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.