In a year when four States and one Union Territory — Tamil Nadu, Kerala, Assam, West Bengal and Puducherry — are headed for Assembly elections, expectations around the Union Budget, at least in political circles, were that these States would receive some goodies.

While the Budget did include announcements touching these States, the measures were packaged within broader multi-State initiatives that reflected the Government’s attempt to balance domestic political expectations with global economic uncertainties. 

Union Budget 2026 LIVE: Inflation is down in India and it is remaining there for some time, says Finance Minister at post-Budget presser

This was, in fact, one of the first questions Union Finance Minister Nirmala Sitharaman was asked during her post-budget press conference — whether she had deliberately avoided poll-bound States after previous budgets that announced sops were criticised. “There is enough to cover all the election-bound States. Much has been announced for election and non-election States,” she said.

For West Bengal, the announcements include a proposed high-speed rail corridor between Siliguri and Varanasi, a Dankuni (East)-Surat (West) dedicated freight corridor, and an East-West Industrial Corridor. Tamil Nadu and Kerala feature in a Rare Earth Corridor along with Odisha and Andhra Pradesh, alongside incentives for farmers growing cashew, coconuts and Cocoa. The “Turtle Trails” project includes coastal areas of Odisha, Karnataka and Kerala. Assam is set to be a part of a Buddhist tourism circuit encompassing northeastern States like Tripura, Arunachal Pradesh, Sikkim, Manipur and Mizoram. The Lokpriya Gopinath Bordoloi Regional Institute of Mental Health in Tejpur, Assam, will also be upgraded.

By wrapping these measures in a multi-State spread, the government appeared to send the message that while concerns over domestic politics remain important, the global headwinds and the trade issues hanging fire were looming over it all.

The setting up of a National Institute of Hospitality for training in the service sector, encouraging women in STEM by setting up girls’ hostels in STEM institutions across districts, and several measures in the tax proposals to boost the manufacturing sector were the bigger announcements. A ₹40,000-crore push for Semiconductor Mission 2.0, and an electronics manufacturing boost were also announced.

All these measures, government sources said, are aimed at insulating India from global trade disruptions, strengthening supply chains, and preparing Indians for different skill set demands from countries with which India has concluded or is finalising Free Trade Agreements.

Many of these measures, however, are not immediately saleable in electoral terms and will require careful support from the government to bear fruit. The broader aim, government managers argue, is to craft a new narrative — of constructing a rail track in anticipation of a train running on it not today, but several years later — a horizon that may be far, but could affect the legacy of the Modi years (the period of governance under Prime Minister Narendra Modi).

Union Budget 2026 has several proposals to boost coastal shipping and kickstart inland shipping that has largely been a non-starter especially in cargo carrying. It also promises ₹10,000 crore to support the making of containers in India.

After COVID period during which the government realised the value of having Indian tonnage that it can leverage for national needs, the government has announced several proposals to rejuvenate indigenous shipping. In September 2025, the Union Cabinet approved a ₹69,725 crore comprehensive package that included major investment plans so State-owned Shipping Corporation of India (SCI) could buy a range of ocean-going merchant ships. The budget has allocated more than ₹1,700 crore for 2026-27 as part of this package.

In today’s speech, the Finance Minister spoke about the government’s aim to develop inland and coastal shipping so that its share in total cargo carried through road, rail and water increases from 6% to 12%. This would not only help to decongest roads and the rail system, but, being a potentially cheaper mode, inland waterways can facilitate market access for farmers and small businesses. A major push by the government is needed to overcome the current cost and time disadvantages of inland waterways, observers say.

In a major tax relief, the presumptive tonnage tax scheme will apply to inland and coastal ship companies rather than the generic income-based tax. Tonnage tax is the global standard and is typically at 5% on a presumptive income for a given tonnage. Further, centres to train youth in inland ship repair are targeted to come up in the hinterland in Varanasi (Uttar Pradesh) and Patna (Bihar).

The Budget has proposed to establish new Dedicated Freight Corridors connecting Dakuni in the east to Surat in the west and operationalise 20 new national waterways (NW) over the next five years starting with the Brahmani-Mahanadhi NW 5. This national waterway can connect mining centres in Talcher to industrial centres and feed Paradeep and Dhamra ports. “Mahanadhi has rich potential for development and cargo carrying. But it needs sustained investment such as in periodic dredging to make this project work,” said Amitabh Kumar, former director general of shipping.

The proposal on container shipping aims to create a globally competitive container manufacturing ecosystem with a budgetary allocation of ₹10,000 crore over a five-year period.

In the past, it was considerably cheaper to import new, empty containers from China than make them in India. There were no BIS standards for the specialised steel needed to make seaworthy containers that Indian steelmakers could use to manufacture the steel. Importing steel added to the costs. Also, quality guarantees could not be ensured. “Now, BIS standards are in place on a par with global and Chinese standards and more institutions have been certified to ensure high quality of containers made in India,” adds Mr. Kumar.

Container makers would like a combination of support measures: in land acquisition, through capex subsidy and a PLI scheme. “The aim should be to ensure that when scaled up, the cost of production of containers comes down to global levels,” says N. Bhanu Prakash, faculty at the Indian Maritime University, Visakhapatnam campus. He adds that mandating the use of Indian-made containers can also be considered.