MUMBAI
India will require large volumes of long-term capital over the next two decades to finance infrastructure, manufacturing, urbanisation and the energy transition, Principal Secretary to the Prime Minister P K Mishra said on Wednesday, calling for a deeper corporate bond market.
Addressing the 13th SBI Banking & Economics Conclave, Mishra said the financial system must play a greater role in supporting the country’s next phase of economic growth. “The financial system must now increasingly move from accommodating growth to enabling growth,” he said.
Mishra said different sectors require different forms of financing, with long-gestation assets needing long-tenure capital, innovation requiring risk capital, high-growth enterprises needing equity and infrastructure requiring patient capital. He also stressed that corporate bonds and bank lending should develop together rather than being treated as separate areas.
India’s financial system has undergone significant changes over the past decade, supported by stronger bank balance sheets, the Insolvency and Bankruptcy Code and expansion of the formal economy through the Goods and Services Tax. Mishra said stronger financial institutions had improved the country’s ability to withstand external shocks.
He said the country would need to mobilise “very large volumes of capital” as investment requirements rise across infrastructure, enterprise and innovation. Mishra also said attracting overseas investment would depend on creating predictable business conditions and strengthening the broader financial ecosystem to support sustained growth ahead too. He cautioned against complacency, citing rising trade barriers, volatile global capital flows, import dependence and rapid advances in artificial intelligence as challenges. “We cannot count on a friendly tailwind,” he said. Mishra called for stronger manufacturing competitiveness and greater foreign direct investment, supported by stable tax policies, reliable contracts, improved logistics and faster clearances.