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Industry Expectations for Construction & Infrastructure Reforms from 2025 Budget

With the Union Budget 2025-26 set to be announced on February 1, the construction and infrastructure sectors are anticipating policy measures to address immediate challenges and drive long-term development. As these sectors play a significant role in economic growth, stakeholders are hopeful for reforms that enhance project financing, accelerate infrastructure development, and support ongoing urban and rural expansion. Experts view this budget as an opportunity to provide a clear direction for sustained growth in construction and infrastructure.

Industry Leader’s Expectations

Mr. Pankaj Sharma, Managing Director at K2 Infragen

“To achieve the vision of a $7 trillion economy by 2030, the upcoming Union Budget must prioritize infrastructure development while maintaining fiscal discipline. Key initiatives like the National Infrastructure Pipeline (NIP) and PM Gati-Shakti National Master Plan should lead the agenda, with increased investments in railways, highways, power transmission, water, and urban infrastructure. Affordable housing and the Jal Jeevan Mission (JJM) also require focused attention to sustain growth.

Boosting public-private partnerships (PPP) will be crucial. Enhanced viability gap funding (VGF) and supportive policies can drive projects in ports, airports, and renewable energy. Expanding asset monetization programs is equally vital to attract private investments and fast-track infrastructure creation.

Simplified tax structures with lower rates for infrastructure projects, including green energy, and favorable regimes for carbon credits and offshore wind projects, can provide the sector with a significant boost.”

Mr. Venkatesh Gopalakrishnan, Director Group Promoter’s Office, MD & CEO – Shapoorji Pallonji Real Estate (SPRE)

“We anticipate Budget 2025 to introduce measures that strengthen the real estate sector. Revising tax slabs for middle-income earners and tackling raw material price volatility can help stabilize construction costs and housing prices, making homeownership more attainable. Redefining affordability based on regional needs and encouraging green building practices will make housing policies more inclusive and sustainable. Implementing single-window clearance will enhance efficiency and attract investments. Additionally, a reduction in repo rate and stamp duty could further drive housing demand.

A forward-looking budget that supports innovation and sustainability can accelerate the sector’s growth and contribute to broader economic stability. We remain hopeful for initiatives that enable long-term growth and create a resilient future for the industry.”

 Shreya Anand, Director, Vedaanta Senior Living

“India is at a critical juncture in addressing the needs of its growing senior population. While initiatives like the PM-JAY scheme have provided significant healthcare benefits, there remains a glaring gap in senior-focused public infrastructure. At Vedaanta Senior Living, we see the transformative impact of a well-supported environment for seniors every day, and we believe more can be done to scale such solutions nationwide.  

One key area for policy reform is GST exemptions. While regular associations enjoy tax exemptions for incomes up to ₹7,500, senior living communities face higher costs due to the essential medical and dietary services they provide. Raising the GST exemption threshold for senior residences would not only make these services more affordable but also foster growth in a sector that is crucial for our nation’s future.  

With seniors projected to make up nearly 20% of India’s population by 2050, the time to invest in their well-being is now. Strengthening public infrastructure and offering supportive tax policies will pave the way for a society that truly honors its elders.

Mr. Routhu Nagaraju, Chief Executive Officer,  Experion Developers

“With the Union Budget of 2025-26 approaching, real estate developers and other industry stakeholders have expressed their hopes for regulations and reforms that will help address the housing needs of the country and boost overall economic growth. In my opinion, it is time to take note of the changing needs of the society and align its policies in accordance with the same. A special tax dispensation may be considered to encourage organised development of rental housing, student housing, dormitories for industrial workers. Tax incentives will bring in much needed focus onto these segments and attract institutional capital enabling large scale development of alternate housing to address a growing need of the society.   

Another important step would be to align the pricing cap of Rs. 45 lakhs for affordable housing, set in 2017, with the current market reality so that the benefit of lower GST rate can be availed by those looking to buy affordable housing. Considering the average inflation over the last seven years, affordable housing definition may be amended to cover houses priced up to Rs. 80 lakhs.   

The forthcoming budget is seen as a pathway to sustainable growth. We look forward to the budget proposals with optimism.”

