High capex to sustain growth, pvt investment also coming: Sitharaman, Pg1

Key Highlights:

• The government aims to sustain growth through heavy capital expenditure (capex), allocating Rs 12.22 lakh crore for 2026-27, an 11.5% increase from 2025-26.
• Finance Minister Nirmala Sitharaman noted the private sector is shifting from passive income investments to expanding capacities and new businesses.
• LIC plans to enhance returns from its real estate portfolio, valued at over ₹45,000 crore, by exploring options like REITs, sales, or leasing.
• LIC's Q3 net profit rose by 17% year-on-year to ₹12,958 crore.

Detailed Insights:

• The government's focus on sustaining growth is driving its capex strategy, even as the private sector shows signs of increased investment activity.
• LIC intends to leverage its real estate assets to improve returns for policyholders, focusing on better management and value appreciation rather than outright sales.
• LIC's real estate investments are valued at around ₹15,000-₹16,000 crore on its books, but their market value is significantly higher, with potential for increased rental yields.
• The potential use of REITs by LIC could provide a structured approach to monetizing real estate assets while maintaining a stake in the properties.

Key Concepts Involved:

• Capex: Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, or equipment.
• REITs: Companies that own or finance income-producing real estate across a range of property sectors.
• Monetizing: Converting an asset into cash or cash equivalents through various means, such as selling or leasing.