Union Budget 2026: Key Measures for Infrastructure-Led Growth in Housing
February 2, 2026: Union Budget 2026-27 Presented
Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in Parliament on February 1, 2026. This is the first budget prepared in Kartavya Bhawan, inspired by three key responsibilities: accelerating and sustaining economic growth, fulfilling the aspirations of the people, and aligning with the vision of Sabka Sath, Sabka Vikas.
Infra Push in Tier-2 and Tier-3 Cities
In her speech, Sitharaman emphasized the government’s efforts towards large-scale enhancement of public infrastructure. The public capex has increased from Rs 2 lakh crore in FY2014-15 to an allocation of Rs 11.2 lakh crore in 2025-26. For FY2026-27, the public capital expenditure is proposed to increase to Rs 12.2 lakh crore to maintain the momentum.
The government will focus on developing infrastructure in cities with over 5 lakh population (Tier-2 and Tier-3), which have become significant growth centers. These cities, along with temple towns, need modern infrastructure and basic amenities. The budget allocates Rs 5000 crore per City Economic Region (CER) over five years to implement their plans through a challenge mode with a reform-cum-results-based financing mechanism.
Govt to Set Up Infrastructure Risk Guarantee Fund and Dedicated REITs
An Infrastructure Risk Guarantee Fund will be established to provide partial credit guarantees to lenders, aimed at strengthening the confidence of private developers during the infrastructure development and construction phases. REITs have been successful in asset monetization, and the finance minister has proposed accelerating the recycling of significant real estate assets of Central Public Sector Enterprises (CPSEs) by setting up dedicated REITs.
Measures to Boost the Logistics Sector
The government has announced several measures to promote environmentally sustainable cargo movement:
- Dedicated Freight Corridors: Establishing new corridors connecting Dankuni in the East to Surat in the West. - National Waterways: Operationalising 20 new national waterways over the next five years, starting with NW-5 in Odisha to connect mineral-rich areas of Talcher and Angul to industrial centers like Kalinga Nagar and the Ports of Paradeep and Dhamra. - Training Institutes: Setting up training institutes as Regional Centres of Excellence for developing the required manpower. - Ship Repair Ecosystem: Establishing a ship repair ecosystem at Varanasi and Patna, catering to inland waterways. - Coastal Cargo Promotion Scheme: Launching a scheme to incentivize a modal shift from rail and road to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047.
High-Speed Rail Corridors Proposed for Key Cities
The government has proposed to develop seven High-Speed Rail corridors between key cities as ‘growth connectors’. These include corridors linking Mumbai to Pune, Pune to Hyderabad, Hyderabad to Bengaluru, Hyderabad to Chennai, Chennai to Bengaluru, Delhi to Varanasi, and Varanasi to Siliguri.
Industry Reactions on Union Budget 2026-27
Industry experts have welcomed the Union Budget 2026-27, highlighting the government’s commitment to sustained economic growth, attracting global business and investment, and a major push for technology and AI. While there are no major announcements directly impacting the real estate sector, key proposals to boost infrastructure, such as proposed high-speed rail corridors, will help drive real estate development across key cities.
Rohit Gupta, CEO of Mantra Properties, noted, “The Union Budget 2026 presents a definitive roadmap for a ‘Viksit Bharat’ by placing urban transformation at the core of national growth. The allocation of ₹5,000 crore per City Economic Region (CER) is a landmark move that will allow major economic hubs, including Mumbai, to deliver the true power of agglomeration.”
Shaishav Dharia, Director at Lodha Green Digital Infrastructure and CEO – Extended Eastern Suburbs & Rental Assets, said, “We strongly commend the government’s clear, long-term vision to position India as a global hub for data centres and cloud services. The tax holiday extended till 2047 for global cloud players using Indian data centres, together with safe-harbour clarity, sends an unambiguous signal to global investors.”
Prashant Sharma, President of NAREDCO Maharashtra, added, “The Union Budget 2026–27 strongly reinforces the government’s long-term commitment to inclusive and sustainable growth, with infrastructure-led development emerging as a central pillar. The significant increase in capital expenditure to Rs 12.2 lakh crore, coupled with continued focus on Tier II and Tier III cities, will act as a powerful demand catalyst for real estate beyond metros.”
Pradeep Aggarwal, Founder & Chairman of Signature Global (India) Ltd., commented, “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.”
Overall, the Union Budget 2026-27 aligns strongly with the long-term vision of Viksit Bharat by 2047, laying the foundation for sustainable, inclusive, and future-ready economic growth.
