Financing Summit 3.0: Paving the Path for Viksit Bharat

The Confederation of Indian Industry (CII) hosted the Financing Summit 3.0 from 2nd to 3rd September 2024, gathering industry leaders, government officials, and financial experts to discuss the future of India’s financial sector in the context of the nation’s ambitious vision for a ‘Viksit Bharat’ or Developed India by 2047. Over two days, the summit emphasized the need to reshape the financial landscape to sustain robust economic growth and discuss important areas  global capital flows, infrastructure financing, green financing,  financial inclusion, to name a few.

Inaugural Plenary Session Highlights

The summit began on 2nd September with an insightful discussion led by Dr V. Anantha Nageswaran, Chief Economic Adviser to the Government of India. He stressed the importance of retaining policy autonomy and managing global capital flows effectively, especially as globalization of trade slows and capital flows remain strong. Dr Nageswaran highlighted that while India continues to rely on global capital due to a modest current account deficit, the country’s bright growth prospects should be leveraged to carve out policy space and protect the economy from external volatility.

Dr Nageswaran also warned against the dangers of financialization—a scenario where excessive focus on market trends distorts macroeconomic outcomes. He emphasized that India must avoid the pitfalls of financialization, as seen in advanced economies, which have led to unprecedented debt levels, dependence on asset price inflation, and growing inequality. Instead, India should aim for sustainable and inclusive growth.

Shri C S Setty, Chairman of the State Bank of India, emphasized the crucial role of non-bank financial institutions in deepening the corporate bond market. He pointed out that institutions like insurance companies, mutual funds, and pension funds should channel more capital into this market. Additionally, he noted that banks must innovate and develop new skillsets to support credit expansion into emerging sectors, such as battery storage and hydrogen.

Mr. Sanjiv Bajaj, Past President of CII and Chairman & Managing Director of Bajaj Finserv Limited, reiterated the need for enhancing credit availability and expanding the financial markets. He called for greater cooperation among regulators to create policies that support innovation while ensuring robustness.

The session concluded with insights from Mr. Ashishkumar Chauhan, Managing Director & CEO of the National Stock Exchange, who emphasized the role of new technologies in capital markets. He highlighted that by preventing excessive corporate debt and leveraging innovative technologies, India’s capital markets could significantly contribute to the country’s economic growth.

Valedictory Session: Vision for Viksit Bharat

On 3rd September, the valedictory session was marked by a keynote address from Shri Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance, Government of India. He outlined the government’s ambitious target of sustaining a growth rate of over 7% for the next two decades to realize the vision of Viksit Bharat. This goal, he noted, will require reimagining the financial sector to improve scale, reach, efficiency, and productivity.

Shri Seth emphasized the need for expanding access to a variety of credit products, insurance, pensions, and capital market products. He also pointed out the necessity of improving service quality, reducing intermediation costs, and deepening bond markets. Highlighting the importance of collaboration, he stressed that no single institution or sector could tackle these challenges alone, calling for cooperation among the government, regulatory bodies, industry associations, and civil society.

Reflecting on the progress made in financial inclusion, Shri Seth mentioned the remarkable achievement of over 53 crore Jan Dhan accounts, surpassing the population of Europe. He also pointed out that only 31 out of 19,000 pin codes in India lack access to financial products and services, demonstrating the significant strides made in financial inclusion.

The session also touched upon the need to enhance credit ratings and develop the secondary market. Shri Seth mentioned the forthcoming National Financial Information Registry, which, once enacted, would help bridge gaps in the credit rating mechanism.

Mr. Sanjiv Bajaj and Mr. Chandrajit Banerjee, Director General of CII, echoed the need for a rapidly evolving financial sector, especially in a digital world. They noted that the CII would submit key recommendations from the summit’s deliberations to the government for consideration.

The Financing Summit 3.0 successfully brought together stakeholders to discuss the pressing challenges and opportunities in India’s financial sector. As India aims for a developed nation status by 2047, the discussions at the summit highlighted the need for policy innovation, technological adoption, and collaborative efforts across sectors to build a robust and inclusive financial ecosystem.