Union Budget 2026–27: FM Sitharaman announces city economic regions, seven high-speed rail corridors

Union Finance MinisterNirmala Sitharaman on Sunday said cities will remain central to India’s growth strategy, announcing the creation of City Economic Regions (CERs) and the development of seven high-speed rail corridors to strengthen urban-led economic expansion.

Presenting the Union Budget 2026–27 in Parliament, Sitharaman said cities are India’s engines of growth, innovation and opportunity. She said the government will now place special focus on Tier II and Tier III cities, including temple towns, which require modern infrastructure and basic amenities to unlock their full economic potential.

The Finance Minister said the Budget seeks to amplify the economic power of agglomerations by mapping City Economic Regions based on their specific growth drivers. To support this, she proposed an allocation of Rs 5,000 crore per CER over five years to implement region-specific development plans. The funding will be provided through a challenge-based route using a reform-cum-results-based financing mechanism, she said.

To promote environmentally sustainable passenger transport and improve inter-city connectivity, Sitharaman announced the development of seven high-speed rail corridors between major urban centres, to serve as “growth connectors”.

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The proposed high-speed rail corridors include:
•    Mumbai–Pune
•    Pune–Hyderabad
•    Hyderabad–Bengaluru
•    Hyderabad–Chennai
•    Chennai–Bengaluru
•    Delhi–Varanasi
•    Varanasi–Siliguri

The measures, Sitharaman said, are aimed at strengthening urban infrastructure, boosting regional economic integration and enabling faster, sustainable mobility to support long-term growth.