HYDERABAD: Enhanced infrastructure, a stronger disaster management framework, improved real estate demand and expanded job opportunities are likely for Tier-II and Tier-III cities, with experts and industry stakeholders saying several urban centres could become investment-ready following proposals in the Union Budget 2026-27.
The Centre has proposed a continued focus on infrastructure development in cities with a population of over five lakh that have expanded into growth centres. Officials and sector experts said the large-scale public infrastructure push would benefit cities such as Warangal, Yadagirigutta, Karimnagar, Khammam and Mahbubnagar.
An Urban Challenge Fund (UCF) of ₹1 lakh crore has been proposed to implement initiatives under 'Cities as Growth Hubs', 'Creative Redevelopment of Cities' and 'Water and Sanitation'. In addition, a ₹5,000 crore fund has been earmarked to develop city economic regions (CERs) and temple towns, which is expected to strengthen urban local bodies, officials said.
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Experts, including a municipal administration and urban development (MA&UD) official and a planning official from the Commissioner and Director of Municipal Administration (CDMA), said the combined impact of these measures would support planned growth and improve civic resilience across emerging cities.
Temple towns such as Yadagirigutta, home to the Sri Lakshmi Narasimha Swamy Devasthanam, Warangal, which has the 1,000-Pillar Temple and Bhadrakali Temple, and Bhadrachalam, with the Sree Seetha Ramachandra Swamy Devasthanam, are likely to meet the criteria for central assistance under the new proposals, officials said.
R. Ravi Kumar, president of the Federation of Telangana Chambers of Commerce and Industry (FTCCI), said the Budget signalled sustained development of Tier-II and Tier-III cities. He said proposals for high-speed and semi-high-speed rail connectivity linking Hyderabad with major economic centres such as Bengaluru, Pune and Chennai would have a positive impact. "These projects will enhance labour mobility, supply-chain efficiency, regional integration and offer a sustainable alternative to short-haul flights," he said.
Jayant Kumar, managing director and general manager at Hilti India, said the Budget reinforced infrastructure-led growth, with capital expenditure estimated at ₹12.2 lakh crore. "Investments in highways, metros, railways, airports, power, seven high-speed rail corridors and new National Waterways will significantly accelerate construction activity and project scale," he said.