Budget 2026 Expectations LIVE: Capex Seen Gaining Pace in FY27 as Demand Improves, Inflation Eases

Harsh Jagwani, Managing Director, Notandas Realty, said, "Budget 2026 will be an opportune time for the Indian government to continue the growth momentum for the real estate sector, brought about by last year’s reforms."

He stated that with the growing demand for mid-premium and luxury homes, policies should focus on digital land registration, streamlined approvals through a Single Window Clearance System, and regulatory reforms under RERA to lower transaction risk. Incentives for housing finance, institutional investments, and Global Capability Centers will boost commercial and premium residential real estate. This will establish India as a global center for business and modern urban living.

Coworking spaces are emerging as a key feature of India’s commercial real estate, reflecting a broader shift towards flexibility, collaboration and hybrid work models. With start-ups and corporates relying increasingly on shared spaces, the sector seeks targeted support in the upcoming Union Budget.

"We request the government to introduce a concessional, slab-based GST rate for coworking services, particularly for start-ups and small businesses, as it would meaningfully improve cash flows and accelerate entrepreneurship," said Manas Mehrotra, Founder, 315Work Avenue.

Mehrotra also urged that blocked input tax credits on interior fit-outs should be removed and TDS under Section 194AB rationalised. Easier access to institutional finance would improve working capital efficiency, support sector growth and enable expansion into non-metro cities.

Shwetank Singh, Executive Director, Chalet Hotels Limited, said, "As we approach the 2026 Budget, India's hospitality sector waits with measured optimism."

While the industry has created 46.5mn jobs and is expected to support 64mn by 2035, the absence of infrastructure status limits access to soft financing, lower utility rates and reasonable property taxes. Singh pointed out that adding tourism to the concurrent list would improve policy coordination between the center and states.

He added that such changes would enable better destination development, and if implemented, could boost growth, bringing the sector closer to contributing $1trn to GDP.

Due to strong demand, growing aspirations and encouraging government initiatives, the Indian real estate market has proven remarkably resilient. Developers anticipate reforms that will benefit the industry and homebuyers ahead of Budget 2026.

"We also hope that the government will continue to focus on more infrastructure development as it will help drive housing demand across the country," said Ramani Sastri, Chairman & MD, Sterling Developers Pvt Ltd.

Expanding affordable housing, first-time buyer interest subsidies, GST rationalisation, quicker approvals and industry status are examples of initiatives that could strengthen the economy, spur growth and support related industries.

Dr Sangeeta Srivastava, Executive Director, Godavari Biorefineries Ltd (GBL), said that having successfully achieved E20 blending ahead of schedule, a productive surplus is now being faced by India, which requires urgent demand-side policy innovation.

She added that Budget 2026 should focus on incentivising E100-ready infrastructure and accelerating the mandate for Sustainable Aviation Fuel (SAF) to absorb this additional ethanol capacity, and that a strategic shift toward ethanol-to-chemicals and high-value bio-based derivatives is considered essential.

"This budget must provide the fiscal framework to transition from fuel blending to a global leadership role in the Sustainable Chemical economy,” she stated.

Capital spending is likely to pick up pace in FY27 as firmer domestic demand, rising capacity utilisation and softer inflation reinforce the outlook for a sustained investment cycle, economists told Outlook Business, even as the government is expected to continue prioritising public expenditure in the upcoming Union Budget.

“Capacity utilisation should improve further, particularly in infrastructure,” said Madan Sabnavis, Chief Economist at Bank of Baroda. He added that reforms announced in income tax and the Goods and Services Tax (GST) in the previous Budget reduce the need for aggressive or outsized capital spending this time.

Click Here to Read More

India, now the world’s fourth-largest economy, is set to remain in a ‘goldilocks’ phase, supported by strong growth, low inflation, a resilient banking system and ongoing reform initiatives that are expected to sustain the momentum seen in 2025, according to a government note released earlier this month.

In line with its focus on ease of living and ease of doing business, the BJP-led Union government’s upcoming Budget is likely to announce measures to boost capital expenditure and crowd in private investment, positioning India as an attractive destination amid tariff-related and geopolitical uncertainties.

Economic indicators remain supportive. Real GDP growth strengthened sequentially, reaching 8.2% in the second quarter of 2025–26, while retail inflation fell below the Reserve Bank of India’s lower tolerance band of 2% towards the end of the year.

“The current macroeconomic environment reflects a rare ‘goldilocks period’ of high growth and low inflation,” the note said.

Click Here to Read More

The Centre is considering setting up a ₹25,000 crore risk guarantee fund to support infrastructure projects, according to a Mint report citing sources. The proposed safety buffer is aimed at easing funding constraints and unlocking stalled projects amid rising delays, cost overruns and elevated borrowing costs.

The fund would partially guarantee loans extended by banks and financial institutions, helping reduce lender risk and improve credit flow to the sector.

Click Here to Read More

The Ministry of Finance and Corporate Affairs is reportedly considering a proposal to roll out a large one-time microfinance credit guarantee scheme for non-banking financial companies (NBFCs) in the upcoming Union Budget. The move is aimed at strengthening NBFC–microfinance institutions (NBFC-MFIs) by improving access to bank funding and easing liquidity pressures, while ensuring continued lending to low-income households.

According to a report by Mint, the proposed scheme is expected to be larger than the ₹7,500 crore credit guarantee offered during the pandemic and is likely to be managed by the state-run National Credit Guarantee Trustee Company (NCGTC).

Click Here to Read More

Stock broking major JM Financial is expecting a possible increase in excise duty on petrol and diesel in the Budget 2026, a key policy move that could significantly risk India's downstream oil marketing companies (OMCs).

In its recent reports, the brokerage firm highlighted two main themes, first, that downstream OMCs like Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL) may face fiscal pressure if the government uses excise duty to boost revenue.

Ahead of the Budget, attention is firmly on Finance Minister Nirmala Sitharaman, with expectations running high after the income tax rebate was extended to ₹12 lakh in the last Union Budget. However, following GST rationalisation to support household spending in late 2025, economists see limited headroom for big-ticket announcements.

Experts believe the Budget will prioritise targeted interventions over large, headline-driven capital expenditure. From a market perspective, focus is expected to remain on fiscal and policy support measures, defence, MSMEs, railways and infrastructure, and the transition towards greener growth.