Union Budget 2026 has sent a clear signal to the real estate and infrastructure sectors: the government is focused on long-term, investment-led growth rather than short-term stimulus measures. Sanjay Dutt, MD and CEO of TATA Realty and Infrastructure Ltd, notes that the Budget’s approach balances continuity, reform depth, and macroeconomic resilience amid global volatility. With public capital expenditure projected at ₹12.2 lakh crore for FY27, infrastructure development in integrated urban corridors, high-speed rail networks, national waterways, and urban core facilities is set to reshape spatial economics, reduce logistics costs, and promote decentralised urbanisation across Tier-II and Tier-III cities.
“Over time, this can drive more balanced urbanisation, higher productivity, and decentralised growth,” said Dutt, highlighting the strategic impact of the Budget on India’s cities beyond the top metros.
Infrastructure and Connectivity Take Center Stage
The Budget places significant emphasis on building future-ready infrastructure, with investments aimed at Tier-II and Tier-III cities expected to open new economic clusters. Sunil Pandita, Chief Development Officer at Nemetschek Group, said that the government’s focus on dedicated freight corridors, inland waterways, and a robust infrastructure risk guarantee framework will enhance India’s backbone for logistics, urban infrastructure, and industrial growth.
“This is an opportunity to accelerate the adoption of open, interoperable digital technologies across the construction and infrastructure ecosystem,” said Pandita. “By embedding digital-first design, planning, execution, and maintenance practices, India can deliver infrastructure that is faster, cost-efficient, sustainable, and resilient for decades to come.”
The integration of emerging technologies, particularly artificial intelligence, alongside infrastructure expansion, is expected to strengthen safety, quality, and lifecycle performance of highways, waterways, and urban projects.
Tier-II and Tier-III Cities Emerge as Growth Engines
A recurring theme among industry leaders is the Budget’s focus on emerging cities. Prashant Sharma, President of NAREDCO Maharashtra, highlighted that Tier-II and Tier-III centres are poised to become new engines for real estate expansion. Rising urbanisation, increased aspirational housing demand, and growing commercial activity in these areas make them attractive for developers and investors.
“Improved connectivity and urban infrastructure funding will significantly enhance housing demand and accelerate redevelopment in urban centres,” Sharma said. The combination of public capital expenditure, asset monetisation by CPSEs, and the expansion of REITs provides the real estate sector with fresh avenues for growth and investment.
Sanjay Dutt added that the Budget also strengthens the policy framework for digital infrastructure and data centres, positioning India as a competitive global hub for cloud services and data storage. Measures such as tax certainty, enabling frameworks, and allied reforms align with the nation’s broader transition toward a digital and AI-driven economy, further enhancing real estate opportunities in IT and commercial hubs.
Policy Clarity and Investor Confidence
The Budget delivers long-term policy clarity, which industry experts say is critical to maintaining investor confidence. Manish Agarwal, Managing Director of Satya Group and President of CREDAI Haryana, noted that while some expectations, such as demand-side stimulus and tax incentives for affordable housing, remain unaddressed, the Budget offers a solid foundation for long-term sector stability.
“The move to monetise CPSE-owned land is pragmatic,” Agarwal said. “It can unlock urban supply, support planned densification, and attract institutional capital, enabling more balanced and productive urban development.”
Sanjay Dutt also emphasised that reforms aimed at enhancing SEZ flexibility, REIT-led monetisation, and the proposed Infrastructure Risk Guarantee Fund signal a maturing capital ecosystem. Such initiatives improve risk allocation, encourage institutional participation, and deepen long-term capital pools, creating a favourable environment for both residential and commercial real estate.
Sustainability and Technology Drive Real Estate Evolution
Another notable aspect of Budget 2026 is the alignment with sustainable urban development. Industry experts point to the emphasis on GCC expansion, tourism infrastructure, and emerging technologies as multipliers for local economies. Sharma noted that investments in tourism and infrastructure can drive demand across hospitality, retail, logistics, and housing, creating high-value employment opportunities and knowledge spillovers.
“The government’s balanced approach towards fiscal consolidation, while maintaining momentum in infrastructure investment, will strengthen investor confidence,” said Sharma. Simplified tax processes for NRIs and more investor-friendly frameworks for foreign capital further enhance the attractiveness of India’s real estate market.
Sunil Pandita highlighted the potential for digital technologies to transform construction practices. AI-driven design, predictive modeling, and geospatial intelligence will play an increasing role in improving efficiency, safety, and sustainability of real estate and infrastructure projects. By embedding technology into planning and execution, the sector can deliver smarter, faster, and more resilient developments.
Driving Inclusive and Balanced Urban Growth
With these measures, Budget 2026 aims to foster inclusive and balanced urbanisation. Tier-II and Tier-III cities are expected to witness stronger growth trajectories, supported by improved infrastructure, planned urban corridors, and policy clarity.
“High-value employment, knowledge spillovers, and sustained office demand will follow infrastructure and urban development,” said Dutt. “Taken together, the Budget reinforces structural drivers of income, employment, and investment, laying a credible foundation for steady, broad-based growth across residential, commercial, and industrial real estate over the medium to long term.”
Agarwal stressed the need for state governments to align their policies with the central government’s vision to ensure faster project execution and improved housing supply. The combination of fiscal discipline, infrastructure investment, and regulatory clarity is expected to attract long-term capital while supporting sustainable urban development.
The Road Ahead for Real Estate and Infrastructure
Budget 2026 has been widely interpreted as a forward-looking roadmap for India’s infrastructure and real estate sectors. By combining technology, sustainability, and policy clarity, it sets the stage for long-term economic resilience.
Industry leaders agree that the focus on Tier-II and Tier-III cities, coupled with reforms in asset monetisation, SEZs, and REITs, can transform urban landscapes, improve investor confidence, and encourage balanced, decentralised growth. With robust public capital expenditure and digital infrastructure initiatives, India is positioning itself as a global hub for both investment and technological innovation in real estate.
As Sanjay Dutt concludes, “The Union Budget 2026 lays a credible foundation for steady, broad-based growth, reinforcing India’s structural drivers of investment, employment, and inclusive urbanisation.”
