New Delhi: Finance Minister Nirmala Sitharaman on Tuesday urged corporates to avoid taking every disagreement to court and focus on strengthening corporate governance mechanisms.
Emphasising that sound corporate governance is not simply a set of external codes to be adopted, she said it also depends on the standards institutions set for themselves.
Trust between businesses cannot be demanded; it has to be built through conduct on both sides, she said at an AIMA event here.
“Businesses must engage constructively with government and regulators. Legal recourse will always remain available, but every disagreement need not begin as litigation. There is considerable value in engaging early, placing evidence on the table, participating seriously in consultations and working towards solutions before differences become disputes,” she noted.
Equally, businesses must provide predictability, transparency and a willingness to listen, she said, adding that a mature economy should be capable of disagreement without immediately becoming adversarial.
Sitharaman urged Indian Inc to focus not just on scale but also on building stronger, more resilient, and better-governed enterprises as the country works towards the goal of Viksit Bharat by 2047.
Indian industry needs to build institutions that combine scale with durability, higher quality, better governance and deeper technological capabilities, she said.
“India today has the scale of market, the entrepreneurial energy and the institutional capacity to aim much higher. Execution will determine how successfully we convert these strengths into lasting national capability,” she said.
The contribution of Indian management would be measured by the quality of enterprises and institutions being built today as the country moves toward Viksit Bharat by 2047, she noted.
The minister urged industry to focus on creating companies that are not merely bigger, but better, competitive, innovative, trusted and resilient enough to contribute to India’s growth over the coming decades.
Highlighting that India’s next phase of growth must be built on quality, Sitharaman said corporates need to spend more on R&D, either in-house or through collaboration with academia.
This will help in driving innovation and improving existing products, the minister said, adding that higher R&D expenditure should also translate into more intellectual property being created in and from India.
“Our ambition must move from ‘Made in India’ to ‘Imagined in India’ products not only manufactured here, but conceived, designed and technologically developed here, and then taken to markets across the world,” she said.
India’s Gross Expenditure on R&D stands at 0.83 per cent of GDP, far below the OECD average (2.7 per cent), China (2.6 per cent), and the US (3.5 per cent), reflecting a persistent shortfall in private-sector R&D depth, where the domestic private sector contributes just 36 per cent compared to over 70 per cent in leading advanced economies, she noted.
Sitharaman also underlined the need for building capability management education and designing short, practical courses for founders and early employees on hiring, delegation, financial discipline, customer management, compliance and building systems.
Besides, there is a need for practical programmes for family businesses covering succession planning, governance, professionalisation, conflict management and delegation.
The Finance Minister also urged corporate leadership to avoid designing only for the formal urban elite.
“India’s consumption base rests on working families across agriculture, rural construction, transport, and informal enterprise. If corporate India pursues premiumisation for the urban tier alone, growth will lose its structural durability,” she said.
The opportunity is also broadening as the government opens sectors such as space and nuclear energy to greater private participation; more of India’s development needs can be met through the market, and industry must step forward to meet them, she added.
