Financial systems must remain connected to real economy, PM’s principal secretary PK Mishra cautions against speculation

Principal secretary to Prime minister Narendra Modi, PK Mishra, on Saturday cautioned that financial systems should remain connected to the real economy and everyday lives of citizens, warning against risks arising from excessive speculation and instability in markets, ANI reported.Addressing the 20th convocation ceremony of the National Institute of Bank Management (NIBM) in Pune, Mishra said financial systems should not drift away from productive economic activity.“Financial systems cannot become disconnected from the real economy and lives of ordinary citizens. Excessive speculation, irresponsible lending, unsustainable leverage and instability in financial markets can create disruptions,” he said.At the same time, Mishra highlighted the role of India’s digital public infrastructure in transforming financial inclusion and expanding access to banking, digital payments and formal credit.“In India, this convergence of finance and technology has enabled the creation of one of the world's most ambitious and inclusive digital public infrastructures,” Mishra said, ANI quoted him as saying.He said the JAM trinity — Jan Dhan accounts, Aadhaar and mobile connectivity — has significantly reshaped the reach of India's banking ecosystem.“The Pradhan Mantri Jan Dhan Yojana brought crores of people, unbanked citizens, into the formal banking system. Aadhaar created a verifiable digital identity architecture at an unprecedented scale. Mobile connectivity provided the final layer of access,” Mishra said.Referring to India's digital payment ecosystem, he highlighted the rapid growth of the Unified Payments Interface (UPI), describing it as one of the world's largest real-time payment systems.“In less than a decade, India has built the world's largest real-time digital payment ecosystem. From just 2 crore transactions in 2016-17, UPI now processes over 25,000 crore transactions annually,” he said.Mishra said one of the biggest achievements of the digital payments revolution was expanding access to formal finance across both rural and urban India.“A small tea seller in a village or a professional in a metropolitan city can today transact through the same interoperable digital payment infrastructure,” he said.He also noted that digital transaction records are increasingly creating formal credit histories for individuals who previously lacked collateral or banking relationships.“Every payment made, every purchase recorded, every transfer completed, leaves behind a data trail. And that data trail over time can become the basis for a credit history, for those who have no formal credit record, no collateral to offer, and no prior relationship with the bank,” Mishra said.Emphasising the broader objective of financial inclusion, he said access to financial services should ultimately translate into economic opportunities.“True inclusion must ultimately create productive economic opportunities,” he said.Highlighting the government’s Mudra scheme, Mishra said over 57 crore loans worth around Rs 40 lakh crore have been sanctioned to micro, small and medium enterprises, benefiting a large number of women and people from marginalised communities.“Behind every Mudra loan lies a human story, a tailoring business expanded, a small workshop modernised, a transport vehicle purchased, a family enterprise stabilised, and a first business opportunity created,” he said.