Union Budget 2026: Infrastructure-Led Growth Sets Stage for Real Estate Expansion Beyond Metros

Noida, February 1, 2026: The Union Budget 2026–27 has been widely welcomed by India’s real estate sector as a decisive step towards infrastructure-led growth, regional urbanisation, and financial stability. With public capital expenditure raised to INR 12.2 lakh crore, the government has signaled its long-term commitment to building a resilient economy anchored in connectivity, logistics, and sustainable development.

Industry leaders see the Budget as a continuation of momentum that has already transformed the sector in recent years. The introduction of the Infrastructure Risk Guarantee Fund is viewed as a game-changer, offering lenders partial guarantees to de-risk projects and improve financing confidence. This measure is expected to accelerate stalled developments, attract private capital, and strengthen execution certainty.

A recurring theme across reactions is the Budget’s sharp focus on Tier II and III cities, temple towns, and emerging urban centres. By announcing seven high-speed rail corridors, expanding multimodal logistics parks, and creating City Economic Regions (CERs) with dedicated funding, the government has laid the foundation for balanced urbanisation beyond metros. Developers believe this will unlock new residential and commercial markets, spur job creation, and foster organised growth in smaller cities.

The Budget also emphasizes asset monetisation through REITs and InvITs, enabling faster recycling of CPSE real estate assets and deepening capital markets. Tax holidays for foreign data centres till 2047, incentives for warehousing, and support for green infrastructure are expected to attract global investments and strengthen India’s position as a digital and logistics hub.

While some voices noted the absence of direct tax incentives for homebuyers, the overall sentiment remains positive. The Budget is seen as pragmatic, future-ready, and aligned with the vision of Viksit Bharat by 2047, promising sustainable urban growth, stronger investor confidence, and a more inclusive real estate ecosystem across India.
Here’s how the movers and shakers of the real estate sector reacted.

Manoj Gaur, CMD, Gaurs Group: “The Budget’s focus on infrastructure-led growth and increased public capex to INR 12.2 lakh crore continues momentum in real estate. Infrastructure spending will boost office, retail, and mixed-use projects, while strengthening job creation and residential demand. The Infrastructure Risk Guarantee Fund will accelerate expansion, especially in Tier II and III cities.”

Parveen Jain, President, NAREDCO: “The Budget reflects the vision of a developed India by 2047, emphasizing productivity and inclusive growth. The increase in capital expenditure to INR 12.2 lakh crore, with focus on cities over five lakh population, will boost Tier II and III real estate activity. The Infrastructure Risk Guarantee Fund will mitigate project risks and enhance lender confidence. Dedicated REITs for CPSE assets will promote efficient capital use. The announcement of seven high-speed rail corridors will spur regional connectivity and new real estate clusters.”

Dr Niranjan Hiranandani, Chairman, NAREDCO: “The Budget lays a roadmap for Aatmanirbhar Bharat with INR 12.2 lakh crore capex generating multiplier effects across real estate, logistics, and construction. The creation of City Economic Regions (CERs) marks a shift towards regional integration, with INR 5,000 crore allocated per CER. Investments in logistics, warehousing, and data centres will position India as a global hub. Affordable housing continues under PMAY with INR 79,000 crore allocation. The Infrastructure Risk Guarantee Fund will de-risk projects, while REITs for CPSE assets will unlock capital. Overall, the Budget sets a pragmatic framework for resilient cities and sustainable growth.”

Amit Modi, Director, County Group: “Raising capex to INR 12.2 lakh crore reinforces infrastructure-led growth. Tier II and III cities will benefit from improved connectivity and urban infrastructure. The Infrastructure Risk Guarantee Fund strengthens funding confidence and reduces execution risks, encouraging institutional participation.”

Nikhil Hawelia, MD, Hawelia Group: “The Infrastructure Risk Guarantee Fund acts as a safety net for banks, enabling mid-sized developers to pursue large-scale projects and revive stalled assets.”

Mohit Goel, MD, Omaxe Ltd: “The Budget’s focus on Tier II and III cities, including temple towns like Ayodhya and Vrindavan, is transforming them into vibrant urban centres. Infrastructure upgrades and tourism-led activity are driving demand for organised real estate. The national mission to strengthen sports infrastructure will further support mixed-use developments.”

Ashwinder R. Singh, Chairman, CII Real Estate Committee: “The Budget takes an infrastructure-first approach, reinforcing long-term growth and connectivity. However, it lacks direct tax incentives for homebuyers or affordable housing reforms. It is seen as a stability-oriented Budget rather than a stimulus for real estate.”

