By Parveen Jain, President, NAREDCO
The Budget presented by the Finance Minister reflects the vision of a developed India by 2047. It focuses on productivity, competitiveness, and sustained economic growth amid global uncertainties, with the objective of further strengthening the Indian economy. The emphasis on inclusive development, ensuring “Sabka Saath, Sabka Vikas” by fulfilling people’s aspirations and providing equal opportunities across regions and sectors, is commendable.
The Finance Minister’s decision to increase capital expenditure from ₹11.2 lakh crore to ₹12.2 lakh crore for FY 2026–27, with a special focus on cities with a population of over five lakh, is a far-sighted move towards balanced urban development. This will act as a strong booster for real estate activity in Tier-2 and Tier-3 cities and accelerate urbanisation beyond metropolitan areas.
Most importantly for developers, the proposed Infrastructure Risk Guarantee Fund will help mitigate project risks during the development and construction phases. This will enhance lender confidence, facilitate easier access to finance, and support timely project execution. The establishment of dedicated REITs to accelerate the recycling of significant real estate assets of CPSEs is also a welcome step. It will promote efficient utilisation of capital and assets while creating new investment opportunities for the real estate sector. With the government’s continued support for asset monetisation, this Budget creates a stable, reliable, and conducive environment for real estate development.
The announcement of seven high-speed rail corridors will further strengthen infrastructure-led development. Corridors such as Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Delhi–Varanasi, and Varanasi–Siliguri will enhance regional connectivity and spur the growth of new real estate and industrial clusters.
Dr Niranjan Hiranandani, Chairman, NAREDCO
“The Union Budget 2026–27 firmly lays out a roadmap for an Aatmanirbhar Bharat, emphasizing infrastructure development, regionally integrated growth, and the empowerment of MSMEs as the cornerstone of India’s next phase of robust economic expansion.”
Marking a decisive increase, the government has proposed a significant public capital expenditure of ₹12.2 lakh crore, which is expected to generate strong multiplier effects across critical sectors including real estate, construction, logistics, and allied industries. The emphasis on enhancing execution certainty and investor confidence lays a solid foundation for sustainable development and long-term investments.
Towards a New Era of Regional Economic Growth
Breaking away from the traditional focus on metros, the Budget propels a transformational shift towards regional economic development through the creation of City Economic Regions (CERs). Each CER will integrate multiple urban centers—spanning Tier-2, Tier-3 cities and temple towns—and their surrounding hinterlands into unified economic ecosystems. These ecosystems will thrive on enhanced connectivity, improved competitiveness, and elevated liveability standards. To catalyze this unprecedented regional growth model, the government has allocated ₹5,000 crore per CER under a challenge-based funding approach, signalling an innovative and scalable urban renewal strategy.
Infrastructure Interventions: Unlocking New Corridors of Growth
The Budget’s transformative investment in logistics, warehousing, and data centre ecosystems underpins India’s emergence as a global supply chain and digital hub. By facilitating multimodal logistics parks and cold chains, the reforms will drastically improve efficiency and reduce wastage, directly benefiting manufacturers and exporters. Simplified customs procedures through safe-harbour norms will lower operational barriers, enhancing ease of doing business. The extended tax holiday till 2047, combined with incentives fostering green and sustainable data centres, will attract crucial foreign investments, enabling India’s growing digital economy to flourish. These developments collectively strengthen supply chain resilience, drive innovation, and fuel sustainable economic growth, anchoring India’s competitive edge in the global market.
Real Estate and Urban Economy Growth Drivers
The Budget acknowledges the rising importance of hospitality and tourism as dynamic growth engines. By improving connectivity and urban infrastructure, alongside a surge in domestic travel, demand for hotels, mixed-use developments, and destination-led real estate is expected to rise sharply generating employment and uplifting local economies. In line with this, commercial real estate prospects strengthen with expanding urban economies, enhanced mobility, and increased demand from MSMEs, service sectors, and global capability centres.
Furthermore, public sector enterprises (CPSEs) are empowered to unlock the latent value of government-owned real estate by establishing Real Estate Investment Trusts (REITs). This novel approach facilitates faster recycling of underutilized real estate assets, boosting capital inflows into infrastructure projects.
Logistics, Warehousing, and Data Centre Ecosystems
The Budget’s substantial ₹75,000 crore investment in logistics and warehousing infrastructure is poised to revolutionize supply chain efficiency by enabling the development of multimodal logistics parks, advanced cold chains, and modern warehousing facilities. The introduction of safe-harbour norms for bonded warehouses will simplify customs procedures, significantly lowering operational costs and boosting competitiveness for exporters and manufacturers alike. Additionally, the extended tax holiday till 2047 for foreign data centre and cloud service providers, coupled with incentives like SEZ status and renewable energy integration, positions India as a premier global data hub. Together, these measures will attract sustained investment, drive innovation, and create a robust, future-ready digital and logistics ecosystem, propelling economic growth.
Infrastructure Risk Guarantee Fund: Mitigating Execution Risks
Recognizing that infrastructure development often involves significant execution risks, the Budget proposes the establishment of an Infrastructure Risk Guarantee Fund. This fund will provide partial guarantees to infrastructure project lenders, thereby enhancing credit availability and lowering financing costs. It is a critical step towards de-risking infrastructure investments, thereby improving project bankability and attracting more private capital.
Affordable Housing: Continuity and Growth
The Budget reiterates the government’s unwavering commitment to affordable housing by continuing the PM Awas Yojana (PMAY) initiative, with an outlay of ₹79,000 crore earmarked for affordable and sustainable housing projects. This sustained support will not only enhance housing accessibility but also invigorate allied industries, reinforcing housing as a key driver of inclusive urban development.
Conclusion
The Union Budget 2026–27 lays down a strong, pragmatic, and future-ready framework for building competitive and resilient cities and economic regions. With a deliberate shift towards regional integration, sustained affordable housing growth, and transformative infrastructure investments, it paves the way for India to emerge as a global economic leader. The emphasis on improving real estate markets, logistics efficiency, and data infrastructure, coupled with policy stability and innovative risk mitigation, ensures a vibrant ecosystem for investors and stakeholders alike. Together, these measures promise to unlock new engines of growth, broaden economic opportunities beyond metropolitan hubs, and secure India’s position as a beacon of sustainable urban and economic development.
