In Budget 2026, Finance Minister Nirmala Sitharaman has announced a significant push for the development of tier-2 and tier-3 cities with a focus on infrastructure, aiming to bolster housing and logistics demand.

The Budget includes a Rs 5,000 crore fund for developing city economic regions (CERs) centered around temple towns and smaller cities. The plan is set to improve connectivity, reduce bottlenecks, and foster growth in these regions, ultimately supporting residential real estate and logistics markets in the medium term. The initiative includes a reform-based financing model to implement plans for these areas over the next five years.

Additionally, the government aims to encourage municipal bond issuances and develop environmentally sustainable transportation systems, including seven high-speed rail corridors. The budget also proposes an Infrastructure Risk Guarantee Fund to boost private sector participation in infrastructure projects.