Bhupindra Singh, COO, RISE Infraventures: “High-speed rail corridors will improve accessibility and attract businesses to Tier II and III cities. Enhanced construction equipment schemes will support faster project execution. With INR 12.2 lakh crore capex, infrastructure-led urbanisation will accelerate organised real estate development.”

Uddhav Poddar, CMD, Bhumika Group: “Seven high-speed rail corridors and improved construction equipment schemes will unlock new residential and commercial markets. Increased capex will accelerate planned developments beyond metros, boosting developer confidence.”

Rajit Mehta, Chairperson, Association for Senior Living India: “The Budget acknowledges India’s ageing population by creating a 1.5-lakh-strong geriatric caregiver workforce and strengthening mental health infrastructure. These measures support senior care ecosystems and transition infrastructure.”

Dr. Gautam Kanodia, Founder, KREEVA: “Infrastructure-led growth with INR 12.2 lakh crore capex and new rail corridors will expand real estate opportunities beyond metros. Upgrading construction equipment will improve execution efficiency and buyer confidence.”

Gurpal Singh Chawla, MD, TREVOC Group: “The CER framework with dedicated funding for Tier II and III cities will gradually strengthen real estate fundamentals in emerging centres.”

Salil Kumar, Director, CRC Group: “Infrastructure is the biggest enabler of housing demand. Increased capex will make peripheral markets attractive for premium housing. Improved construction equipment will enhance delivery timelines and execution quality.”

Yash Miglani, MD, Migsun Group: “The Budget’s thrust on Tier II and III cities will drive organised commercial and mixed-use developments. The Infrastructure Risk Guarantee Fund reduces funding risks and promotes private investment.”

Pradeep Aggarwal, Chairman, Signature Global: “The Budget raises capex by 9% to INR 12.2 lakh crore, crowds in private investment, and enhances connectivity through rail corridors and waterways. CERs with INR 5,000 crore allocations will support planned urbanisation. REITs and InvITs will deepen capital markets. Tax reforms will enhance disposable incomes, indirectly supporting housing demand.”

Ankit Kansal, MD, Axon Developers: “Infrastructure-led development is now a priority. Increased spending and rail corridors will open new markets in metros and Tier II/III cities. The Infrastructure Risk Guarantee Fund will reduce risks and encourage private investment.”

Kushagr Ansal, Director, Ansal Housing: “Promotion of REITs will enable developers to raise capital and accelerate projects. Infrastructure expansion in Tier II and III cities will strengthen demand.”

Anshuman Magazine, Chairman & CEO, CBRE: “The Budget pushes future-ready infrastructure with emphasis on Tier II and III cities. CPSE assets entering REIT structures will deepen markets. Tax holidays for foreign cloud companies will catalyze data centre investments. Initiatives in biopharma and AI will drive demand for industrial and R&D infrastructure.”

Suresh Garg, CMD, Nirala World: “Capex raised by 8.8% will supercharge housing demand along new corridors. Tax holidays for data centres will attract $70 billion in investments. SWAMIH Fund 2.0 will unlock 1 lakh stalled units, restoring trust for homebuyers.”

Gaurav Pandey, MD & CEO, Godrej Properties: “The Budget’s record capex and measures like the Infrastructure Risk Guarantee Fund and CERs will support medium-term real estate demand. Fiscal discipline strengthens macroeconomic stability.”

Shesh Rao Paplikar, CEO, BHIVE Workspace: “Shared workspaces will benefit from initiatives supporting MSMEs and emerging hubs, positioning coworking as a key ally in transformation.”

Anshul Jain, Chief Executive, Cushman & Wakefield: “The Budget balances long-term measures with near-term relief. Emphasis on Tier II and III cities will create new growth levers. Hospitality and tourism clusters will unlock opportunities. REIT pooling of government land could unlock prime assets. Tax holidays for data centres incentivise hyperscalers.”

Kalyan Chakrabarti, CEO, Emaar India: “The Budget supports balanced urban growth through REITs and infrastructure development in Tier II and III cities. Focus on manufacturing, MSMEs, and advanced technologies will strengthen competitiveness.”

Shriram PM Monga, Co-Founder, SRED Advisory: “The Budget’s focus on Tier II and III cities, CERs, and asset monetisation via REITs will attract private capital and bolster retail real estate demand.”