ET Wealth Cover Story: Owning Land – Goldmine or Minefield?
(ET Wealth | 22–28 December 2025 | Cover Story)
Core Thesis
Land ownership in India can generate outsized long-term returns, but it carries disproportionate legal, liquidity, and execution risks compared with other asset classes. Returns are highly outcome-dependent, not average-driven.
Why Investors Are Attracted to Land
Asymmetric upside: Well-located plots can deliver multi-bagger returns over long holding periods.
Scarcity premium: Unlike apartments, land supply is finite.
Infrastructure-led appreciation: Roads, industrial corridors, and urban expansion can sharply reprice land.
No depreciation: Land does not physically deteriorate like buildings.
The Major Risks Highlighted
Title and ownership disputes
Incomplete or contested titles are common.
Litigation can freeze value for years or decades.
Liquidity risk
Exit is uncertain and often slow.
Distress sales can wipe out paper gains.
Regulatory uncertainty
Zoning changes, land-use conversion delays, and local authority approvals can derail plans.
Information asymmetry
Retail investors are disadvantaged versus developers and local intermediaries.
High transaction friction
Stamp duty, registration charges, legal costs, and brokerage materially reduce net returns.
Case-Based Contrast (as highlighted in the article)
Successful investor profile
Long holding period
Infrastructure-aware location selection
Extensive legal due diligence
No urgency to exit
Unsuccessful investor profile
Emotional purchase (retirement home / aspiration)
Inadequate title verification
Dependency on future approvals
Forced into prolonged litigation
Due Diligence Checklist Emphasised
Clear and marketable title
Verified land-use classification
Approved access roads
Absence of encumbrances or prior claims
Local development plan alignment
Independent legal scrutiny (not broker-referred)
Return Reality Check
Returns are lumpy, not linear.
A few winners skew perception; many investments stagnate.
Time horizon must be 10+ years for meaningful outcomes.
Not suitable for capital that may be needed urgently.
Strategic Takeaways for Investors
Land should be a satellite allocation, not a core portfolio asset.
Best suited for investors with:
High risk tolerance
Long investment horizon
Legal and financial staying power
For most investors, REITs, equity, or diversified real estate funds offer superior risk-adjusted returns.
Bottom Line
Land can indeed be a goldmine, but only when combined with patience, rigorous due diligence, and structural tailwinds. For many investors, it is more often a minefield—where returns are hostage to legal clarity rather than market growth.
In the context of the Mumbai Mint Primer from December 22, 2025, India is entering a period of significant strategic diversification in its global trade relations, primarily driven by punitive tariffs from the United States and a desire to reduce dependence on any single nation. The sources highlight several key developments regarding bilateral trade agreements (BTAs) and free trade agreements (FTAs) that are currently shaping India's economic trajectory.
The India-Oman Comprehensive Economic Partnership Agreement (CEPA)
Last week, India signed a landmark Comprehensive Economic Partnership Agreement (CEPA) with Oman during Prime Minister Narendra Modi’s visit. This deal is viewed as a catalyst for underperforming trade, which had dropped from a high of $12.4 billion in 2022-23 to $10.6 billion in FY25.
- Tariff Liberalization: Oman will provide zero-duty access to 99% of India’s exports by value, covering sectors such as gems and jewellery, textiles, leather footwear, engineering goods, and pharmaceuticals.
- India’s Reciprocity: India has agreed to reduce or eliminate tariffs on 78% of its tariff lines, though it has maintained strict protections for sensitive domestic sectors, including dairy, coffee, tea, gold, and silver.
- Strategic Stepping Stone: This agreement, following a previous deal with the UAE, is intended to pave the way for a broader trade deal with the six-nation Gulf Cooperation Council (GCC).
Ongoing Negotiations and the "Year of FTAs"
The sources indicate that 2025 has been a pivotal year for Indian trade diplomacy, with multiple major agreements nearing completion or operationalization.
- New Zealand: India and New Zealand are close to inking an FTA after a ten-year hiatus in talks. This would be India's third FTA of 2025, following deals with the UK and Oman. India continues to protect its dairy sector in these talks but may offer concessions on other non-competing items.
- United Kingdom & European Union: The India-UK trade deal signed in May 2025 is expected to be operationalized soon. Simultaneously, negotiations with the EU have been reactivated and are reportedly in the final stages.
- United States: Despite "great" periodic conversations between Prime Minister Modi and President Trump, a formal trade deal remains elusive. The US seeks to reduce its trade deficit by increasing agricultural and energy exports to India, but the opening of the Indian farm sector remains a firm "red line" for New Delhi.
