By Sourav Shekhar, New Delhi, Feb 2 (.) The Budget 2026-27 presented on Sunday by the Finance Minister had a clear focus on sectoral reforms and capital infusion in the economy for realising the dream of ‘Viksit Bharat 2047.’
The Budget also had a thrust on urbanisation and the development of cities to make them capable of contributing to the nation’s economic development.
With this clear focus, the Finance Minister proposed City Economic Regions (CER) with for Tier II, Tier III cities, and temple towns.
“Cities are India’s engines of growth, innovation, and opportunities. We shall now focus on Tier II and Tier III cities, and even temple towns, which need modern infrastructure and basic amenities. This Budget aims to further amplify the potential of cities to deliver the economic power of agglomerations by mapping city economic regions (CER), based on their specific growth drivers,” the budget said emphasising on the importance of cities.
An allocation of Rs 5000 crore per CER over 5 years is proposed for implementing their plans through a “challenge mode” with a reform-cum-results based financing mechanism.
Reacting to the city-centric budget focus, Akshay Taneja, CEO of TDI Infrastructure, said, “Metro cities are witnessing saturation, with residential prices rising 25-30 per cent over the last three years, alongside land scarcity, stretched infrastructure, and longer approval cycles. In contrast, Tier-2 and Tier-3 cities now account for 44 per cent of residential land acquisitions and are driving demand beyond metros.”
Taneja welcomed the govt’s step of increasing the infrastructure capex from Rs 11.2 lakh crore to Rs 12.2 lakh crore for FY27, combined Rs 500 cr support and the infrastructure risk guarantee fund.
Welcoming the budget, Ashish Narain Agarwal, Founder & MD of PropertyPistol, said that the union Budget 2026-27 reinforces real estate as a core investment pillar.
He said, “The simplification of NRI property sale transactions is a structural reform that improves liquidity and accelerates cross-border capital inflows. A dedicated Rs 5,000-crore push for Tier-2 and Tier-3 cities, supported by the newly introduced Risk Guarantee Fund, materially reduces execution risk and enhances investor confidence. ”
Coming on international sector reaction, Sunil Pandita, CDO of Nemetschek Group, said, “ Budget 2026-27 sends a strong and timely signal towards building future-ready infrastructure for India. The government’s continued focus on public capital expenditure of Rs 12.2 lakh crore, development of Tier 2 and Tier 3 cities, expansion of dedicated freight corridors, inland waterways, and creation of a robust infrastructure risk guarantee framework will significantly strengthen India’s infrastructure backbone.”
Doubtless, in this budget govt has proposed multiple infrastructure reforms like setting up an infrastructure risk guarantee fund to provide prudently calibrated partial credit guarantees to lenders.
It also put forward the proposal of accelerating the recycling of significant real estate assets of CPSEs through the setting up of dedicated REITs.
Talking on this initiative, Vishal Raheja, Founder & MD, InvestoXpert Advisors said, “Union Budget 2026–27 articulates a more integrated real estate vision, where metro markets continue to anchor institutional stability while temple towns and pilgrimage corridors evolve as structured growth extensions.”
He said that scaling public capital expenditure to Rs 12.2 lakh crore, the government is reinforcing infrastructure intensity across established cities and culturally significant destinations alike.
“Improved connectivity around temple towns will enable a transition from fragmented, seasonal development to planned hospitality districts, mixed-use assets, and organised residential catchments, while metros benefit from deeper liquidity through CPSE asset monetisation via dedicated REITs” he said
The introduction of the Infrastructure Risk Guarantee Fund reflects a mature policy approach that recognises execution risk as a core constraint to quality development, Raheja added.
. SAS KK