Irfan Razack, Chairman& MD, Prestige Group

The Union Budget has once again reaffirmed the government’s long-term commitment to building a future-ready economy through sustained infrastructure investment and innovative financial mechanisms. For the real estate sector, the announcements on enhanced public capital expenditure, the introduction of dedicated REITs for CPSE asset recycling, and the proposed Infrastructure Risk Guarantee Fund for private developers are particularly significant. Together, these measures will not only accelerate economic growth but also create new opportunities for urban development beyond the metros and strengthen private-sector participation. 

One of the most notable highlights of this year’s Budget is the rise in public capital expenditure from ₹11.2 lakh crore in FY 2026 to ₹ 12.2 lakh crore in FY27. This sharp increase signals the government’s continued focus on infrastructure-led growth as a key driver of employment, investment, and overall economic expansion. Public capex has a strong multiplier effect, stimulating demand across industries such as construction, steel, cement, logistics, and real estate. 

What is even more encouraging is the targeted focus on infrastructure development in Tier 2 and Tier 3 cities, as well as temple cities. This forward-looking approach aligns with the changing dynamics of India’s urbanisation. Smaller cities are increasingly emerging as growth engines, driven by improving connectivity, digital penetration, and the decentralisation of economic activity. 

Enhanced infrastructure in these regions will catalyse real estate development and create demand for quality housing, commercial spaces, hospitality projects, and integrated townships. Temple cities, in particular, stand to benefit from improved civic amenities, tourism infrastructure, and planned urban development. This will not only enhance the visitor experience but also create sustainable economic ecosystems for local communities. 

The Budget’s proposal to establish an Infrastructure Risk Guarantee Fund for private developers is a welcome step. By reducing project-related risks and improving access to long-term financing, the initiative will encourage greater private investment in infrastructure. This support will help developers participate more confidently in large-scale urban and regional development projects, leading to faster execution and improved infrastructure delivery quality. 

We see immense potential in India’s next wave of urban growth. With improved roads, rail links, airports, and public utilities, Tier 2 and Tier 3 markets will become increasingly attractive to developers and homebuyers. The government’s capex push, together with mechanisms such as the risk guarantee fund, will provide a strong foundation for inclusive and balanced development across geographies. 

A transformative step

Another landmark announcement is the move to create dedicated REITs to recycle Central public sector enterprise assets. The government has identified nearly ₹10 lakh crore of assets across railway properties, port land, power transmission infrastructure, telecom towers, and other government-owned properties for monetisation. 

This is a transformative step that will unlock value from underutilised public assets and generate capital for new infrastructure investments. The REIT framework has already proven successful in India’s commercial real estate market, providing institutional and retail investors with access to stable, income-generating assets. 

Extending this model to CPSE assets will deepen India’s capital markets, improve asset efficiency, and enhance transparency and professionalism in public asset management. It also opens new avenues for private participation in infrastructure development, creating a virtuous cycle of investment and growth. 

In the real estate and infrastructure sectors, this move will strengthen liquidity, encourage structured asset ownership, and potentially create high-quality investment products offering long-term returns. The ripple effects will be felt across allied sectors, including warehousing, logistics parks, and transit-oriented developments. FDI has received a significant boost through tax holidays, particularly for investments in data centres. 

Overall, the Union Budget has laid down a robust framework for sustained growth, driven by infrastructure expansion and financial innovation. The enhanced public capex allocation, the strategic monetisation of CPSE assets through REITs, and the introduction of supportive instruments such as the Infrastructure Risk Guarantee Fund reflect a clear vision for building modern, connected, and economically vibrant cities across India. 

We welcome these progressive measures. We believe these reforms will not only boost investor confidence but also accelerate the country’s journey towards becoming a global economic powerhouse, with real estate playing a pivotal role in shaping the urban future. 

(The writer is Chairman & MD, Prestige Group )

Published on February 2, 2026