The Impact of Global Protectionism
The push for new trade agreements is set against a backdrop of rising US protectionism, characterized by a sweeping 50% tariff on Indian goods entering American markets. These tariffs have created significant uncertainty, weighing on investment sentiment and the Indian rupee. Consequently, India is aggressively pursuing alternative markets to maintain its export momentum, particularly in sectors like electronics and smartphones, which have shown a "fall-and-recovery" pattern following initial tariff shocks.
Analogically, India’s trade strategy is like an architect reinforcing a building with multiple supporting pillars; by securing several bilateral agreements simultaneously, the nation ensures that if its primary trade "pillar" (the US) weakens due to protectionism, the entire economic structure remains stable.
Why Fiscal Consolidation Still Matters — Analytical Reproduction (Summary)
Central Argument
Fiscal consolidation remains essential for India not because growth is weak, but because macroeconomic credibility, borrowing costs, and policy flexibility depend on it—especially in a world of higher interest rates, geopolitical risk, and volatile capital flows.
Why the Question Has Re-emerged
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Strong GDP growth has revived arguments that deficits no longer matter
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Higher tax collections and capex-led growth have reduced immediate fiscal stress
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However, global conditions have structurally changed:
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Higher-for-longer interest rates
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Increased sovereign debt across economies
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Greater sensitivity of investors to fiscal discipline
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The article argues that ignoring consolidation now would be a strategic error, not a tactical one.
What Fiscal Consolidation Really Means (Clarified)
The article stresses that consolidation does not mean:
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Austerity
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Cutting productive spending
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Slowing growth deliberately
Instead, it means:
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Reducing the deficit-to-GDP ratio gradually
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Improving the quality of expenditure
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Ensuring public debt grows slower than nominal GDP
Key Reasons Fiscal Consolidation Still Matters
1. Interest Cost Burden
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Rising global rates increase the cost of servicing government debt
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Higher interest payments crowd out productive spending
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Without consolidation, a growing share of revenue is absorbed by debt servicing
2. Crowding Out Private Investment
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Large government borrowing raises yields
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Higher yields increase funding costs for corporates
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This undermines the private investment cycle the government is trying to revive
3. Policy Credibility and Market Confidence
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Fiscal discipline anchors:
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Sovereign bond yields
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Currency stability
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Foreign investor confidence
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Slippage risks higher risk premiums even if growth remains strong
4. Shock Absorption Capacity
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Countries with weaker fiscal positions have less room to respond to:
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External shocks
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Commodity price spikes
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Financial stress
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Consolidation today preserves future fiscal optionality
5. Intergenerational Equity
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Persistent deficits transfer today’s consumption burden to future taxpayers
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The article frames consolidation as a fairness issue, not just a macro one
Growth vs Discipline: A False Trade-off
The article rejects the idea that consolidation and growth are mutually exclusive:
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Well-designed consolidation:
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Protects capital expenditure
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Rationalises subsidies
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Improves tax efficiency
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Empirical evidence shows credible consolidation can coexist with strong growth
What Should Not Be Cut
The article is explicit that consolidation should not come at the expense of:
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Infrastructure investment
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Health and education
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Targeted welfare with high multiplier effects
Instead, focus should be on:
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Better targeting
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Leakage reduction
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Outcome-based spending
Medium-Term Fiscal Strategy Emphasised
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Stick to announced fiscal glide paths
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Use growth windfalls to reduce deficits—not expand spending permanently
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Maintain transparency in off-budget borrowings
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Strengthen state-level fiscal discipline alongside the Centre
Conclusion
Fiscal consolidation still matters because it underpins macroeconomic stability, growth sustainability, and investor trust. In a more uncertain global environment, discipline is not a constraint on growth—it is a precondition for durable growth.
The article concludes that the cost of delaying consolidation may not be immediate, but it will be compounded and unavoidable.
In the context of the Mumbai Mint Primer from December 22, 2025, the primary focus of welfare and policy centers on a structural overhaul of legacy systems to align with the national vision of "Viksit Bharat 2047",. The sources emphasize a shift toward greater state-level financial responsibility, the integration of technology in service delivery, and the simplification of regulatory burdens for small businesses,,.
The Transition from MGNREGA to VB-G RAM G
The most significant policy development is the replacement of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025,,.
- Expansion of Benefits: The new Act increases the statutory guarantee of wage employment from 100 days to 125 days per rural household annually,.
- The "Agricultural Pause": A new clause allows states to notify a mandatory "pause" in public works for up to 60 days during peak sowing and harvesting seasons to ensure the availability of agricultural labor,.
- Fiscal Decentralization: The funding pattern has shifted significantly. While the Centre previously bore approximately 90% of the cost, the new formula requires a 60:40 split between the Centre and states,,. This triples the financial burden on states, with Uttar Pradesh, Andhra Pradesh, and Tamil Nadu projected to see the highest increases in liabilities,.
