Budget 2026: Government bats for monetisation of real estate assets of CPSEs via REITs

Union Budget 2026 | Union Finance Minister Nirmala Sitharaman on Sunday proposed to accelerate recycling and monetisation of significant real estate assets of CPSEs (central public sector undertakings) through the setting up of dedicated REITs (Real Estate Investment Trusts).

“Over the years, REITs have emerged as a successful instrument for asset monetization,” the finance minister said in her Budget speech.

The proposal is expected to give a big boost to the Centre’s asset monetisation plans. “The establishment of dedicated REITs to accelerate the recycling of significant real estate assets of CPSEs is also a welcome step,” said Parveen Jain, President, NAREDCO.

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“It will promote efficient utilisation of capital and assets while creating new investment opportunities for the real estate sector. With the government’s continued support for asset monetisation, this Budget creates a stable, reliable, and conducive environment for real estate development,” added Jain.

To strengthen the confidence of private developers regarding risks during infrastructure development and construction phase, the finance minister proposed to set up an Infrastructure Risk Guarantee Fund to provide “prudently calibrated partial credit guarantees” to lenders.

For developers, the proposed Infrastructure Risk Guarantee Fund will help mitigate project risks during the development and construction phases, said Jain. “This will enhance lender confidence, facilitate easier access to finance, and support timely project execution.”

Bharat Thakran, chairman and managing director of Goa-based GHD Group, said the government’s commitment to higher capital expenditure and the introduction of an Infrastructure Risk Guarantee Fund will strengthen lender confidence and fast-track infrastructure creation across the country.

Sitharaman also highlighted the government’s plans to develop infrastructure in cities with over 5 lakh population (Tier II and III), which have expanded to become growth centres. “During this past decade our government has undertaken several initiatives for large-scale enhancement of public infrastructure including through new financing instruments such as Infrastructure Investment Trusts (InVITs) and REITs and institutions like NIIF and NABFID,” the finance minister said.

Cities are India’s engines of growth, innovation, and opportunities, the finance minister said. “We shall now focus on Tier II and Tier III cities, and even temple-towns, which need modern infrastructure and basic amenities. This Budget aims to further amplify the potential of cities to deliver the economic power of agglomerations by mapping city economic regions (CER), based on their specific growth drivers. An allocation of ₹ 5000 crore per CER over 5 years is proposed for implementing their plans through a challenge mode with a reform-cum-results based financing mechanism,” the FM said.

The finance minister’s decision to increase capital expenditure from ₹11.2 lakh crore to ₹12.2 lakh crore for FY 2026–27, with a special focus on cities with a population of over five lakh, is a far-sighted move towards balanced urban development, said NAREDCO’s Jain. “This will act as a strong booster for real estate activity in Tier-2 and Tier-3 cities and accelerate urbanisation beyond metropolitan areas,” he added.