A quiet shift in growth playbook
Unlike most budgets, this one unexpectedly did not arrive with the drama that accompanies fiscal exercises. There were no sweeping tax giveaways, no sharp pivots designed to ignite short-term consumption, and no attempt to dress long-term policy goals in fashionable buzzwords. Instead, the budget reads like a document written for a different phase of the economic cycle, one in which the emphasis has moved decisively from expansion to stewardship. Possibly because most of the dramatic measures were announced before. These include GST 2.0, nuclear law, labour codes, ban on money-gaming, and others.
At a macro level, the government chose continuity in public investments, with a capital expenditure ofINR12.2 lakh crore in 2026-27. The number is not startling; public capex has been elevated for several years. What distinguishes this budget is not the size of spending, but the way the state intends to participate in growth. The thrust is no longer only on building more assets, but on extracting greater economic value from what already exists. Leverage, not merely build, is the new mantra, which was quoted before too.
This shift is visible in the growing emphasis on asset recycling. One of the consequential elements of the budget is to monetise real estate assets held by state-owned entities through real estate investment trusts REITs). Government land and commercial properties, which remain underutilised for decades, will become financial instruments rather than mere balance-sheet entries. The logic is to convert dormant assets into income-generating vehicles, channel the proceeds into fresh infrastructure, and do so without expanding the fiscal deficit. “The proposal is a strong signal of intent. It reflects a clear move from passive ownership to efficient, market-linked asset management, and (to) unlock long-term value,” feels the Indian REITs Association.
The market response was telling. Listed REITs saw immediate gains after the speech, and reflected investor confidence that the government is committed to deepen the real estate financial markets. The move signals a philosophical change. Earlier, asset monetisation carried the stigma of distress or privatisation by stealth. In this budget, it is presented as a routine tool of capital efficiency, closer in spirit to global practices seen in economies such as Singapore and Australia. But the criticism will re-surface, and trade unions will react.
The same thinking underpins the Infrastructure Risk Guarantee Fund, designed to share project risk with private lenders and developers. Over the past decade, large infrastructure and real estate projects struggled not for lack of intent, but due to high financing costs, risk aversion, and even manipulations. By offering guarantees, the government hopes to crowd in private capital. “This proposal is a welcome move that can help de-risk large projects, and accelerate private-sector participation,” says Rakesh Jain, CEO, IndusInd General Insurance.
This approach has implications for real estate, even though the sector did not find mention in the budget narrative. Many experts feel neglected. “One major disappointment was that there were no major announcements for affordable housing, which has been in free fall since the pandemic. Our data indicates that the share of affordable housing plummeted after the pandemic, from over 38 per cent in 2019 to 26 per cent in 2022 to 18 per cent in 2025,” explains Anuj Puri, chairman, Anarock Group. He adds that the budget delivers limited direct, but various indirect benefits, acting more as a growth catalyst.
By focusing on transport corridors, urban infrastructure, and financing mechanisms, the government wants the property markets to respond organically to improved connectivity, and institutional capital flows. The emphasis on Tier-2 and Tier-3 cities fits within this framework. Instead of stimulating demand through subsidies, the budget seeks to make these regions viable investment destinations by improving infrastructure and lowering financial risk. “Real estate stands to benefit from the targeted emphasis on manufacturing capability enhancement, and infrastructure augmentation via dedicated freight corridors, high-speed rail corridors, nationalisation of inland waterways, and urban clusters,” says Badal Yagnik, CEO & MD, Colliers India.
In doing so, the government acknowledges that real estate has changed since the NBFC crisis, and the introduction of RERA. Housing is no longer a consumption lever to be pulled at will, but a part of a broader urban and financial ecosystem. Growth, in this model, is expected to be steadier, less speculative, and more closely tied to long-term employment and infrastructure creation. For example, according to an expert, “The pertinent focus on tourism, training, skill development, and creation of infrastructure will have a positive domino effect through hotels, guest houses, second homes, and primary housing.”
Perhaps the most telling omission in the budget is the absence of a direct consumption stimulus. Income tax slabs remain largely unchanged, and there is no significant push to boost discretionary spending. This contrasts with the expectations of fiscal populism. The choice may be deliberate. By giving priority to investment-led growth, the signal is that there is confidence that capital formation will generate jobs, and expand incomes. “With a larger push towards infrastructure, the aim is to provide fresh impetus to employment generation across sectors,” says Santosh Agarwal, CEO, Paisabazaar.
Budget 2026 reflects a more settled phase of economic management. The emphasis is on balance-sheet health, institutional mechanisms, and market-based solutions. Growth is no longer framed as an outcome of state spending, but as a function of how effectively public and private capital can be aligned. The fact remains that the financial numbers for 2025-26 may be dodgy because of too many benefits to the consumers. Revenues as per revised estimates are lower than the budgeted ones, which drove down expenditure, including capital spending, to manage the fiscal deficit within the budgeted estimate.
For businesses and investors, the budget offers few headline incentives but greater clarity. Infrastructure developers see improved risk-sharing frameworks. Real estate players encounter an environment that rewards institutional scale over speculative churn. Tech firms are offered long-term signals rather than short-term sops. Capital markets gain new instruments, and deeper participation from public assets. Even administrators will benefit from the changes in the municipal bonds, which will provide them with more money. The city economic regions may improve the state of smaller cities.
In that sense, Budget 2026 is less a statement of intent and more a reflection of where India believes it stands today, and where it needs to go. It may stem from a false, or true, sense of confidence that growth is on track, despite the global disruptions, inflation is low, the rupee will find its natural level, exports are up, and what is needed is to push policy into a new gear that is not necessarily to achieve speed but to get on to the right road, and go in the right direction.
