Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026-27 in Parliament, announced a close to 9% increase in capital expenditure for the coming financial year, taking the allocation to ₹12.2 lakh crore. The enhanced outlay is intended to maintain momentum in infrastructure creation, improve execution timelines, and support broader economic activity at a time when urban development remains a key growth driver.
For the construction and real estate ecosystem, the Budget outlines a clear policy direction focused on strengthening housing demand through sustained public investment. Continued spending on roads, transport networks, and urban infrastructure is expected to improve accessibility, reduce development bottlenecks, and create favourable conditions for both residential and commercial real estate across major cities as well as fast-growing Tier 2 markets.
Among the notable announcements is the proposed Infrastructure Risk Guarantee Fund, designed to address financing challenges during the initial and high-risk stages of large projects. By offering calibrated credit guarantees, the mechanism aims to improve lender confidence and encourage long-term private capital participation. Alongside this, the government’s renewed emphasis on asset monetisation—particularly the structured unlocking of underutilised land assets held by Central Public Sector Enterprises—could help recycle capital while strengthening the commercial property segment.
The Budget also reinforces the push towards more balanced urban development by directing attention beyond established metropolitan centres. Investments in connectivity, land-use efficiency, and core infrastructure in emerging cities are expected to ease pressure on large metros while creating new hubs for housing, employment, and construction activity. If implemented effectively, these measures could provide greater stability and predictability for developers, investors, and end users alike.
Expert Opinion
Industry experts believe that the Budget’s emphasis on capital expenditure, risk mitigation, and asset monetisation could improve project viability, enhance funding access, and support long-term growth across India’s construction and real estate landscape.
For the construction and real estate ecosystem, the Budget outlines a clear policy direction focused on strengthening housing demand through sustained public investment. Continued spending on roads, transport networks, and urban infrastructure is expected to improve accessibility, reduce development bottlenecks, and create favourable conditions for both residential and commercial real estate across major cities as well as fast-growing Tier 2 markets.
Among the notable announcements is the proposed Infrastructure Risk Guarantee Fund, designed to address financing challenges during the initial and high-risk stages of large projects. By offering calibrated credit guarantees, the mechanism aims to improve lender confidence and encourage long-term private capital participation. Alongside this, the government’s renewed emphasis on asset monetisation—particularly the structured unlocking of underutilised land assets held by Central Public Sector Enterprises—could help recycle capital while strengthening the commercial property segment.
The Budget also reinforces the push towards more balanced urban development by directing attention beyond established metropolitan centres. Investments in connectivity, land-use efficiency, and core infrastructure in emerging cities are expected to ease pressure on large metros while creating new hubs for housing, employment, and construction activity. If implemented effectively, these measures could provide greater stability and predictability for developers, investors, and end users alike.
Expert Opinion
Industry experts believe that the Budget’s emphasis on capital expenditure, risk mitigation, and asset monetisation could improve project viability, enhance funding access, and support long-term growth across India’s construction and real estate landscape.
Gaurav K Singh, Chairman and Founder, Womeki Group said, “The proposed increase in capital expenditure to ₹12.2 lakh crore, coupled with the Infrastructure Risk Guarantee Fund, sends a strong signal of policy stability and long-term commitment to infrastructure creation. By mitigating development-stage risks and strengthening credit availability, these measures will accelerate project timelines and improve overall viability for developers. In Delhi-NCR, where real estate demand is closely linked to infrastructure expansion, enhanced freight corridors, asset monetisation through REITs, and improved connectivity will drive growth across housing, commercial offices and warehousing, deepening investor confidence in the region.”
Bharat Thakran, CMD, GHD Group said, “The government’s commitment to higher capital expenditure and the introduction of an Infrastructure Risk Guarantee Fund will strengthen lender confidence and fast-track infrastructure creation across the country. For Goa, these measures are especially significant. Improved connectivity, logistics efficiency and asset monetisation will enhance the state’s attractiveness for second homes, hospitality-led housing and long-term investments. With infrastructure acting as a growth catalyst, Goa’s real estate market is well positioned to see sustained demand from both end-users and investors seeking lifestyle-driven, future-ready assets.”
