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By Atul Monga

As India awaits the Union Budget 2026, our economy stands at a crucial junction. After recovering from the pandemic, regulating inflation and maintaining steady GDP growth, the government’s fiscal choices are expected to sustain momentum and guide household finances and investment sentiment. Budget 2026 is expected to orchestrate a defining role in strengthening economic resilience, improving housing affordability and navigating periods marked by domestic transformation and global uncertainty. 

Remaining resilient amid Global volatility

Despite geopolitical tensions in the neighbouring region and ongoing global volatility, India’s economic performance has remained resilient. GDP growth continues to outperform many major economies, supported by fiscal consolidation, robust tax collections, and targeted capital expenditure. These factors signal confidence and stability. At a time when several developed economies are tightening fiscal and monetary policy, India’s focus on strengthening its domestic market has become even more significant.

Real estate at the heart of domestic growth 

Real estate and housing occupy a central role in India’s growth chapter. Together, they are one of the largest contributors to employment, consumption and urbanisation. Millions of livelihoods are linked directly or indirectly to housing, making the sector a powerful engine for inclusive growth. Unsurprisingly, stakeholders across real estate and housing finance have clear expectations from the upcoming Budget.

Increasing Home Loan tax reliefs

A key demand is enhancing tax relief by increasing the deduction limit on home loan interest from the current Rs 2 lakh to Rs 4 lakh, along with reviewing principal repayment limits under Sections 80C and 80EEA. Such measures would directly reduce the financial burden on homebuyers while increasing demand for housing loans. 

For lenders, this translates into deeper market penetration and healthier credit growth.

Enhancing home affordability through GST rationalisation 

Housing accessibility remains a concern, especially in the affordable housing segment. Construction costs have risen sharply by nearly 40 per cent since 2019, driven by higher input prices and logistics costs. 

Interventions such as GST rationalisation and tax relief on construction materials could provide meaningful relief. Even a modest reduction of 3-5 per cent in taxes on inputs like steel and cement can significantly lower project costs and influence supply decisions, especially where margins are thin.

Housing sector’s contribution to the economy

The real estate sector contributes substantially to GDP and employment. Housing construction also has a strong multiplier effect. For every rupee spent on building homes, an estimated Rs 2 to Rs 2.5 is generated across allied sectors such as steel, cement, tiles, transport, fittings, and home furnishings. For instance, a residential project valued at Rs 50 lakh can create allied demand worth Rs 75 lakh to Rs 1 crore. This ripple effect underscores why housing deserves sustained policy support, including faster approvals and clearer regulatory pathways.

Such measures become even more critical amid global uncertainty, where domestic investment must anchor India’s growth story. The Union Budget should therefore be viewed not merely as a statement of numbers, but as a strategic policy instrument that shapes long-term economic vitality.

Sustained and Inclusive growth 

By strengthening home loan tax benefits, rationalising GST on construction inputs, and incentivising affordable housing supply, the government has an opportunity to democratise home ownership while reinforcing one of the economy’s most impactful sectors. A thoughtful fiscal approach can provide relief to millions aspiring to own a home, boost investor confidence, and reaffirm India’s commitment to inclusive and sustainable growth.

Budget 2026, if executed with vision, can propel the nation forward, balancing economic prudence with aspiration, and ensuring growth opportunities are widely shared.

(The author is CEO & Co-Founder, BASIC Home Loan )