Financial sector must fund next generation of enterprises, not just next year's growth: P K Mishra
The Principal Secretary to the Prime Minister P K Mishra said on Wednesday that the financial sector should move beyond financing near-term growth and focus on funding the next generation of Indian enterprises. He called for a shift in the way credit is assessed, from collateral to cash flows. Mishra said India's financial system will need to mobilise large amounts of capital for infrastructure,…
Principal Secretary to the Prime Minister PK Mishra has urged the financial sector to shift its focus from merely financing next year's growth to funding the next generation of Indian enterprises, according to a report from the 13th SBI Banking and Economics Conclave 2026. Mishra emphasized that the financial system must evolve from simply accommodating growth to enabling growth as India aspires to become a leading global economy.
He argued that a more sophisticated economy requires more than just banks to finance it; instead, it calls for the development of deeper corporate bond and equity markets, larger institutional investors, and infrastructure funds. Mishra also advocated for a transformation in how credit is assessed, moving away from relying solely on collateral and towards evaluating cash flows.
He stressed that technology can assist in this shift by enabling lenders to assess businesses using data such as GST returns, bank statements, payment flows, account aggregator data, and digital lending infrastructure.
Mishra highlighted the need for lenders to evaluate businesses based on their earnings and future potential rather than just their existing assets. He argued that for India to transition from manufacturing to design and innovation, its capital markets, venture ecosystem, and banks must be prepared to finance innovative ideas as much as they finance established factories.
The financial sector must mobilize significant capital for various sectors, including infrastructure, manufacturing, urbanization, energy transition, and innovation. Different forms of capital are needed for different purposes: long-term capital for assets with lengthy gestation periods, risk capital for innovation, equity for high-growth enterprises, and patient capital for infrastructure and urban development.
Mishra also emphasized the importance of strengthening domestic manufacturing and reducing vulnerabilities from global supply-chain disruptions, urging India to manufacture its products competitively.
Finally, Mishra called for India to move beyond merely "making in India" to becoming a hub for "designing in India," "innovating in India," and eventually "leading from India." He envisioned a future India that is not only more productive, innovative, technologically advanced, and financially sophisticated but also globally competitive by 2047.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