Rishabh Periwal, Senior Vice President, Pioneer Urban Land & Infrastructure Ltd., said, “The Union Budget 2026–27 marks a decisive shift for India’s real estate sector, moving towards a high-velocity urban economy by prioritising structural efficiency over mere expansion. The announcement of seven high-speed rail corridors, including the Delhi–Varanasi route, will significantly reduce geographical friction and unlock new growth corridors. The introduction of the Infrastructure Risk Guarantee Fund and dedicated CPSE REITs brings much-needed financial security and institutional liquidity into the ecosystem. Additionally, incentivising domestic manufacturing of advanced equipment is a potential game-changer, helping shorten project timelines and reduce global dependencies. For the luxury real estate segment, enhanced connectivity and faster execution will transform emerging micro-markets into sought-after urban hubs for HNIs, NRIs, and global investors.”
Mr Kirthi Chilukuri, Founder & Managing Director, Stonecraft Group, said, “Budget 2026–27 lays strong emphasis on urban development, infrastructure creation and sustainable growth, which aligns well with the evolving priorities of the real estate and built-environment sector. The continued focus on smart cities, urban infrastructure, housing and climate-resilient development encourages the adoption of innovative, sustainable and human-centric design approaches. The Budget’s direction towards green infrastructure, energy efficiency and long-term asset value creation provides an enabling framework for developers focused on biophilic design, integrated communities and future-ready living spaces. It reinforces the importance of building responsibly—where sustainability, well-being and economic value go hand in hand.”
Venket Rao, Founder - Intygrat Law and RERA Expert said “The Union Budget places strong emphasis on policy continuity, ease of doing business, and regulatory clarity, which is encouraging for the real estate sector. Streamlined approvals, stable taxation, and a predictable policy framework will help improve investor confidence and enable long-term planning for developers. This policy-driven approach, combined with sustained infrastructure push, sets the right foundation for sustainable and organised growth across residential and commercial real estate.”
Rajat Khandelwal, Group CEO, Tribeca Developers said "The government’s clear focus on infrastructure-driven growth, affordable housing, and the development of Tier 1 and Tier 2 cities provides a strong foundation for the sustainable development of real estate, besides encouraging more planned and future-ready urbanization. The proposed Infrastructure Risk Guarantee Fund is a decidedly progressive step, as it addresses long-pending risks of financing, improving access to capital, and allowing developers to launch large-scale projects with greater ease, speed, and financial prudence. From the buyer’s point of view, the continued government spending on infrastructure development will result in better connectivity, improved livability, and increased long-term value for homes, besides reducing the time required for neighborhoods to develop. As the infrastructure develops, demand is bound to follow, making this a good time for end-users to enter the market. The focus on asset monetization and optimizing land use will also unlock new development opportunities, further strengthening the residential and commercial sectors. The Budget has laid the foundation for a more transparent, stable, and growth-friendly real estate sector, which will benefit all stakeholders – developers, investors, and buyers."
Sh. Shrivallabh Goyal, CEO & Whole-Time Director, Model Economic Township Ltd. (Reliance MET City) said, The Union Budget 2026–27 reinforces the government’s clear commitment to infrastructure-led growth as the cornerstone of economic expansion, employment generation, and nationwide connectivity. The enhanced capital expenditure outlay of ₹12.2 lakh crore signals a decisive focus on building world-class physical and industrial infrastructure. This investment goes beyond headline numbers, translating into tangible progress across transport corridors, modern logistics networks, urban infrastructure, and industrial ecosystems; particularly in emerging Tier-2 and Tier-3 cities. The Budget’s strong emphasis on urban development further strengthens this momentum. With increased focus on urban housing, mobility, and city-level services, the government is laying the foundation for sustainable, liveable, and investment-ready cities. Integrated developments such as Reliance MET City exemplify this approach, where industrial infrastructure, urban planning, and workforce ecosystems converge to support long-term economic activity. Such targeted urban and industrial development will be critical in attracting private investment, enabling seamless urbanisation, and advancing India’s growth ambitions on the path to Viksit Bharat 2047.
Mr. Sidharth Chowdhry, Managing Director, Dalcore, said The Union Budget 2026–27, with a proposed capital expenditure of ₹12.2 lakh crore, reinforces the government’s commitment to infrastructure-led and balanced regional growth, particularly across Tier-2 and Tier-3 cities. For the luxury housing segment, especially in mature micro-markets like Golf Course Road, Gurugram, the Budget strengthens long-term fundamentals such as connectivity, institutional confidence, and planned urban development. Measures like asset monetisation through REITs and the Infrastructure Risk Guarantee Fund will further boost investor sentiment. At Dalcore, this aligns with our vision of creating globally benchmarked, design-led residential landmarks that support sustainable urban living as India progresses towards Viksit Bharat @2047.
