By Soumya Kanti Ghosh

Copyright thehindubusinessline

The recent reaffirmation of faith by global rating agencies in India has vindicated the Indian sovereign’s structural resilience, built painstakingly in the last few years. This is the broader truth that prevails over the cacaphony on the trade front.

To ensure that wealth is redistributed and opportunities are democratised, there has been a barbell strategy in full swing. This includes facilitating a slew of reforms across policy and regulatory spheres that strengthen the myriad pillars of ‘ease of business’ while using formalisation, financialization and technology integration at population scale for attracting desired investment, beating fierce competition from other jurisdictions.

With geopolitical developments since the pandemic necessitating a shift in the manufacturing playbook, India has dismantled barriers to ‘ease of exit’, a key differentiator for the investing community worldwide in channelling capital flows in terms of FDI as well as portfolio investment. India has attracted more than $1 trillion in FDI since 2000, benefiting sectors such as services, technology and telecom the most (Q1FY26 YTD figures are nearly $25 billion).

When SEBI rolls out a Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI), simplifying access for marquee foreign investors considered low risk, or RBI ushers in changes in FEMA guidelines, stepping up the usage of rupee in international trade, the vibes sent across the Atlantic are unmistakable. The success of the institutional mechanism is evident — the IBC, asset reconstruction, infra financing and platformisation across banking, insurance and financial services on a plug-and-play model, with exponentially increased AI usage.

A slew of policy measures —like PMAY (3.2 crore houses sanctioned), MUDRA (₹33.65 lakh crore sanctioned to more than 52 crore accounts in total, with 68 per cent being women entrepreneurs), PM-SVANidhi (68 lakh plus street vendors covered through 96 lakh plus loan accounts), UDYAM (MSMEs registration over 6.86 crore counting Udyam Assist Portal), SHRAM SUVIDHA (compliance of labour and employment portal with 6.63 lakh ESIC registrations, 6.49 lakh EPFO registrations and 1.29 lakh contract labour registrations by firms since 2018), SWAMITVA (integrated inhabited property ownership solution for rural areas wherein drone surveys have been completed in 3.20 lakh villages), NAKSHA (comprehensive, GIS-integrated database of urban land parcels with pilot programme in 150 cities initially, to expand to 4,912 urban local bodies Pan-India), SASCI (50-year interest-free loans for capital expenditure from the Centre to States) and layers of formalisation — have upended years of structural stagnation.

This fortifies earlier schemes, from Smart Cities Mission to Har Ghar Jal to Pradhan Mantri Garib Kalyan Yojana (PMGKY) to PM Kisan Samaan Nidhi to Ayushman Bharat Yojana, the synergy reflected beyond numbers anchoring bankrolling of new investments.

Since 2021, GST collection has risen by 1.9x (94 per cent growth), corporate tax collection by 2.2x (116 per cent growth), income tax mop up by 2.42x (143 per cent growth) while the tax subscriber base has gone up by 1.4x (37 per cent growth, 2.5 crore addition) with a marked improvement in taxpayer cohorts from lower strata moving up the value chain. Corporate profits (ex-BFSI) have gone up by 2.4x, 136 per cent since 2021.

Further, boosting corporate formalisation, in FY24, over 1,85,000 companies were formed in India, while initial numbers for FY25 are around 1.63 lakh, resulting in around 18.5 lakh active companies with RoC on date. But close to 8.5 lakh inactive/inoperative companies have been struck off the records to cleanse the system from Benami and fictitious ‘mule’ concerns. The untiring efforts on combating money laundering and financing of financial terrorism have been appreciated by the global watchdog.

Boosting innovation

In innovation, the country has made major inroads of late, with growth in copyrights and patents, IP and trademarks rivalling that of developed economies. With the dominance of western world seriously undermined by China, that has an advantage in critical technology and rare minerals areas, we need to pay special attention to this area of importance, ushering in a dynamic model of academia-institutions-industry collaboration.

Remarkably, Indian start-ups have done well, thanks to the government’s hand holding (Fund of Funds for Startups) and funding support, countering the the funding winter post the Silicon Valley Bank fiasco in US, and trade related uncertainties.

Public offerings of many a successful start-up (since 2014-15, there have been 764 public issuances on mainboard (IPOs/FPOs/OFS etc, while similar SME issuances stand at 1200-plus (YTD), hitting the board) have cemented the role of capital markets in facilitating seamless ease of exit for marquee investors. The circularity of capital, with a multiplier effect, helps younger firms to access funds at different lifecycle stages.

India being considered for inclusion in Global bond indices (a watermark moment from the present EM indices) would necessitate recalibration of our debt market, and vast doses of funding would be required for financing multi model infrastructure (NIP/NMP/PM GatiShakti).

Thus, Indian private firms now need to think in global terms, firmly rooting Brand India across the world, onboarding the vast talent pool of Indian diaspora.

The writer is member, 16th Finance Commission, PMEAC and Group Chief Economic Advisor, State Bank of India. Views expressed are personal

Published on September 25, 2025