Primary drivers of financing must increasingly come from within: Anantha Nageswaran

V Anantha Nageswaran, Chief Economic Advisor, Government of India
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To achieve its goal of becoming a developed nation by 2047, India must increasingly rely on domestic financing as geopolitical factors increasingly influence global capital flows, stated V Anantha Nageswaran, Chief Economic Advisor to the Government of India.

He observed that while international investments have historically supplemented India’s domestic savings—fueling infrastructure, technological advancement, financial sector growth, and private enterprise—external capital alone cannot meet future development needs given shifting geopolitical realities.

The CEA cautioned that financing strategies must evolve beyond dependence on foreign investment. “External capital should complement, not replace, domestic efforts,” he emphasized. “National institutions must serve as pillars of stability. Fiscal, financial, and monetary decisions are domestic matters at their core.”

Nageswaran stressed that traditional financing approaches would prove inadequate amid technological disruptions and economic uncertainties. “Risk assessment, lending practices, and capital market operations need modernization. While banking reforms have reduced non-performing assets, strengthened provisioning, and ensured robust capital adequacy, complacency isn’t an option.”

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Nageswaran highlighted the necessity for financial institutions to evolve beyond balance sheet stability to proactive capital deployment. “An overemphasis on short-term lending, excessive collateral requirements, and preference for established firms over innovators must give way to patient, long-term investment strategies,” he asserted.

The CEA called for greater ambition among financial institutions: “To build future-ready productive capacity, banks must embrace technology, cultivate risk intelligence, and support enterprises throughout their growth cycles.”

He also urged India’s private sector to adopt a bolder approach: “Strategic opportunism requires moving beyond caution. Without ambitious investments and risk-taking, India risks falling short in building economic resilience and global indispensability.”

Published on November 17, 2025