Paris: Budgets are never just about numbers. They're political documents that reflect not only fiscal priorities but also political calculations. Budget 2026, presented against the backdrop of elections in West Bengal, Tamil Nadu, Kerala, Assam and Puducherry, is no exception. While GoI has carefully avoided conspicuous election-oriented largesse, distribution and nature of its promises reveal a subtler strategy: using infrastructure, connectivity and symbolic development to talk to voters in electorally-sensitive states.
At first glance, the budget appears to be an exercise in continuity. There are no dramatic shifts in welfare giveaways, and infra spending gets a boost. This posture allows GoI to claim fiscal responsibility while investing in critical domains. A closer look at state-specific announcements suggests that, as usual, electoral considerations have shaped not the size of spending but its geography.
West Bengal: The budget promises a dedicated freight corridor linking Dankuni to Surat, an industrial node at Durgapur under East Coast Industrial Corridor, and a high-speed rail link touching northern Bengal. These are not marginal interventions. They are large, headline-friendly projects with clear territorial footprints. Their long-term economic rationale is defensible. But their political utility is immediate. Freight corridors and high-speed rail lines are easy to showcase, easier to politicise, and harder for state governments to ignore or reframe.
Tamil Nadu: The state figures prominently in announcements on high- speed rail connectivity and in creation of rare earth corridors intended to support EVs and electronics manufacturing. These initiatives align neatly with Tamil Nadu's industrial profile and its aspirations to remain a manufacturing hub. Yet, they are also long-gestation projects whose benefits will materialise well after ballots are cast. As in West Bengal, GoI appears to be betting that the promise of future growth, rather than immediate redistribution, will shape political perceptions.
Kerala: The state presents a contrast. Included in the rare earth corridor initiative and recipient of eco-tourism and environmental projects, it still appears conspicuously absent from the budget's big-ticket infra announcements. There is no equivalent high-speed rail push, no major logistics corridor, no large urban investment. Emphasis on symbolic and ecological projects may appeal to niche constituencies. But it's unlikely to offset Kerala's deeper grievances over fiscal stress and shrinking state autonomy.
Assam: The state's allocations are more ambivalent. Tourism circuits, cultural heritage initiatives and a new mental health institute signal attention to the northeast, but avoid large employment-generating infrastructure. These investments may improve regional integration down the line. But their immediate impact is limited.
Puducherry: By virtue of its size, it barely registers. Its inclusion in blue- economy measures and coastal initiatives is meaningful, but politically marginal in a budget otherwise attentive to geography.
What ties these cases together is not generosity but selectivity. GoI has largely avoided direct fiscal transfers or welfare expansions that would strengthen states' capacity to deliver services in the short term. Instead, it has favoured centrally branded capex - railways, corridors, industrial clusters - implemented through central ministries and PSUs. This approach allows GoI to claim credit, retain control and showcase development, while limiting states' discretion.
Decision to retain the 41% tax devolution ratio reinforces this pattern. While technically consistent with the Finance Commission's recommendations, it does little to ease states' fiscal pressures, especially amid rising welfare demands and constrained borrowing. For Opposition-ruled states heading into elections, this creates a familiar bind: responsibility without resources.
Defenders of the budget will argue that it resists the temptations of election-year profligacy and remains mindful of an unpredictable international environment. That may be so. But the question is how many of these announcements will see light of day in a timely fashion. A quick review of past budget announcements shows that many infrastructure announcements are still in early stages of implementation.
Execution also remains marked by a persistent gap between budgeted allocations and actual expenditure. By privileging visible, long-term projects in select states, the budget performs a kind of politics that relies on anticipation rather than immediate relief, on symbolism rather than redistribution.
What is striking is not what states receive, but what they don't: little in the way of direct employment relief, urban welfare or social spending that might address everyday economic hardship. Similarly, education and health allocations remain flat as a share of GDP.
Ultimately, the budget reflects BJP's confidence in a growth-first electoral narrative. It assumes that voters in poll-bound states will reward long-term promises rather than short-term economic comfort. Whether that wager pays off will be decided not in Parliament but at the ballot box.
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West Bengal: The budget promises a dedicated freight corridor linking Dankuni to Surat, an industrial node at Durgapur under East Coast Industrial Corridor, and a high-speed rail link touching northern Bengal. These are not marginal interventions. They are large, headline-friendly projects with clear territorial footprints. Their long-term economic rationale is defensible. But their political utility is immediate. Freight corridors and high-speed rail lines are easy to showcase, easier to politicise, and harder for state governments to ignore or reframe.
Tamil Nadu: The state figures prominently in announcements on high- speed rail connectivity and in creation of rare earth corridors intended to support EVs and electronics manufacturing. These initiatives align neatly with Tamil Nadu's industrial profile and its aspirations to remain a manufacturing hub. Yet, they are also long-gestation projects whose benefits will materialise well after ballots are cast. As in West Bengal, GoI appears to be betting that the promise of future growth, rather than immediate redistribution, will shape political perceptions.
Kerala: The state presents a contrast. Included in the rare earth corridor initiative and recipient of eco-tourism and environmental projects, it still appears conspicuously absent from the budget's big-ticket infra announcements. There is no equivalent high-speed rail push, no major logistics corridor, no large urban investment. Emphasis on symbolic and ecological projects may appeal to niche constituencies. But it's unlikely to offset Kerala's deeper grievances over fiscal stress and shrinking state autonomy.
Assam: The state's allocations are more ambivalent. Tourism circuits, cultural heritage initiatives and a new mental health institute signal attention to the northeast, but avoid large employment-generating infrastructure. These investments may improve regional integration down the line. But their immediate impact is limited.
Puducherry: By virtue of its size, it barely registers. Its inclusion in blue- economy measures and coastal initiatives is meaningful, but politically marginal in a budget otherwise attentive to geography.
What ties these cases together is not generosity but selectivity. GoI has largely avoided direct fiscal transfers or welfare expansions that would strengthen states' capacity to deliver services in the short term. Instead, it has favoured centrally branded capex - railways, corridors, industrial clusters - implemented through central ministries and PSUs. This approach allows GoI to claim credit, retain control and showcase development, while limiting states' discretion.
Decision to retain the 41% tax devolution ratio reinforces this pattern. While technically consistent with the Finance Commission's recommendations, it does little to ease states' fiscal pressures, especially amid rising welfare demands and constrained borrowing. For Opposition-ruled states heading into elections, this creates a familiar bind: responsibility without resources.
Defenders of the budget will argue that it resists the temptations of election-year profligacy and remains mindful of an unpredictable international environment. That may be so. But the question is how many of these announcements will see light of day in a timely fashion. A quick review of past budget announcements shows that many infrastructure announcements are still in early stages of implementation.
Execution also remains marked by a persistent gap between budgeted allocations and actual expenditure. By privileging visible, long-term projects in select states, the budget performs a kind of politics that relies on anticipation rather than immediate relief, on symbolism rather than redistribution.
What is striking is not what states receive, but what they don't: little in the way of direct employment relief, urban welfare or social spending that might address everyday economic hardship. Similarly, education and health allocations remain flat as a share of GDP.
Ultimately, the budget reflects BJP's confidence in a growth-first electoral narrative. It assumes that voters in poll-bound states will reward long-term promises rather than short-term economic comfort. Whether that wager pays off will be decided not in Parliament but at the ballot box.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Gilles Verniers
Researcher at CERI (Centre for International Studies), Sciences Po, Paris