Budget 2026: Government to focus on tier II, III cities, temple towns which need modern infrastructure, says Sitharaman

New Delhi: Describing cities as India's "engines" of growth, innovation, and opportunities, the government on Sunday announced that it shall now "focus on tier II and tier III cities, and even temple towns", which need modern infrastructure and basic amenities.

Presenting the Union Budget 2026-27, Finance Minister Nirmala Sitharaman said the budget aims to "further amplify" the potential of cities to deliver the economic power of agglomerations by mapping city economic regions (CER), based on their specific growth drivers.

"An allocation of Rs 5000 crore per CER over five years is proposed for implementing their plans through a challenge mode with a reform-cum-results based financing mechanism," she said.


In her speech, the FM made a slew of announcements on a range of sectors, including agriculture, finance, health, employment, industry and tourism.

"Cities are India's engines of growth, innovation, and opportunities. We shall now focus on tier II and tier III cities, and even temple towns, which need modern infrastructure and basic amenities," she said.

"This Budget aims to further amplify the potential of cities to deliver the economic power of agglomerations by mapping city economic regions (CER), based on their specific growth drivers," the FM added.

India's key temple towns include Varanasi, Ayodhya, Mathura in Uttar Pradesh; Somnath and Dwarka in Gujarat; Gaya and Bodh Gaya in Bihar, and Madurai and Rameswaram in Tamil Nadu, among others.