Mr. Robin Mangla, President M3M India, said, "The Union Budget 2026 reinforces the importance of infrastructure-led growth as a key driver for real estate. The increase in capital expenditure to ₹12.2 lakh crore provides long-term visibility for urban expansion, connectivity, and project execution, underpinning demand across both residential and commercial segments. These measures will strengthen the overall real estate ecosystem, improve execution confidence, and support sustained growth across key markets, aligning well with M3M’s focus on delivering world-class developments and reinforcing long-term investor confidence."
Mr. Ajay Gupta, The Founder and Principal Consultant at Perceptive Ideas: Infrastructure developers received excellent news through this year's budget. The FM's ₹12.2 lakh crore allocation shows unwavering commitment to building India's future. The Tier II and Tier III cities received funding which makes me extremely happy. The entrance to these markets will create valuable business opportunities which will lead to economic expansion. The Infrastructure Risk Guarantee Fund provides an excellent solution. The solution tackles our main financial problem which we face during construction periods. Finally, the gap has been bridged. The combination of InVITs REITs and institutional support provides us with all necessary resources to achieve large-scale execution. Overall, with the Budget 2026, the government established a genuine partnership with construction companies.
Lalit Parihar, Managing Director, Aaiji Group, a Dholera-based real estate firm, "The Budget’s strong thrust on infrastructure through industrial corridors, manufacturing hubs, high-speed rail and dedicated freight corridors creates a powerful foundation for long-term real estate demand. The proposed ₹5,000 crore allocation per City Economic Region over five years in Tier II and III cities, including temple towns, is a significant catalyst for planned urban expansion. These measures will directly translate into improved connectivity, stronger employment clusters and greater investor confidence, driving sustained growth across residential, commercial, retail and logistics segments. Collectively, these initiatives will help transform emerging cities into viable economic centres and position real estate as a key enabler of India’s broader economic
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. said on Union Budget 2026-27, "The Union Budget 2026 provides a strong and credible roadmap for India’s next phase of growth, led by a sharp focus on infrastructure, urban development, and financial reforms. The government’s decision to raise public capital expenditure to ₹12.2 lakh crore in FY27, a 9% increase over FY26, will play a critical role in accelerating project execution and crowding in private investment. The creation of the Infrastructure Risk Guarantee Fund, along with the rollout of seven high-speed rail corridors and the operationalisation of 20 new national waterways over the next five years, will significantly enhance connectivity, reduce logistics costs, and improve the overall efficiency of the real estate and infrastructure ecosystem. Urban development receives a sustained boost with an allocation of ₹5,000 crore per year for five years for City Economic Regions, alongside a continued focus on Tier-2 and Tier-3 cities as emerging growth centres. These measures will enable planned urbanisation, support civic infrastructure, and unlock housing demand across new geographies. Further, accelerated recycling of CPSE real estate assets through dedicated REITs and continued emphasis on InvITs will deepen capital markets, improve liquidity, and strengthen investor confidence across the sector. On the consumption side, income tax reforms— including no tax liability up to ₹12 lakh under the new tax regime, rationalised TDS and TCS rates, and reduced TCS on overseas tour packages to 2%—will enhance disposable incomes and ease compliance, providing indirect yet meaningful support to housing demand. Overall, the Budget aligns strongly with the long-term vision of Viksit Bharat by 2047 and lays the foundation for sustainable, inclusive, and future-ready economic growth.”
Mr. Vikas Bhasin, Managing Director, Saya Group, said, "The Union Budget 2026 proposals are, to a large extent, in line with expectations, particularly the government’s continued focus on sustained investment in infrastructure that truly connects people and regions. By strengthening physical and urban infrastructure, the Budget aims to make cities more liveable, efficient, and accessible for citizens across income segments.The emphasis on Dedicated Freight Corridors, port-led development, and infrastructure expansion in Tier II and Tier III cities is expected to provide a significant boost to the housing sector. These measures will not only support real estate development in emerging urban centres but are also likely to have a positive spillover effect on overall housing demand and price stability in metro markets.While property prices in Tier I cities are expected to remain largely range-bound, improved connectivity and infrastructure development will encourage residential growth in suburbs and satellite towns. This will enable homebuyers to access more affordable housing options slightly farther from central business districts, without compromising on connectivity to workplaces and major urban hubs."
Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said, "The Union Budget 2026–27 reinforces the government’s long-term commitment to infrastructure-led growth, which remains a critical enabler for the real estate sector. The emphasis on infrastructure, risk mitigation, and structured city growth aligns well with our long-term approach to creating high-quality developments that contribute meaningfully to India’s evolving urban landscape.Creation of the Infrastructure Risk Guarantee Fund will enhance lender confidence in the infrastructure sector, which is expected to encourage greater private sector participation in large-scale projects. This bodes well for the real estate sector as real estate demand is closely linked to robust infrastructure and better connectivity.Moreover, the move to accelerate monetisation of CPSE-owned real estate assets through dedicated REITs while at one hand may strengthen the institutional framework for asset recycling, on the other it may also provide much desired capital efficiency in the sector. Overall, this seems to be a neutral budget from the real estate sector perspective."
Mr. Abhishek Raj, Founder and CEO, Jenika Ventures, said, "Budget 2026 strengthens the real estate growth framework by aligning urban development with long-term infrastructure planning. The emphasis on City Economic Regions will unlock new development clusters and enable more balanced expansion beyond major metros. A significant highlight is the ₹1.5 lakh crore outlay for 50-year, interest-free loans to states for capital expenditure and reform-linked initiatives, which will accelerate city-level infrastructure creation and improve project readiness. Measures such as the Infrastructure Risk Guarantee Fund and asset monetization through REITs further enhance funding stability and lender confidence. Together, these interventions provide predictability and a supportive environment for sustainable residential, commercial, and mixed-use real estate development."
Mr. Shorab Upadhyay, Managing Director,TRG Group, said, "The policy direction outlined in Budget 2026 is encouraging for the real estate sector, especially in emerging urban markets. The focus on City Economic Regions promotes planned urbanization and the creation of new real estate demand centers. States will benefit from a substantial ₹1.5 lakh crore allocation in 50-year, interest-free loans to fund capital expenditure and implement reform-driven projects, boosting infrastructure readiness at the local level. In addition, financing measures such as partial credit guarantees and REIT-based asset recycling will reduce risk and attract long-term institutional capital. Together, these initiatives strengthen the real estate ecosystem and support resilient urban growth across Tier II and Tier III cities."
Mr Aakash Patel, Managing Director, Atul Projects , said, "Mumbai’s real estate market will benefit from infrastructure investment as part of India's budget. Since FY2014-15, the public capital outlay has grown from ₹2 lakh crores to ₹11.2 lakh crore (as per the BE 2025-26) with a proposal of an additional ₹12.2 lakh crore for FY2026-27, establishing long-term certainty and confidence in the development of cities. The creation of the Infrastructure Risk Guarantee Fund will reduce the risk of building and financing properties. An additional benefit of the government’s reduction in TDS on NRI property sales will create liquidity to enable greater global investment in the Mumbai property market. Continued government support for the development of REITs and InVITs will help facilitate institutional investment in urban infrastructure and completion of projects will require accelerated processing and coordination to convert public sector funding into fast and efficient building processes and greater buyer confidence.”
Apurva Muthalia, Business Head – Real Estate at Equirus Family Office, said, The creation of REITs for PSU-owned real estate assets can be a structural positive for both the public sector and capital markets. It enables PSUs to free up capital from their balance sheets while retaining operational control over strategic assets. At the same time, it deepens the REIT market by offering investors access to stabilised, income-generating assets leased to quasi-sovereign entities. This creates a strong proposition for retail investors, asset managers and institutional investors, while unlocking value for PSUs that own multiple commercial office properties.
Mr. Kalyan Chakrabarti, CEO, Emaar India, said, “We welcome the Union Budget 2026-27, which continues to take strong steps towards the vision of Viksit Bharat by focusing on sustainable economic growth, infrastructure expansion, and inclusive development. India’s economic trajectory, marked by stability, fiscal discipline, and sustained growth, reflects the government’s continued focus on building a resilient and competitive economy. For the real estate sector, we are particularly encouraged by the initiatives such as accelerating asset monetisation through REITs and continued infrastructure development in cities with over 5 lakh population, including tier-2 and tier-3 markets. These measures will support balanced urban growth, improve liveability, and create new opportunities for communities across the country. At Emaar India, we remain committed to contributing to this growth journey by developing world-class, future-ready communities that align with India’s evolving aspirations.
The strong focus on boosting manufacturing, empowering MSMEs, and accelerating infrastructure development, along with the push for advanced technologies like AI and long-term stability, will help strengthen India’s competitiveness and support sustainable growth. The next few years present a significant opportunity to drive inclusive growth across regions and communities. At Emaar India, we remain committed to supporting the government’s vision by delivering projects that embody quality, innovation, transparency, and sustainability."
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