Lucknow, Feb. 2 -- The Union Budget 2026-27 has announced the launch of the City Economic Region (CER) scheme to bring Tier-2 and Tier-3 cities into the mainstream of development by reducing pressure on major metros and strengthening infrastructure and economic activity in cities with populations above five lakh. The Centre has proposed phased investments of up to Rs 5,000 crore for each CER over the next five years. Presenting the Union Budget in the Lok Sabha, Union Finance Minister Nirmala Sitharaman said the new initiative would focus on Tier 2 and Tier 3 cities, as well as temple towns, which require modern infrastructure and improved basic amenities. The government will continue to focus on developing infrastructure in cities with over 5 lakh population (Tier 2 and Tier 3), which have expanded to become growth centres. "Under the scheme, cities under the two-tier category in Uttar Pradesh are expected to be among major beneficiaries", an urban development department official said. There are several cities categorised as Tier-2 cities in UP. The focus on temple towns appears to stem from the economic impact witnessed during the Mahakumbh. "Drawing lessons from the Mahakumbh experience and the Prayagraj-Kashi-Ayodhya circuit, the Centre has signalled a shift towards faith-based economic ecosystems, focusing on Tier-2 and Tier-3 cities and traditional temple towns as new growth engines" a state government spokesman said. The budget's emphasis on developing CERs around smaller urban centres is being seen as an extension of chief minister Yogi Adityanath's vision of strengthening towns as economic hubs. Historically, temple towns served as major commercial and cultural centres, and the Centre now plans to replicate the success of Prayagraj-Varanasi-Ayodhya circuit across the country. "Uttar Pradesh is expected to emerge as the biggest beneficiary of this shift, being home to major religious hubs such as Ayodhya, Varanasi, Mathura, Prayagraj, Naimisharanya, Kushinagar and Sarnath", the spokesperson said. Meanwhile, the Union Budget 2026 has provided a major boost to solar energy, battery storage and e-mobility through customs duty exemptions on key raw materials, a move expected to significantly benefit Uttar Pradesh's renewable push, including the PM Surya Ghar: Muft Bijli Yojana and the state's fast-growing EV ecosystem. "Duty relief on critical battery inputs such as cobalt powder, battery scrap and select minerals will strengthen grid-level energy storage, helping balance fluctuations in solar power generation." a government spokesman said. "This is likely to make Uttar Pradesh's power supply more stable, reliable and cost-effective as rooftop solar capacity expands across urban and semi-urban areas," he added. htc...