Mr. Mohit Goel, Managing Director, Omaxe Ltd, India’s leading real estate brand

“The real estate sector stands at a pivotal juncture, and the 2025 budget must provide the impetus to make housing accessible and sustainable for growth.  We are hoping that the government will take measures to help the sector in unlocking its true potential. The government should prioritise fiscal incentives for affordable and mid-segment housing, including tax benefits for developers and buyers and enhanced funding under PMAY. This would not only help the sector maintain its current momentum but also help meet the demand for quality homes. Lower interest rates would make home loans more affordable, encouraging more people to buy homes. Income tax relief would also be beneficial, increasing disposable income and supporting greater spending on real estate. Additionally, infrastructure development in Tier 2 and Tier 3 cities is critical to fostering balanced growth and easing the pressure on metro cities. Finally, reducing excise duty on fuel would help reduce construction costs, which would, in turn, keep housing prices stable. We hope the upcoming budget will address these needs, creating a more sustainable path for the sector’s growth.”

Mr. Aditya Kushwaha, CEO and Director, Axis Ecorp, 

“Last year, the real estate sector witnessed strong growth driven by rising urbanization and increasing demand across affordable, mid-income, and luxury segments. We are hoping that the upcoming budget will prioritise tax relief for homebuyers and streamline regulations. Additionally, introducing tax benefits for those investing in REITs focused on premium commercial or residential assets would encourage more investments and boost the sector. We are also hoping that the government will continue to invest in infrastructure projects. These measures will help the housing sector remain a key contributor to economic progress.  

Granting industry status to the real estate sector has been a long-standing demand, and we remain hopeful it will finally be addressed this year. Such a move has the potential to significantly stimulate growth, benefiting numerous ancillary industries, driving job creation, enhancing skill development, and amplifying overall economic activity .”

Ms. Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women’s Wing

“Property prices and construction costs have consistently increased over the years.  In this scenario, increasing the tax exemption limit to Rs 5 lakh aligns perfectly with the evolving needs of homebuyers and the market. It will help ensure housing remains accessible and attractive for buyers. This could provide the kind of relief homebuyers need to make owning a home a little more within reach. Another important change that we are looking forward to is the GST input tax credit. Right now, the tax burden on developers is high, and a small adjustment could help ease that pressure. If developers feel less of a strain, it could mean more affordable properties in the market. These steps could make a difference in making housing more accessible for everyone,” Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women’s Wing.”

Mr Piyush Bothra, Co-Founder and CFO, Square Yards

“As we enter 2025, real estate stands poised for crucial new reforms to drive its growth. A key priority is adjusting the affordable housing price cap beyond the current Rs. 45 lakhs to align with rising development costs in metropolitan areas. Another significant expectation is to increase the tax deduction limit on home loan interest from Rs. 2 lakhs to Rs. 4 lakhs, providing tangible relief to aspiring homeowners. Reduced GST rates will further enhance market vibrancy, creating a more accessible pricing structure. Finally, introducing tax incentives under Section 80C for investments in REITs can promote real estate as an attractive tax-saving avenue, drawing new investors to the sector. These measures have the potential to catalyse substantial demand, ensuring a stronger, more sustainable real estate market in the years ahead.”

Mr Shrinivas Rao, FRICS, CEO, Vestian 

“Elevated borrowing costs amid sticky inflation led to a sharp rise in construction costs in 2024. These costs are expected to further increase on the back of supply chain disruptions due to increasing geopolitical conflicts. Amid rising costs and a demand slowdown, the real estate sector’s expectations from the upcoming budget are at an all-time high. Rise in tax exemption limit for housing loans, granting ‘Industry’ status, amendments in GST input tax credit regulations, boost in affordable housing sector by broadening the definition, and easing liquidity by policy reforms are some of the broad expectations from the upcoming Union Budget 2025-26.”

