kerala, Assam, and Puducherry, with Rs 12.2 lakh crore in capex targeted at infrastructure and jobs.
Amid assembly elections this year, these allocations aim to fuel growth in key regions while maintaining fiscal discipline at 4.3% deficit.
According to reports, West Bengal secures major highway expansions, urban development funds, and rural industry packages, building on prior road allocations to create jobs in emerging growth centres. Tamil Nadu receives stalled metro project funding, education boosts, and industrial corridor nodes, highlighted by FM’s Kanjeevaram saree nod to the state.
Kerala eyes benefits for fiscal-stressed sectors like irrigation and social welfare, with Congress MP Shashi Tharoor welcoming potential central aid. Assam gets enhanced rural development, irrigation, and employment schemes under flagship programs. Puducherry benefits from tied grants for urban infra.
These states — facing polls soon — are in the spotlight, with speculation of voter-centric spending via project-linked funds rather than populist handouts. Centre emphasises formula-based transfers like tax devolution, but discretionary capex hikes address regional needs without breaching model code, reports said.
Past patterns, like Bihar and Andhra Pradesh packages in 2024 (Rs 11,500 crore for Bihar irrigation, Rs 15,000 crore for AP), set precedent for “Purvodaya” focus on eastern states including West Bengal and Jharkhand. Overall capex rises 12% YoY to Rs 12.2 lakh crore, prioritising infra in poll regions to spur Viksit Bharat goals.
Allocations draw opposition criticism as “election sops”, especially in opposition-ruled states like West Bengal and Tamil Nadu. Experts note balanced approach: targeted infra over cash giveaways, aiding GDP growth to 7-7.5% while curbing populism.
However, Bihar’s long-standing push for Special Category Status (SCS) remains unfulfilled in the Budget proposal 2026, despite fervent pre-budget appeals from state leaders and opposition. Citing per capita income below Rs 3,000/month in districts like Sheohar and a staggering Rs 3.5 lakh crore debt burden, RJD spokesperson Chitranjan Gagan urged immediate SCS to combat poverty affecting one-third of residents, reports said.
The demand, rooted in post-Jharkhand bifurcation industrial losses and economic backwardness, gained traction ahead of the Budget via Bihar’s memorandum to the 16th Finance Commission. SCS — offering 90% central funding for schemes versus 60-75% for others — could unlock higher tax devolution and non-lapsing grants, but Centre prioritizes formula-based transfers amid fiscal constraints.
Instead, Bihar received targeted packages like irrigation (echoing 2024’s Rs 11,500 crore) and rural infra under Purvodaya, but no SCS elevation, the reports added.
Critics like RJD slam it as “lip service,” accusing NDA allies BJP-JD(U) of ignoring promises despite Nitish Kumar’s leverage.
