Housing & Urban Affairs Sector Expects More Clarity And Continuity In Policy Support From Union Budget

By Gautam Debroy

New Delhi: With hardly a few days left for Union Finance Minister Nirmala Sitaraman to present the Union Budget 2026-27 in the Parliament, India’s housing and urban affairs sector is expecting more clarity and continuity in policy support in the coming budget.

“There is a strong need to encourage affordable and mid-segment housing, especially in Tier-2 cities where demand is steadily growing. Easier access to home loans, faster approvals, and infrastructure support around residential projects will help both developers and buyers. A stable and practical approach from the government will go a long way in sustaining momentum and restoring long-term confidence in the sector,” said Pyush Lohia, director of Lohia Worldspace, a New Delhi-based architectural company, to ETV Bharat on Tuesday.

He said that over the past year, the government's focus on housing and urban infrastructure has helped maintain demand in key markets.

“However, developers continue to face challenges such as higher construction costs, delays in approvals, and land-related issues. Financing has also remained tight in some cases. While demand has improved, especially for ready and near-completion projects, execution challenges on the ground still need attention to ensure timely delivery and project viability,” he said.

Budget Should Focus On Housing For All And Smart Urban Development

Stating that the budget should clearly focus on areas like housing for all and smart urban development, Lohia said, “Affordable housing remains a real need, while smart city initiatives should move beyond planning to actual on-ground execution. Better urban infrastructure, public transport, and basic services must grow alongside housing projects. A more integrated approach will improve quality of life and reduce pressure on larger cities.”

Expecting an increase in the allocation for the housing and urban affairs sector, Lohia said that increasing the budget allocation for housing and urban development would be helpful.

“The sector has a direct impact on employment, infrastructure growth, and overall economic activity. Higher funding can support faster project execution, improve urban facilities, and encourage private investment. At the same time, proper monitoring and timely implementation will be important to ensure the funds are used effectively,” he said.

In 2025-26, the Ministry of Housing & Urban Affairs was allocated Rs 96,777 crore, which was 52 per cent higher than the revised estimate of 2024-25.2. This was about 1.9 per cent of the total central government expenditure (0.3 per cent of GDP).

Dikshu C Kukreja, Managing Principal of the CP Kukreja Architects, another New Delhi-based architect firm, told ETV Bharat that the expectation in the budget is that it will continue to recognise urban infrastructure as a core driver of economic productivity, climate resilience, and social equity, not merely a support function.

“Building on last year’s budget allocation to the Ministry of Housing and Urban Affairs, there is an expectation of sustained focus on strengthening urban services, integrated city planning, and long-term infrastructure outcomes rather than fragmented project-based interventions,” Kukreja said.

As of 2011, about 31 per cent (377.1 million) of the country’s population lived in urban areas. A High-Level Committee on Urban Planning, set up in 2022, noted that by 2050, over 50 per cent of the country’s population will be living in urban areas.

Challenge Lies In Moving From Isolated Infrastructure Projects To Integrated City-Making

Kukreja said that a key achievement since the last Budget has been the clear policy acknowledgement of the importance of urban infrastructure, reflected in strengthened programmes such as PMAY (Urban) and continued investments in water, sanitation, and urban services.

“At the same time, a continuing challenge lies in moving from isolated infrastructure projects to integrated city-making, which requires coordinated planning, transport-linked development, and effective public-private partnerships,” he said.

Kukreja said that the budget should continue to highlight integrated urban development, particularly programmes that link housing with mobility, services, and compact urban form.

“Instruments such as the Urban Challenge Fund and the Urban Infrastructure Development Fund are important because they support holistic city-making rather than standalone initiatives. In parallel, as sustainability frameworks mature, greater emphasis on low-carbon construction, adaptive reuse, and material efficiency would strengthen long-term urban outcomes,” he said.

Beyond absolute increases, according to Kukreja, the emphasis should be on strategic and outcome-oriented allocation.

“Continued and potentially enhanced investment is important to support integrated urban development, sustainability-led construction, and early-stage planning and design integration. When professional planning, spatial strategy, and climate thinking are embedded at the budgeting and project conception stage, urban investments deliver stronger economic, social, and environmental returns,” said Kukreja.

