The Central Government has focused a lot on the development of small and medium cities in the Budget 2026-27. Finance Minister Nirmala Sitharaman announced that Rs 20,000 crore will be spent in the next five years to strengthen urban amenities in tier-2 and tier-3 cities, especially temple and religious towns. The government believes that these cities can play a big role in enhancing the economic strength of the country.
Small towns will also become centers of development
While presenting the budget, the Finance Minister said that now development will not be limited only to big metros. Better roads, water, sanitation and other basic facilities will be provided in Tier-2 and Tier-3 cities so that these cities can also become new centers of employment and investment.
Identification of City Economic Region
The government will identify cities as ‘City Economic Regions’ (CER) based on their development. This identification will be done keeping in mind sectors like tourism, manufacturing, services or logistics.
Rs 5,000 crore assistance to every region
Under the proposal, Rs 5,000 crore will be given to every city economic region in five years. With this amount, the basic facilities of the cities will be improved and the local economy will be strengthened.
Tourism described as a major source of employment
The Finance Minister described tourism as a strong pillar of employment-based development. He said that tourism is not just a means of earning, but it also provides direct employment to youth, local people and small businessmen.
Special skill training for youth
In the budget, it has been announced to start a special skill program related to tourism for the youth. In this, emphasis will be on hotel service, tour guide, travel management and digital services. Easy loans will be given under Mudra Yojana to promote homestays in rural and semi-urban areas. With this, people will get new opportunities for self-employment.
Development of 50 major tourist destinations
The government will develop 50 major tourist destinations across the country in collaboration with the states. Better connectivity, hotels and necessary facilities will be developed at these places. Hotels will be given infrastructure status so that investment increases.
Special attention on religious and Buddhist places
In the budget, emphasis has also been laid on the development of religious and spiritual places as well as places associated with Lord Buddha. This will attract tourists from India and abroad.
Promotion of medical and wellness tourism
Medical tourism and wellness tourism will also be increased with the help of private sector. For this, better facilities and easy visa rules will be implemented. Under Gyan Bharatam Mission, more than one crore manuscripts will be preserved and digitized. For this, work will be done in collaboration with educational institutions, museums and private collectors. Besides, a national digital repository of Indian knowledge system will also be created.
The country will get 7 new high-speed rail corridors
To give new impetus to rail connectivity in the country, 7 new high-speed rail corridors have been planned. Under this, travel between Mumbai and Pune will be faster and easier than before. The Pune-Hyderabad corridor will directly connect Maharashtra and Telangana, while Hyderabad-Chennai and Hyderabad-Bengaluru will provide faster connections between major cities and IT hubs of South India.
Apart from this, the Chennai-Bengaluru high-speed link will simplify the travel between Tamil Nadu and Karnataka. The Delhi-Varanasi Corridor in North India will connect the capital with the holy city of Varanasi, which will boost tourism and trade. The Varanasi-Siliguri corridor will prove to be a strong rail connectivity for Eastern India and North-Eastern states.
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