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Budget 2025: Fostering inclusive growth with fiscal discipline
Budget 2025: Fostering inclusive growth with fiscal discipline

January 22, 2025

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Budget 2025 seeks industry status for real estate, incentives for affordable housing and sops for sustainable development


The Union Budget for 2025-2026 arrives at a crucial juncture, where the government seeks to balance economic growth and fiscal discipline. Budget 2025 is expected to build cornerstones and drive the next phase of elevated growth in Indian real estate. Policy introduction to enhance India’s competitiveness on the global stage is likely to be a focus area. Moreover, transformative measures in the form of incentives & regulatory push to fuel infrastructure and economic development in Tier II cities can help Indian real estate directionally in achieving the ambitious target of reaching USD 1 trillion by 2030. In fact, strong commitment in addressing both immediate and long-term challenges in a rapidly evolving economic landscape will continue to provide a growth blueprint for the next few years.

Indian real estate is likely to build on the strong momentum which was evident throughout the last year. 2024 marked the third consecutive year of record office leasing at 66.4 million sq. ft. across the six top cities, 14% up YoY. Residential sales as well as industrial & warehousing space take-up were also close to all-time high. Institutional investments in Indian real estate too touched a remarkable USD 6.5 billion inflows in 2024, marking a substantial 22% increase from the previous year. Supported by the budgetary announcements, all real estate asset classes are expected to perform well in 2025 as well.

Housing will continue to remain the key focus area:

Residential real estate momentum has been strong for the last few years. Homebuyers and developers expect further impetus from the government in the upcoming budget. Targeted measures can buoy homebuyer sentiment, providing a demand-side boost and simultaneously alleviate pressing developer concerns, providing a supply-side boost. Expectations center on affordability, policy support, and enhancing access to housing finance.

Infrastructure impetus and private participation in manufacturing: 

The government is expected to maintain its strong focus on social, physical, and digital infrastructure creation. Investments in infrastructure and manufacturing capabilities will remain pivotal to sustained economic growth and dispersion of equitable growth centers across the country.


Incentivizing sustainability and green building adoption:

Sustainability adoption can be incentivized in energy generation, transmission, storage and public as well as private transportation. Built environment, especially in housing and manufacturing, must step up significantly in terms of green element adoption. 
 

In conclusion, the upcoming budget can offer directional guidance for accelerated urbanization to support sustainable growth, faster industrialization to drive economic development, and better infrastructure to facilitate urban as well as rural expansion. Infrastructure, construction, and real estate, by virtue of the ripple effect, will continue to support India’s journey in becoming the third largest economy by 2030. Additionally, reforms in the legal & financial sectors, further simplification & standardization of tax reforms and enhancements in compliance have the potential to significantly improve the ease of doing business in the country.

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Colliers India
Sukanya Dasgupta, Head Marketing and Communications - sukanya.dasgupta@colliers.com

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 66 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.5 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors, and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.

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