Financial Sector Must Fund Next Generation of Indian Enterprises, Move Beyond Near-Term Growth: PM’s Principal Secretary

New Delhi, Sep 24 (KNN) India’s financial sector must move beyond financing near-term economic growth and focus on funding the next generation of Indian enterprises, Principal Secretary to the Prime Minister PK Mishra said on Wednesday.

Addressing the 13th SBI Banking and Economics Conclave 2026, Mishra said, “The task before the financial sector is larger than financing next year's growth. It is to finance the next generation of Indian enterprise,” PTI reported.

The financial system must shift from “accommodating growth to enabling growth” as India seeks to become a leading global economy, he added.

Deeper Capital Markets Needed

Mishra highlighted that a larger and more sophisticated Indian economy cannot rely on banks alone and will require deeper corporate bond and equity markets, larger institutional investors and infrastructure funds.

He noted that different forms of capital would be needed for different stages and sectors of growth. Long-gestation assets require long-term funding, innovation needs risk capital, high-growth enterprises require equity, while infrastructure requires patient capital and cities will need new financing structures.

Credit Assessment Must Shift From Collateral To Cash Flow

Mishra also called for a shift in credit assessment from collateral towards cash flows and business potential.

“There is another transformation that I believe the financial sector must now undertake. It is the movement from collateral to cash flow,” he said, as quoted by PTI.

He emphasised that technologies can enable lenders to assess businesses using GST returns, bank statements, payment flows, Account Aggregator data and digital lending infrastructure.

“This is not an argument for lower standards of credit appraisal. It is an argument for better information and better credit appraisal,” He noted.

Mishra said lenders should increasingly assess businesses based on their earnings and future potential rather than primarily on assets owned by promoters.

“If India is to move from manufacturing to design and innovation, our capital markets, our venture ecosystem and our banks must be equally willing to finance ideas and not merely factories,” he added.

Financial System Must Support Global Expansion

Mishra emphasised that India’s financial system will have to mobilise substantial capital for infrastructure, manufacturing, urbanisation, energy transition and innovation, while also helping Indian companies expand into global markets.

“Assets with long gestation period require capital of long tenure. Innovation requires risk capital. High growth enterprises require equity. Infrastructure requires patient capital, and cities will require new financial structures,” he said.

He also stressed the need to strengthen domestic manufacturing and reduce vulnerabilities arising from global supply-chain disruptions. India, he said, must “make things at home and competitively”.

The broader economic journey, Mishra said, must progress from ‘make in India’ to ‘design in India’, ‘innovate in India’ and ultimately ‘lead from India’.

(KNN Bureau)