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Union Budget 2026–27: Implications for Real Estate and Infrastructure

The Union Budget for FY27 was presented in a context of steady domestic growth, easing inflationary pressures, and continued emphasis on fiscal consolidation. The Government has opted for policy continuity over big-bang sector interventions, reinforcing confidence in India’s medium-term growth trajectory while maintaining disciplined public finances.

A key highlight of the Budget is elevated capital expenditure of approximately INR 12 trillion, reaffirming infrastructure-led growth as a primary policy lever. Allocations for transport, logistics, and regional connectivity, alongside a focus on City Economic Regions (CERs), are expected to shape urbanisation patterns and economic activity beyond major metropolitan centres. These measures indirectly support real estate demand across residential, commercial, and logistics segments.

From a real estate perspective, the Budget remains largely non-interventionist. There are no new fiscal incentives, tax benefits, or regulatory reforms specifically for real estate, including affordable housing. With unchanged income tax slabs, household affordability sees limited incremental support. Near-term real estate performance will largely depend on infrastructure execution, interest rate trends, and market fundamentals, rather than direct policy stimulus.

Commentary:
Shishir Baijal, International Partner, Chairman & Managing Director, Knight Frank India:
"We welcome the Finance Minister’s announcement on infrastructure development. FY27 Budget signals continuity in India’s macro-growth trajectory, with fiscal discipline and infrastructure focus. While supportive for tier-2 and tier-3 cities, disappointingly, no real estate-specific incentives, especially for affordable housing, have been introduced."

Budget Announcements & Implications