Need to identify sectors where India can lead, says PM Narendra Modi

Prime Minister Narendra Modi said on Tuesday that India’s banks and financial institutions need to come up with innovative products and services to support new and emerging opportunities in the economy.

At a post-Budget webinar organized by the Finance Ministry’s Department of Economic Affairs, the PM said there’s a need to identify eight to ten sectors where India can be among the top three in the world, and for financial institutions to support these sectors.

“The companies which are in these sectors, they need proactive help from our financial institutions,” Modi said.

Some of the sectors the PM mentioned included construction, infrastructure, start-ups, space, drones, and geospatial sectors.

"The expansion of entrepreneurship, innovation, and search for new markets among start-ups will happen only when there is deep understanding of these ideas of the future among those who finance them," Modi said.

Giving an example of the recent demand for Indian wheat exports, Modi said that there is an opportunity that India should take advantage of, and financial institutions should come up with innovative ideas on how this advantage can be maximized. The PM added that there was a global market for Indian agri-produce which was not yet fully tapped, and financing solutions were required for the whole process starting from producing and packaging to branding.

As war rages on between two of the world’s largest wheat producers – Russia and Ukraine – analysts say that India’s wheat exports could touch a new record of 10 million tonnes in 2022-23, up from a record seven million tonnes in the current financial year, if global market conditions remain choppy and no curbs are imposed on outbound shipments.

Market watchers say that the Russia-Ukraine crisis has not only attracted global buyers to India but also pushed the price of Indian wheat from around $320 per tonne to over $360 per tonne in less than 10 days.

Speaking at the event, Modi said that implementation of green financing is the ‘need of the hour’ to meet net-zero carbon emissions

target by 2070, and that financial help should be extended to environment-friendly projects.

“Our financing sector will have to consider innovative financing and sustainable risk management of new futuristic ideas and initiatives,” he said, and added that the success of the reforms undertaken by the government to strengthen MSMEs is dependent on strengthening the financing of smaller businesses.

Referring to the work and investment in the health sector, the Prime Minister emphasized that in order to tackle the challenges relating to medical education, it is critical to have more and more medical institutions.

"Can our financial institutions and banks prioritize this in their business planning", the Prime Minister said. He also asked bureaucrats to come up with actionable solutions to implement announcements in the 2022 Budget.

The webinar saw participation from 16 ministries, NITI Aayog, Capacity Building Commission and State Governments. It also included representatives from RBI, Sebi, NABARD, GIFT City, industry associations and investor community.

“While over the years, India's financing market has evolved, there is significant room for further innovation particularly in the domestic bond markets. If we look at the infrastructure financing market globally, innovative financing structuring is better understood and issuers have access to cheaper and longer duration capital,” said Shivam Bajaj, Founder & CEO at Avener Capital, on the PM’s address.

The event also had closed-door breakaway sessions on themes including infrastructure financing, financing sectors with high employment potential, creating enablers of infrastructure, navigating the digital opportunity for banking and finance, and

climate and sustainable finance & financing for sunrise sectors.