As preparations for the Union Budget 2026–27 gather pace, optimism is building across India’s real estate, infrastructure and manufacturing sectors. With real GDP growth estimated at a healthy 7.4% in the current fiscal year, industry leaders believe the upcoming budget presents a crucial opportunity to align economic momentum with middle-class aspirations, urban expansion and sustainable industrial growth.
A central expectation from the budget is continued thrust on infrastructure-led development. Projects such as the Delhi–Panipat–Karnal Regional Rapid Transit System (RRTS), a 130-km high-speed corridor that will connect the National Capital Region with Haryana’s emerging cities in under 90 minutes, are being seen as transformative. Beyond easing travel, such corridors are expected to unlock new residential and industrial clusters, supporting metro decongestion and balanced urbanisation.
Alongside physical connectivity, industry voices are calling for fiscal measures that reflect present-day economic realities for homebuyers. With the Cost Inflation Index rising from 240 in 2014–15 to 376 for 2025–26, stakeholders argue that existing home loan interest deductions under Section 24(b) no longer provide the relief they once did, particularly for salaried middle-income families.
Real Estate as a Core Growth Engine
Real estate continues to be a significant contributor to employment and gross value added, and is increasingly viewed as a bridge between infrastructure investment and India’s long-term development vision for 2047. Developers believe Budget 2026 can play a decisive role in strengthening this linkage.
Rohit Gupta, CEO of Mantra Properties and Developers, emphasised the need for formal recognition of the sector.
“Ahead of Budget 2026 it is critical that policymakers recognise real estate as a core growth engine of the Indian economy. Granting industry status will reduce financing costs and unlock deeper credit from banks, lowering capital expenses for developers and ultimately buyers,” he said.
Gupta added that industry status would enable access to external commercial borrowings, attract long-term institutional capital such as pension and insurance funds, and improve liquidity across the sector. He also underlined the urgency of single-window clearances, GST rationalisation, housing affordability measures and calibrated tax incentives to enhance competitiveness and ensure sustainable, inclusive housing growth.
Echoing similar sentiments, Sidharth Pansari, Director of Primarc Group, said the budget could act as a strong confidence booster for the sector.
“The upcoming budget can act as a strong confidence trigger for real estate if it prioritises homebuyer affordability, liquidity support for developers, and faster infrastructure-led urban expansion. A clear policy push in these areas would not only revive end-user demand but also accelerate sustainable, long-term growth across cities beyond the metros,” he said.
Focus on Green Manufacturing and MSMEs
Manufacturing leaders are also looking to the budget for clarity and support, particularly as global markets increasingly demand adherence to sustainability benchmarks. With solar power investments becoming more financially viable and capital costs expected to stabilise around ₹3.5 crore per megawatt, policy incentives could significantly accelerate adoption—especially among MSMEs, which account for nearly 45% of India’s exports.
Industry executives are seeking measures such as enhanced depreciation benefits, simplified tax structures and smoother GST input credit mechanisms to free up working capital and improve competitiveness, while enabling a faster transition towards renewable energy-led manufacturing.
Deepening Non-Bank Credit and Capital Markets
The role of alternative capital providers is another key theme emerging ahead of the budget. Dr. Amit Goenka, Founder, Chairman and Managing Director of Nisus Finance, highlighted the growing importance of non-bank lenders in addressing India’s housing finance gap.
“With India facing a housing shortage of over 20 million units, the role of non-bank lenders has become increasingly critical. NBFCs today account for nearly 25–30% of real estate credit flows,” Goenka said, pointing to the need for policy measures that improve access to both domestic and offshore debt capital.
He noted that while real estate contributes close to 7.3% of India’s GDP, banks remain risk-constrained, creating space for AIF-led private credit to step in. “Category II AIFs alone now manage commitments exceeding ₹11 lakh crore and are emerging as a key channel for long-term capital deployment,” Goenka said. He called for parity in tax treatment for Category II AIFs, clarity on pass-through status, rationalisation of withholding tax on offshore debt, and stronger credit enhancement mechanisms to scale sustainable capital flows into urban development and infrastructure.
A Pivotal Budget Ahead
As expectations rise, industry leaders see Union Budget 2026 as a potential inflection point—one that can simultaneously advance urban connectivity, restore housing affordability, deepen credit markets and accelerate India’s transition towards sustainable manufacturing. If aligned effectively, these measures could help sustain growth momentum and move the economy closer to its ambition of becoming a $5 trillion economy by 2027.
Also Read: Budget 2023 Expectations – What’s in store for real estate in Union Budget 2023?
