THEBUSINESSBYTES BUREAU

NEW DELHI, JANUARY 21, 2026

As the Union Budget 2026–27 draws closer, expectations are rising that the government will deploy a carefully calibrated mix of fiscal prudence and growth-oriented reforms to reinforce India’s economic momentum amid persistent global trade frictions and geopolitical uncertainties. According to Colliers India, the upcoming Budget could emerge as a decisive catalyst for long-term structural growth by prioritising housing affordability, infrastructure expansion, domestic manufacturing, sustainability and technology-led innovation.

Housing and infrastructure are expected to remain at the heart of the government’s growth strategy, given their strong multiplier effect on employment, consumption and urban development. A revisit of the affordable housing framework, coupled with improved access to credit, could unlock sustained residential demand across urban markets where current price realities have outgrown existing policy thresholds. Measures such as the re-introduction of tax incentives for developers, extension of interest subsidy schemes for first-time homebuyers and rationalisation of GST could provide a dual boost to both demand and supply, while addressing the persistent demand-supply mismatch in the affordable housing segment.

India’s real estate sector enters the Budget season from a position of strength. In 2025, office leasing crossed 70 million square feet, industrial and warehousing demand remained robust, and residential markets showed resilience despite cost pressures. Institutional investments touched USD 8.5 billion, reflecting sustained investor confidence. With end-user demand across office, residential, industrial, retail and hospitality segments hovering near historical peaks, targeted policy support in the Budget could further deepen market participation and strengthen long-term growth prospects.

Infrastructure-led development is expected to continue as a core pillar of economic policy, with higher allocations likely for logistics networks, freight corridors, railways, ports and multimodal transport hubs. Such investments are critical not only for reducing logistics costs and enhancing supply-chain efficiency, but also for unlocking new growth corridors across Tier II and III cities. Enhanced viability gap funding, faster clearances and clearer regulatory frameworks could accelerate project execution and crowd in private capital, reinforcing infrastructure’s role as a backbone of industrial and real estate expansion.

Manufacturing and MSMEs are also poised to benefit from renewed policy thrust. Extension of the concessional corporate tax regime for new manufacturing units, stronger R&D support, relief on customs duties for critical raw materials and incentives for capital goods manufacturing could strengthen India’s position in global value chains. For MSMEs, measures aimed at improving cash flow discipline and easing liquidity pressures could play a vital role in sustaining employment and grassroots economic activity.

Technology, artificial intelligence and digital infrastructure are expected to feature prominently in the Budget’s forward-looking agenda. Colliers India notes that policy support for data centre parks, AI economic clusters and high-performance computing infrastructure could significantly enhance India’s innovation ecosystem. A cohesive national AI and data governance framework, combined with investments in digital skilling, robotics and automation, could boost productivity across manufacturing and services while positioning India as a competitive global hub for data-driven industries.

Sustainability and climate resilience are likely to be another defining theme. Increased incentives for renewable energy, energy storage systems, green buildings and clean construction practices could help align economic growth with India’s net-zero commitments. Policy support for domestic manufacturing of clean energy components, coupled with the potential creation of a dedicated green finance institution, could mobilise long-term capital for renewable energy, electric mobility and sustainable urban development.

Urban development initiatives are also expected to receive a renewed push through higher allocations for rejuvenation programmes, transit-oriented development and smart city missions. Such measures can unlock land potential, promote spatially balanced growth and encourage private investment across real estate asset classes, supporting the evolution of future-ready Indian cities.

Overall, Colliers India believes that Union Budget 2026 has the potential to strike a fine balance between fiscal discipline and growth imperatives. By reinforcing housing, infrastructure, manufacturing, sustainability and technology as key growth levers, the Budget could not only support near-term economic momentum but also lay a strong foundation for resilient, inclusive and expansionary growth in the years ahead.