Finance Minister Tells Businesses to Look Past Rich Urban Markets

Union Finance Minister Nirmala Sitharaman warned corporate leaders that chasing only the formal urban elite will cause economic growth to lose its structural durability. Speaking at the Platinum Jubilee Convention of the All India Management Association on Tuesday, she stated that future consumption will come from upward mobility and higher discretionary spending. She noted that demographic shifts like a rising median age, lower youth dependency, and greater longevity are moving household budgets toward healthcare, wellness, consumer durables, and quality services. India's core consumption base rests on working families in agriculture, rural construction, transport, and informal enterprises. Sitharaman also urged industry to step up and meet development needs as the government opens sectors such as space and nuclear energy to private participation. Private Final Consumption Expenditure accounted for 55.6% of India's GDP in the first quarter of 2026-27 at current prices, posting a real growth rate of 7.1% in April-June compared to 6.8% a year ago. She called for quality to become a national movement across factories, boardrooms, and research teams to achieve higher standards and fewer defects. Pointing out that India's gross expenditure on R&D stands at 0.83% of GDP—far below the OECD average of 2.7%, China's 2.6%, and the US's 3.5%—she asked corporates to spend more on research and intellectual property. Businesses must move from 'Made in India' to 'Imagined in India' by handling design, patents, and technology locally. On corporate governance, she advised businesses to engage early with regulators and avoid turning every disagreement into litigation. She also highlighted that family-run businesses and MSMEs need professionalisation, clear succession plans, and a separation of ownership from management to avoid growth hurdles.