Infrastructure And EPC Sector Remain Central To The Country’s Long-Term Economic Growth

Talking to ETV Bharat, Parveen Gupta, Director from Ramacivil India, a Delhi-based construction company, said, “As India approaches the Union Budget 2026, the infrastructure and engineering, procurement, and construction (EPC) sector remains central to the country’s long-term economic growth and competitiveness. Continued focus on capital expenditure in urban infrastructure, industrial corridors, and logistics is critical to sustaining momentum across the construction value chain.”

He said, “We believe the upcoming Budget should prioritise timely fund release mechanisms, faster project clearances, and streamlined contract frameworks to improve execution efficiency. Access to long-term, low-cost financing for EPC players, especially mid-sized contractors, will be crucial in managing working capital cycles and project risk. Additionally, policy support for the adoption of modern construction technologies, prefabrication, and sustainable building practices can help improve productivity and reduce cost overruns. Skill development for on-ground workforce and project management professionals must also be strengthened to meet the scale and complexity of upcoming infrastructure projects. With consistent policy support and execution-focused reforms, India’s infrastructure sector can continue to drive employment, regional development, and long-term economic resilience.”

Manish Bansal, Director, Window Magic, a leading designer and manufacturer of Aluminium and uPVC fenestration products, said that the building materials and fenestration sector stands at a critical inflexion point, closely linked to India’s housing, infrastructure, and urban development ambitions.

“With a growing emphasis on sustainable construction and energy-efficient buildings, there is a strong opportunity to accelerate the adoption of high-quality, Made-in-India uPVC and aluminium window and door systems. We believe the upcoming Budget should focus on rationalising GST structures, incentivising green and energy-efficient building materials, and improving access to long-term, affordable credit for MSMEs across the construction value chain. Fenestration plays a vital role in enhancing thermal efficiency, indoor comfort, and overall building sustainability. Policy support for energy-rated windows, use of recycled materials, and adoption of advanced fabrication and automation technologies can significantly fast-track this transition,” he said.

Stating that equally important is skill development, Bansal said, “Structured training, certification, and upskilling of installers and fabricators will help improve quality, safety, and performance standards across the sector. With the right policy framework, Indian fenestration companies can support sustainable urbanisation, reduce import dependence, and position India as a globally competitive hub for advanced, environmentally responsible building solutions.”

Smart City And AMRUT Mission

The director of Lohia Worldspace, Pyush Lohia, said that the Smart City and AMRUT Missions have laid an important foundation for improving urban infrastructure, service delivery, and quality of life in Indian cities.

“Going forward, the expectation is a sharper focus on on-ground execution, rather than just planning. Cities need faster implementation of integrated mobility, water management, waste treatment, and digital governance systems. There is also a strong need to extend the benefits beyond metro cities to Tier 2 and Tier 3 cities, where urbanisation is accelerating rapidly. Sustainable planning, efficient use of land, and climate-resilient infrastructure should be key priorities in the next phase of these missions,” he said.

Lohia said that the focus should shift towards holistic town planning, including affordable housing, last-mile infrastructure, green spaces, and smart utilities. Strengthening these missions will not only improve urban governance but also create long-term value by making Indian cities more inclusive, sustainable, and future-ready.

Kukreja from CP Kukreja Architects, however, said that for programmes such as the Smart Cities Mission and AMRUT, the expectation is a sharper focus on completion, integration, and long-term operability, rather than the announcement of new pilots.

“Smart city investments should now prioritise strengthening core urban systems such as water security, sanitation networks, public transport, digital governance, and climate-resilient infrastructure, while ensuring that data-driven platforms translate into measurable improvements in service delivery. Similarly, AMRUT must move beyond coverage metrics to outcomes, particularly in water efficiency, wastewater reuse, and equitable access to basic services in both large cities and emerging urban centres,” he said.

Equally important is greater flexibility for states and urban local bodies, supported by predictable funding cycles and stronger technical capacity, so that solutions are contextual rather than one-size-fits-all, Kukreja stated.