Budget 2025: Will Govt's Infra Push Continue?

The Union Budget 2025 is expected to prioritize infrastructure and construction as the driving forces for India’s economic momentum, with a strong emphasis on industrial park development, logistics, and urban expansion, as per industry experts. A substantial increase in capital expenditure is critical to bridge existing gaps and propel growth in key sectors.

Budget 2025: Investment In Infrastructure

"The development of industrial parks remains pivotal, given the surging demand for manufacturing and warehousing facilities, especially in Tier 2 and Tier 3 cities." said Siraj Saiyed, Director, Arete Group.

For instance, under the National Industrial Corridor Program (NICP), projects like the Delhi-Mumbai Industrial Corridor and emerging industrial clusters in South Gujarat, such as Bharuch and Surat, have showcased the transformative impact of well-planned infrastructure in attracting investment and generating employment. "Gujarat’s strategic location and robust industrial ecosystem position it as a natural beneficiary of increased budgetary focus on logistics hubs and multimodal connectivity." Saiyed added.

Nirmalya Chatterjee, Country VP & Managing Director, Nemetschek Group, Indian Subcontinent said, “The Union Budget FY26 is expected to prioritize infrastructure and construction as key drivers of economic growth, with a focus on increased investments and technological integration. A projected 25-30 per cent rise in infrastructure outlay could address existing execution lags while creating multiplier effects across sectors. Notably, the National Infrastructure Pipeline (NIP) targets investments worth Rs. 111 lakh crore by 2025, and a continued thrust in FY26 will be essential to bridge the infrastructure gaps, especially in transportation, urban infrastructure, and smart cities." A continued push is required from the government.

Budget 2025: Technology And Infrastructure

In the construction sector, targeted infrastructure investments in roads, ports, and railways could further improve last-mile connectivity, supporting warehousing and e-commerce growth. Knight Frank Report indicates a 35 per cent YoY increase in warehousing demand in cities like Indore and Jaipur, and a growing trend in industrial cities of Gujarat, including Ahmedabad and Vadodara, demonstrating the sector's potential to thrive with government-backed initiatives. Such efforts will not only create economic opportunities but also position India—and Gujarat in particular—as a global manufacturing hub aligned with its ‘Atmanirbhar Bharat’ vision.

Technology integration remains critical for driving efficiency, sustainability, and cost optimization in construction. The adoption of AI, BIM (Building Information Modelling), and IoT in infrastructure projects has already showcased tangible benefits, such as a 20% reduction in project delays and cost overruns.

For instance, smart highways leveraging real-time data and automated monitoring systems have improved asset longevity and safety. Similarly, digital twins and automation in large-scale urban projects can significantly enhance resource management and delivery timelines.

To meet India’s $5 trillion economy vision, investments in sustainable infrastructure and technology-driven construction must align with fiscal policies that encourage private participation and innovation. Budget FY26 has the opportunity to position India as a global leader in infrastructure development through forward-looking policies and tech-enabled execution frameworks.