The Union Budget 2026 has brought positive developments for BJP allies, particularly Andhra Pradesh and Bihar, with targeted tax benefits and infrastructure projects.
Andhra Pradesh, led by the TDP, is set to gain from a tax holiday for data centers until 2047, designed to attract investment and create jobs in the technology sector. Chief Minister Chandrababu Naidu hailed the budget as forward-looking and aligned with the state's priorities, especially in manufacturing, MSMEs, and technology. He noted that the tax exemptions for data centers would help establish India as a hub for AI-supported facilities, generating employment in Visakhapatnam. The budget also strengthens the Purvodaya scheme, introduces a coconut promotion scheme, and allocates funds for tourism projects in Andhra Pradesh. Furthermore, the identification of Andhra Pradesh as a Rare Earth Minerals corridor is expected to attract investments in mining, processing, and research, reducing India's dependence on critical imports. High-speed rail corridors connecting key cities like Hyderabad, Bengaluru, Chennai, Tirupati, and Amaravati are also expected to boost the state's connectivity and economic growth. Allocations of ₹5,000 crore per city over five years for City Economic Regions in Tier-2 and Tier-3 cities are expected to transform Vijayawada, Tirupati, and Visakhapatnam into regional growth centres.
Bihar is expected to receive significant infrastructure boosts, with a focus on improving connectivity and creating employment opportunities. The state is slated to receive Rs 1,51,831 crore as its share of central taxes in the 2026-27 financial year, the second-largest allocation among Indian states. This funding is intended to accelerate ongoing infrastructure projects and facilitate new welfare programs, addressing developmental gaps. A key project is the proposed Varanasi–Siliguri high-speed rail corridor, which will pass through Bihar, potentially serving as an economic lifeline for the region by easing the movement of goods and people. The budget also highlights Patna's role in inland water transport, with a ship repair facility planned for the city. Patna's selection as a key node in the inland waterways network is expected to generate technical jobs and create new opportunities for local businesses linked to river transport and logistics. Chief Minister Nitish Kumar welcomed the Union Budget 2026–27, highlighting the benefits of the Varanasi-Siliguri high-speed rail corridor and the creation of new national waterways for Bihar. He also noted that the support of ₹40,000 crore for semiconductors would create new employment opportunities for youth in Bihar and accelerate the nation's economic development.
The Union Budget 2026 outlines major rail, waterways and social projects for Bihar. Women-focused initiatives, such as "She-Marts" to connect self-help groups and rural women entrepreneurs directly to markets, and a plan to establish a girls' hostel in every district for students in science and technology fields, also form a pillar of the budget proposals. The government has proposed upgrading National Institutes of Pharmaceutical Education and Research (NIPER), with Hajipur's institute expected to benefit directly.
Overall, the budget signifies a strategic effort to support key allies through targeted economic measures and infrastructure development, potentially strengthening ties and fostering economic growth in these regions.