Modernizing Welfare through Technology
The government is moving toward "agentic AI" and automated systems to enhance the efficiency of social safety nets,.
- Grain Analyzers: Starting in 2026, the government plans to deploy AI-powered automated grain analyzers to modernize testing, storage, and distribution.
- Scheme Strengthening: These tools are intended to improve delivery under the Pradhan Mantri Garib Kalyan Anna Yojana and the National Food Security Act, which serve roughly 800 million beneficiaries, by reducing complaints and ensuring quality consistency,.
Regulatory Policy and MSME Relief
The upcoming budget is expected to focus on compliance relief for India’s 73 million MSMEs, which contribute 30% to the GDP.
- GST & Audit Simplification: Proposed reliefs include allowing quarterly GST payments and waiving penalties for "genuine errors" in the first two instances,. The MSME ministry has also suggested moving toward self-certification for audits for micro-enterprises,.
- Single-Window Access: The government plans to launch a single-window mobile application integrating GST, income tax, and UDYAM registrations to assist small businesses,.
Financial and Market Regulation
New legislative frameworks aim to unify outdated laws and bolster investor protection,.
- Securities Markets Code: The proposed Securities Markets Code Bill of 2025 will merge legacy acts (such as the SCRA 1956) into a single code to end jurisdictional overlaps,. It includes a proposal for a Sebi ombudsman to redress investor grievances,.
- Insurance Overhaul: The Sabka Bima Sabki Raksha Bill, 2025, aims for "insurance for all" by raising FDI limits to 100%,. Additionally, the recent removal of GST on health insurance has already led to a rise in policy purchases and higher coverage amounts for consumers.
Analogically, the government’s policy shift is like an aging utility grid being re-wired; while the new "Viksit Bharat" cables can carry more power (like the 125-day job guarantee), the cost of maintaining the local transformers has been shifted to the states, and the entire system now relies on "smart" AI sensors to prevent leakage and fraud.
In the larger context of the December 22, 2025, reports, technology and innovation are shifting from a phase of mere experimentation to deep operational integration across India's core economic sectors. The sources describe 2025 as the "appetizer" for an even more transformative 2026, where agentic AI and deeptech will begin to run entire workflows and mission-critical infrastructure.
The Evolution of Artificial Intelligence
The sources project that 2026 will be the year AI moves from being a production tool to a "thinking partner" for corporate decision-making.
- Agentic AI: AI "agents" are expected to quietly manage complex tasks like triaging code, reconciling invoices, and monitoring customer complaints under light human supervision.
- AI in Traditional Sectors: India is deploying AI-powered automated grain analyzers to modernize the testing and storage of food grains, aiming to cut wastage and improve quality consistency for 800 million welfare beneficiaries.
- The "Human" Premium: As AI-generated content (often mockingly called "AI Slop") floods the market, "verified human" content and "human-made" branding are expected to attract a premium, similar to a "Michelin star" for authenticity.
- Astrology and AI: Even traditional fields like astrology are being disrupted, with AI-powered "astrologers" handling thousands of clients simultaneously and generating higher revenue and ratings than their human counterparts.
National Tech Infrastructure and Sovereignty
India is working to democratize access to advanced technology while maintaining strategic control over its digital future.
- DPI for AI: Similar to the success of UPI for payments, the government is expected to announce a Digital Public Infrastructure (DPI) protocol for AI to provide startups and MSMEs with subsidized access to "IndiaAI" GPU clusters.
- Local Customization: Experts suggest India's opportunity lies in customizing AI for local languages and services, ensuring that mission-critical systems (like electricity or payment grids) are not dependent on a single foreign provider.
- Flipkart’s "OneTech": Major domestic players are unifying their tech stacks; Flipkart’s "OneTech" backbone now powers its entire ecosystem, from fraud detection and warehouse automation to its quick-commerce venture, Flipkart Minutes.
Mobility, Space, and Deeptech
The frontiers of innovation are expanding into the high-stakes worlds of autonomous transport and aerospace.
- Connected Highways: The government is developing a Connected Commercial Vehicle (CCV) protocol to standardize communication between smart vehicles and highway infrastructure (V2X connectivity).
- Space and Deeptech Funding: Deeptech funding reached $1.55 billion in 2025, with semiconductors and spacetech emerging as the primary winners. ISRO is set to launch the BlueBird Block-2 satellite to provide high-speed cellular broadband directly to smartphones.
- Hiring Wars: Aerospace and defense startups are now competing directly with tech giants and high-frequency traders for top IIT talent, reflecting the rapid scaling of private engineering in India.
Regulatory and Ethical Challenges
As technology advances, new risks such as deepfakes and "cognitive atrophy" are forcing a rethink of regulation.
