In the Union Budget 2026-27, finance minister Nirmala Sitharaman announced a major push to accelerate asset monetisation, proposing the creation of dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs). The move is aimed at unlocking value from large, underutilised government-owned real estate and recycling capital into fresh infrastructure development.

Presenting her 9th consecutive budget in Parliamenet Sunday, Sitharaman highlighted REITs as a critical mechanism for monetising existing infrastructure and real estate assets, enabling the government to shift from ownership to efficient asset management. Dedicated CPSE REITs are expected to fast-track the recycling of capital locked in mature assets while offering market-linked investment opportunities to a broader investor base, she said.

Commenting on the announcement, Raghav Madan, director, Deloitte India, said the proposal signals a clear shift in the government’s approach to public asset management.

“The Budget’s announcement on dedicated REITs for CPSE assets is a strong signal of intent. It opens the door for structured monetisation of underutilised government real estate while creating an opportunity for wider public participation through transparent, market-linked investment instruments.”

The Budget underscored the growing role of REITs and Infrastructure Investment Trusts (InvITs) as key instruments for funding public infrastructure, even as the government raised overall infrastructure capital expenditure by 9% to ₹12.2 lakh crore for FY27.

The Budget continued its expansionary stance on infrastructure financing through REITs and InvITs, especially in urban centres. With a sustained focus on cities with populations above five lakh, the policy framework creates fresh opportunities for commercial, transport and public infrastructure assets to be housed under REIT and InvIT structures, including in Tier II and III cities.

The government’s push comes on the back of key regulatory changes aimed at improving liquidity and participation in listed yield instruments. From January 1, 2026, investments in REITs have been reclassified as equity-related instruments for mutual funds and specialised investment funds, a move expected to boost flows and enable greater index inclusion.

In addition, the minimum subscription amount for privately placed InvITs has been reduced to ₹25 lakh from ₹50 lakh, widening access for high-net-worth investors and improving depth in the private InvIT market.

Market participants also see the renewed focus on InvITs and REITs as structurally positive for India’s capital markets. Divam Sharma, co-founder and fund manager at Green Portfolio PMS, said investor acceptance of listed yield instruments has been steadily improving.

“InvITs and REITs have gained relevance among Indian investors as vehicles for stable, long-duration cash flows. The government’s continued focus is timely, as these structures play a critical role in unlocking capital from mature infrastructure and real-estate assets while expanding the pool of investible opportunities for domestic and global investors.”

Sharma added that CPSE-led monetisation is particularly constructive for the next phase of infrastructure development.

“Recycling capital locked in operating assets into new projects improves balance-sheet efficiency and accelerates infrastructure build-out. The sharp increase in infrastructure allocation, combined with an emphasis on private-sector risk sharing, should help crowd in private capital and reduce execution risks.”