Mr Badal Yagnik, CEO, Colliers India

Budget 2025 is expected to build cornerstones to drive the next phase of elevated growth in Indian real estate with an ambition to reach USD 1 trillion by 2030. Transformative measures in the form of incentives & favourable polices to fuel infrastructure, economic and real estate development in tier 2 cities, technology-led infrastructure & growth corridors and incentivizing green building adoption will draw significant domestic and foreign institutional capital. Accordance of ‘industry’ status to real estate, standardization & extension of affordable housing benefits, streamlining and rationalization of GST levy across segments possess significant potential to drive heightened real estate activity across segments and geographies with better access to capital and single window clearance. While the simplification of tax regimes across individuals & corporates will continue to bring in efficiencies, drive entrepreneurial capital, retail investment; a concerted coordination between the country’s legal and financial framework will surely aid in improving ease of doing business.

 Mr. Y. R. Nagaraja, Managing Director of Ramky Infrastructure Ltd.

“In the last Union Budget, the government allocated Rs 11.1 lakh crore towards infrastructure development, significantly driving growth in the sector. To build on this momentum, we expect a further 30% increase in infrastructure spending to Rs 18 lakh crore in the upcoming budget. This boost would be pivotal in moving closer to the World Bank’s projection of requiring $840 billion—approximately $55 billion annually—over the next 15 years to meet the demands of India’s rapidly expanding urban population.

The previous budget placed a commendable emphasis on sustainable urban development, with significant initiatives such as sewage waste management and treatment projects in over 100 cities. We urge the government to continue focusing on the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which plays a critical role in improving the quality of life for the underprivileged by providing essential civic amenities like water supply, sewerage, and urban transport. The Rs 8,000 crore outlay in the last budget was a step in the right direction, and we hope to see enhanced allocations this year.

Additionally, partnerships that drive sustainable infrastructure projects must be explored, along with incentives for the use of eco-friendly construction materials such as steel slag and recycled plastic waste for road development. Building on previous initiatives like the Rs 1.5 lakh crore interest-free loans to states for infrastructure expansion and the Phase IV launch of PMGSY to provide all-weather connectivity to 25,000 rural habitations.

We also propose the introduction of a sustainability rating framework to assess infrastructure projects on their long-term environmental impact and viability. Such a rating system would not only ensure sustainable development but also highlight areas of improvement for project optimization. A continued focus on holistic urban development schemes and the Smart Cities Mission will be crucial in shaping India’s infrastructural landscape for a sustainable and inclusive future.”

Mr. Amit Sharma, MD & CEO, Tata Consulting Engineers

“Tata Consulting Engineers (TCE) views the FY 2026 Budget as a key opportunity to advance India’s infrastructure, energy transition, and technological innovation. We expect continued capital investment in water supply, metro systems, and climate-resilient infrastructure, along with support for Smart Cities, Transit-Oriented Development, and affordable housing.

A stronger push for renewable energy, including offshore wind, green hydrogen, and small modular reactors (SMRs), coupled with grid expansion, viability gap funding, and single-window approvals, will accelerate the energy transition. Strengthening nuclear energy through Bharat Small Reactors (BSR) and a contingency reserve for disaster management will bolster long-term energy security.

Modernising ports, promoting shipbuilding, and developing industrial clusters for semiconductors, EV batteries, and clean technologies will boost self-reliance and export competitiveness. Coastal industrialisation and inland logistics hubs will further drive efficiency and reduce costs. Smart infrastructure, digital twins, AI-driven mining, and integrated water management will be crucial for sustainability.

Skill development, gender diversity in engineering, and incentives for public-private partnerships will help bridge workforce gaps. Enhanced climate finance, including green bonds, R&D funding for energy storage, and low-interest loans for critical projects, will support India’s journey towards decarbonisation, innovation, and global leadership in engineering and consultancy.”

Manish Bansal, Director & CEO, Window Magic

“I look forward to the 2025 Financial Budget with optimism, expecting certain measures to drive sustainable growth and infrastructure expansion. The government should bring in more incentives for green building initiatives, streamline GST on construction materials, and enhance support for affordable housing projects. Furthermore, the budget should focus on boosting the sector’s efficiency and output by introducing provisions to drive investment in urban infrastructure and simplify regulatory processes. With this the economic growth would propel creating a more sustainable and resilient landscape for the future of the companies within the real-estate sector.”

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