- Deepfake Regulation: Proposed rules may collapse the distinction between a "platform" and a "publisher" by requiring intermediaries to inspect and label synthetic content, a move that critics argue could stifle innovation.
- The "Disconnect" Movement: Concerns over the loss of critical thinking skills in children (due to over-reliance on AI tutors) may spark a counterculture "disconnect" movement that prizes analogue-only spaces.
Analogically, technology in 2026 is moving from being a "guest" at the table to becoming the "chef" in the kitchen; while it promises to serve a much larger and more efficient feast, India is focused on ensuring it owns the recipe (AI sovereignty) and that the human diners don't lose their own ability to cook (critical thinking skills).
In the larger context of the December 22, 2025, reports, India’s corporate and market landscape is defined by a record-breaking IPO boom, a projected surge in private capital expenditure, and a significant consolidation in the financial and renewable energy sectors,. While the economy is expected to grow by over 7.5% in FY27, there are underlying concerns regarding the quality of investments and a slowdown in domestic capital formation,.
The IPO Boom and Regulatory Overhaul
India has emerged as the world’s fourth-busiest market for first-time share sales in 2025,.
- Extended Momentum: Investment bankers from Goldman Sachs and JPMorgan expect IPO fundraising to reach $25 billion in 2026, driven by high-profile debuts like Jio Platforms and the National Stock Exchange,.
- Mixed Deal Quality: Despite the exuberance, roughly half of the 352 IPOs in 2025 are trading below their offer price, leading to investor caution regarding mispricing,.
- Legislative Scaffolding: To bolster confidence, the government introduced the Securities Markets Code Bill of 2025, which merges legacy laws (such as the SCRA 1956) into a single code to end jurisdictional overlaps and strengthen investor protection via a Sebi ombudsman,.
- Mutual Fund Transparency: Sebi has revamped the expense ratio framework, introducing a Base Expense Ratio (BER) that excludes statutory levies to give investors clearer insight into costs,.
Strategic Banking and Finance Shifts
The financial sector is witnessing a divergence in strategy between major private and public players,.
- Kotak’s "lasting franchise" Approach: Unlike rivals HDFC and ICICI, Kotak Mahindra Bank is resisting the listing of its subsidiaries, with CEO Ashok Vaswani stating the bank would rather focus on long-term value than selling stakes to foreign investors during a market surge,.
- SBI’s Growth Path: SBI plans to complete the IPO of its Mutual Fund unit within 12 months and expects its home loan portfolio to reach ₹10 trillion by FY27,.
- NBFC Dominance: Japanese giant MUFG Bank acquired a 20% stake in Shriram Finance, reflecting a broader trend of foreign capital entering the NBFC space, which often enjoys higher returns on assets than traditional banks due to fewer regulatory handicaps,.
- Unsecured Lending Curbed: Following RBI’s tighter norms, credit card outstandings fell to 4.7% of total retail loans, with growth slowing sharply as banks shift toward lower-risk mortgages,.
Investment Outlook and Market Consolidation
Economists anticipate that private investment will hit "top gear" in 2026, supported by soft inflation and a cumulative 125-basis-point cut in the repo rate during 2025,.
- Manufacturing Momentum: Sectors such as semiconductors, electronics, and EVs are seeing robust order books,. For instance, Foxconn onboarded 30,000 workers for its new iPhone facility in just nine months, the fastest ramp-up in Indian history,.
- Clean Energy Consolidation: Consolidation is picking up, highlighted by Inox Clean Energy’s $600 million acquisition of Vibrant Energy, which strengthens its push toward a 3 GW capacity by FY26,.
- Office Market Resilience: India remains an outlier in the Asia-Pacific region, with office leasing expected to cross 80 million sq. ft. in 2025 due to the expansion of Global Capability Centres (GCCs),.
Emerging Risks and Structural Challenges
Despite the growth, the sources identify several "red flags" that could drag on GDP,.
- Capital Formation Slump: Household savings have fallen to 18% of GDP as capital increasingly flows into non-productive assets like gold and real estate rather than the financial system,.
- External Headwinds: Uncertainty regarding a US-India trade deal and the imposition of 50% tariffs on Indian goods continue to weigh on investment sentiment and the rupee, which recently slipped below 90 against the dollar,.
Analogically, India’s corporate market is like a high-speed train increasing its velocity (the IPO boom and capex); however, the fuel lines (household savings) are beginning to divert elsewhere, and the track ahead is being slowed by external weather conditions (US trade tariffs). To reach its "Viksit Bharat" destination, the government is currently rewiring the signaling system (the Securities Markets Code) to ensure the journey remains safe for passengers (retail investors).
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