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India needs its “own JP Morgans and Citibanks” – giant banks of international standards, said B V R Subrahmanyam, chief executive officer of Niti Aayog on Friday, highlighting the need for reforms in financial services.
"We need much bigger banks, we need much more global players and we need a financial sector which has the muscle to service Indian firms not just in India but across the world," he said at the CII Annual Business Summit 2024 in New Delhi.
"We need our own JP Morgans and we need our Citibanks around the world. And that requires a very, very forward-looking thinking. Our regulator will have to look at that."
Another reform that needs to be undertaken is to "throw open the doors and the boundaries" of India's external sector.
Subrahmanyam said that the reforms of 1991 and 1994, when India became a member of the World Trade Organization, unleashed India's industrial transformation.
As many as "90 per cent of the companies that exist today are here in their size because of what happened then," he said. "You actually grow because of competition, because of de-licensing etc. There is nothing much more that needs to be done in a big way."
Subrahmanyam acknowledged that some companies might "vanish" in an open economy but that is "the law of capitalism".
"Some will vanish but there will be many more will emerge. In totality, the pie is going to be much larger," he said.
The third sector that needs reforms, according to Subrahmanyam, is education and skilling. "The answers are very difficult. But till we tackle the difficult problems, the others won't happen."
India has done well in creating jobs but not enough in labour-intensive sectors, he said. There is a need for reforms in the application of rules and regulations.
"I think every industrial estate in India should become an enclave which then gets the benefit of far less regulation, far less control."
