Financial sector must fund next gen of enterprises, not just next year's growth: PM's Principal Secretary

New Delhi: The financial sector must move beyond financing near-term growth and focus on funding the next generation of Indian enterprises, Principal Secretary to the Prime Minister PK Mishra said on Wednesday.

"The task before the financial sector is larger than financing next year's growth. It is to finance the next generation of Indian enterprise," Mishra said at the 13th SBI Banking and Economics Conclave 2026 in Mumbai.

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He said the financial system must increasingly move from "accommodating growth to enabling growth" as India seeks to become a leading global economy.

A much larger and sophisticated economy cannot be financed by banks alone, he said, stressing the need for deeper corporate bond and equity markets, larger institutional investors and infrastructure funds.

Mishra also called for a shift in the way credit is assessed, from collateral to cash flows.

"There is another transformation that I believe the financial sector must now undertake. It is the movement from collateral to cash flow," he said.

Stressing on the use of new technologies to expand credit, Mishra said that technology can help lenders assess businesses through goods and services tax (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," Mishra said.

He said lenders should increasingly assess businesses based on their earnings and future potential rather than primarily on assets already 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.

Mishra said India's financial system will need to mobilise large amounts of capital for infrastructure, manufacturing, urbanisation, energy transition and innovation, with different forms of capital required for different needs.

"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.

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He also said India needs to strengthen domestic manufacturing and reduce vulnerabilities arising from global supply-chain disruptions.

"We cannot count on a friendly tailwind," Mishra said, adding that India must "make things at home and competitively".

The financial sector, he said, will also have to support Indian companies expanding into global markets and help India emerge as a provider of international financial services.

"The journey must move from 'make in India' to 'design in India', 'innovate in India' and ultimately 'lead from India'," Mishra said.

He said that India of 2047 cannot simply be the present economy with a larger GDP, but must be "more productive, more innovative, more technologically capable, more financially sophisticated, and more globally competitive".

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