Financial system must move from accommodating growth to enabling growth: Dr. P. K. Mishra

India must move from Make in India to Design in India, Innovate in India and Lead from India

THEBUSINESSBYTES BUREAU

MUMBAI, SEPTEMBER 23, 2026

India’s financial system must move beyond merely accommodating economic growth to actively enabling it, Principal Secretary to the Prime Minister Dr. P. K. Mishra said on Wednesday, calling for deeper financial markets, technology-driven credit assessment and stronger institutional capacity to support the country’s transition from an emerging economy to a leading force in the global economic order.

Addressing the inaugural session of the 13th SBI Banking and Economics Conclave 2026 in Mumbai on the theme “From Emerging to Leading: India’s Expanding Role in the Global Economic Order,” Dr. Mishra said India’s transformation cannot be measured by the size of its economy alone. A leading economy, he said, must possess the institutional strength to sustain growth, absorb external shocks and contribute increasingly to global economic well-being.

He highlighted the strengthening of India’s economic architecture over the past decade, pointing to macroeconomic stability, fiscal consolidation, healthier bank balance sheets, the Insolvency and Bankruptcy Code, GST, digital public infrastructure and a sharp rise in public capital expenditure.

Capital expenditure has increased from around ₹2.5 lakh crore in 2015-16 to more than ₹12 lakh crore in 2026-27, he noted, creating stronger productive foundations for private investment and enterprise.

Dr. Mishra said India’s digital public infrastructure has opened new possibilities for widening access to finance. The evolution from Jan Dhan-Aadhaar-Mobile and Direct Benefit Transfer to UPI, Account Aggregator and digital lending infrastructure, he said, can fundamentally reshape the way credit is delivered.

 “The financial system must now increasingly move from accommodating growth to enabling growth,” Dr. Mishra said, underlining the need for financial institutions to become more responsive to the evolving requirements of businesses and entrepreneurs.

A key area of transformation, according to Dr. Mishra, is the way banks assess creditworthiness. Calling for a shift “from collateral to cash flow,” he said technology can enable financial institutions to evaluate enterprises using GST returns, bank statements, payment flows and other digital information.

Such an approach could particularly benefit first-generation entrepreneurs, asset-light businesses and small enterprises, where the strength of the underlying business may not be reflected in the availability of family-owned assets for collateral.

The shift could also expand the pool of businesses capable of accessing formal finance, while allowing lenders to make more informed decisions based on actual business performance.

Dr. Mishra stressed that India’s growing investment requirements cannot be met by the banking sector alone. As the economy expands, deeper corporate bond and equity markets, larger institutional investors, infrastructure funds and more efficient mechanisms for channelising domestic savings into productive investment will become increasingly important.

These financial channels, he said, will be critical for financing the country’s requirements in infrastructure, manufacturing, urbanisation, energy transition and innovation.

The emphasis on financial-market deepening comes as India seeks to strengthen the connection between domestic savings and long-term productive investment, while broadening the sources of capital available to businesses.

Dr. Mishra also underlined the importance of economic resilience, drawing lessons from the COVID-19 pandemic, the Ukraine conflict and recent disruptions associated with the West Asia crisis.

These episodes, he said, demonstrated the value of institutional and financial capacities built during periods of relative stability.

India’s economy has grown at an average rate of more than 7 per cent in real terms since the pandemic, while growth in the first quarter of the current year stood at 7.8 per cent, he said.

At the same time, he flagged several emerging risks, including fragmented global alliances, increasing trade barriers, import dependence, pressures on external accounts and the rapid development of Artificial Intelligence.

To address these challenges, India will need stronger domestic manufacturing capabilities, greater investment in skilling, higher foreign direct investment and sustained improvements in overall economic competitiveness.

Dr. Mishra said India’s global economic opportunity extends beyond becoming a large consumer market. The country has the potential to emerge as a major production and innovation hub, provided it strengthens domestic value addition and builds globally competitive capabilities.

He called for stronger component ecosystems, greater design capabilities, intellectual property creation and globally competitive Indian brands.

The strategic progression, he said, should be from “Make in India, to Design in India, Innovate in India and ultimately Lead from India.”

The shift would involve moving higher up global value chains, with greater emphasis on technology, intellectual property, innovation and the creation of Indian companies and brands capable of competing internationally.

Dr. Mishra also pointed to the potential of GIFT-IFSC, wider settlement of international trade in rupees and Indian digital payment platforms in supporting India’s expanding global economic engagement.

As India’s economic weight increases, he said, the country will have a greater responsibility not only to participate in global commerce but also to contribute to shaping the standards, norms and institutions governing international trade and finance.

He emphasised that global economic influence would need to be supported by domestic institutional strength and sustained policy credibility.

Dr. Mishra said resilience and credibility are not created overnight but are built over time through sound institutions, consistent policies and effective delivery.

India’s recent sovereign rating upgrades, he noted, represent an external reflection of changes that have been built over several years. At the same time, he cautioned that the broader lesson is that “credibility comes from consistency.”

The message assumes significance as India seeks to attract long-term investment and strengthen its position in global capital and production networks.

Concluding his address, Dr. Mishra said the India of 2047 cannot simply be today’s economy with a substantially larger GDP. It must instead be more productive, innovative, technologically capable, financially sophisticated and globally competitive.

He called on the government, industry, financial institutions, economists and policymakers to work collectively to finance the next generation of Indian enterprise and convert the country’s economic scale into productive capability and global leadership.

The challenge ahead, he suggested, is therefore not only to sustain India’s growth momentum but to build the financial, technological and institutional capacity required to translate that growth into long-term competitiveness and a stronger role in the global economy.