Smaller cities in Assam set to gain from Budget’s infrastructure push

Tier-2 and Tier-3 cities in Assam are expected to be among the main beneficiaries of the Union Budget 2026–27, with the Centre placing renewed emphasis on upgrading infrastructure, civic services and connectivity in smaller urban centres, officials said on February 1.

The Budget outlines a focused push to modernise towns and temple-centric urban areas that have traditionally lagged behind metros in basic amenities. Officials said this approach aligns with Assam’s urban profile, where a large share of economic and population growth is taking place in emerging cities rather than major metropolitan hubs.

Alongside urban infrastructure, the Budget’s strong thrust on micro, small and medium enterprises is expected to support local economies in these cities. Assam has a substantial MSME base in trade, services, agro-processing and small manufacturing sectors that are closely tied to Tier-2 and Tier-3 urban markets.

The northeastern region also figures prominently in the Budget under the ‘Purvodaya’ framework. An integrated East Coast Industrial Corridor has been proposed, with a connected industrial node at Durgapur in West Bengal. Officials said improved industrial and transport linkages could enhance market access for businesses operating out of Assam’s smaller cities.

Urban mobility in the region is set to receive support through the proposed deployment of 4,000 electric buses across eastern and northeastern states, a move that could strengthen public transport systems in mid-sized towns.

Tourism is another area where Tier-2 cities in Assam may see gains. The Budget has proposed the creation of five major tourism destinations across the ‘Purvodaya’ states, along with the development of a Buddhist Circuit spanning Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura. The circuit will focus on preserving temples and monasteries, improving connectivity and upgrading visitor amenities.

The Budget has also proposed upgrading the National Mental Health Institute in Tezpur as a Regional Apex Institution, a step officials said would enhance healthcare infrastructure and specialised services in upper Assam.

Officials said the combined focus on smaller cities, local enterprises and region-specific infrastructure could accelerate more balanced urban development across Assam in the coming years.