The Finance Minister’s Interim Budget 2024 has unveiled a transformative vision for India’s rail infrastructure, focusing on major corridors and metro expansion projects. The announcement includes the establishment of three significant corridors—the port connectivity corridor, the energy, mineral, and cement corridor, and the high traffic density corridor. Additionally, the conversion of 40,000 normal rail bogies into Vande Bharat trains aims to enhance passenger safety, convenience, and comfort.
These initiatives are part of the PM GatiShakti scheme and the National Logistics Policy, backed by a substantial budget allocation of Rs 100 lakh crore. The overarching goal is to decongest the nation’s railway infrastructure by 51% by the fiscal year 2024-25. These infrastructural developments are poised to have a profound impact on India’s real estate landscape, particularly in Tier 2 and Tier 3 cities. By significantly reducing travel times and improving connectivity, these projects are making these regions increasingly attractive for real estate development and investment. An official commented, “The recent infrastructural developments are set to accelerate the transformation of Tier 2 and 3 cities. As migration from Tier 1 cities intensifies, the real estate sector is poised for substantial growth. We are already witnessing increased demand, and with ongoing construction and timely project completions, these cities are on track to become major real estate hubs. The future looks exceptionally promising as we align our strategies to meet the evolving demands in these burgeoning markets.”
The expansion of metro and rail infrastructure is not only creating new job opportunities but also driving up the demand for housing and commercial spaces. Developers are increasingly shifting their focus to Tier 2 and 3 cities such as Lucknow, Chandigarh, Ayodhya, Moradabad, Panipat, Bareilly, Indore, and Udaipur. This shift is attracting multinational corporations (MNCs) and startups, drawn by lower operational costs and the availability of quality life at a reduced expense. The influx of businesses is in turn fuelling demand for office spaces, warehouses, and retail locations.
Significant infrastructure projects are further catalysing this growth. For instance, the Lucknow-Kanpur Expressway, a 62-kilometre six-lane highway, is set to cut travel time from two hours to just 50 minutes. The Lucknow Metro Rail Project is expected to serve over 200,000 commuters daily, significantly easing access to previously hard-to-reach areas. Similarly, Jaipur Metro Phase II will enhance connectivity between residential and industrial zones, providing seamless access to Jaipur Airport.
These developments are fostering an ecosystem ripe for businesses and retail outlets, expected to flourish in the coming years. The presence of MNCs and improved employment opportunities are driving up the demand for both residential and commercial real estate. Consequently, property prices in these cities are projected to appreciate as connectivity and economic activities increase. According to industry experts, Tier 2 and Tier 3 cities present lucrative investment opportunities for developers and end-users alike, contributing to the broader economic development of these regions.
