Neelkanth Mishra Says Fiscal Discipline Cut Cost of Capital in India
World Bank executive director Neelkanth Mishra said India's tight budget management helped tame inflation to a decadal low of 2.06% last fiscal year, lowering borrowing costs. He also cast doubt on some incentive schemes and urged skills-based jobs abroad for young Indians.
World Bank executive director Neelkanth Mishra said on November 13, 2026, that India's fiscal discipline cut cost of capital for businesses, in an interview given ahead of the 24th Hindustan Times Leadership Summit. The summit opens in New Delhi on November 14. Mishra is in charge of India, Sri Lanka, Bangladesh and Bhutan at the bank.
He called the control of inflation one of the most transformative developments of the past 10 years. "We have done that by being very disciplined on the fiscal side," Mishra said. That, in turn, brought down the cost of capital, meaning what it costs businesses to raise money.
Inflation and company numbers
India's consumer inflation stood at 10.5% in FY13, Mishra said. It fell to 3.41% in FY19, rose again, then dropped to a decadal low of 2.06% last fiscal year.
He described the government's message to business in plain terms. "Now, effectively, the government is telling the private sector and the entrepreneurs, you know what, money in your hands is more productive than in my hands," he said.
Entrepreneurs appear to have listened. The number of active companies in India is up by a third in three years, to 2.2 million from 1.6 million, Mishra said. "It is remarkable," he added.
Technology and small business
Mishra said artificial intelligence and the Aadhaar-based digital public infrastructure could help India's small and medium businesses. He noted that India has five to six million software engineers who tell a computer what to do.
"Imagine if that is 100 million people," he said.
Doubts over incentive schemes
Electronics performed well under India's performance-linked incentive (PLI) schemes. Mishra was less sure other sectors would repeat that success under free trade agreements. "I'm not sure that in the current design, the PLI schemes may be very functional," he said.
He said the mobile scheme worked nicely because it rewarded scale. Using footwear as an example, he said a buyer such as Nike is not interested in contracting half a million or one million pairs. Unless a supplier can offer 20 million or 50 million pairs, it does not make sense for the buyer to engage.
Jobs abroad for young Indians
Mishra said India should help young Indians find work in countries with ageing populations. He named Japan, the UK, the US and Australia. Controlled, skills-based migration would avoid problems of assimilation and resistance to immigration, he said, for example by agreeing to send 200,000 people with specific skills.
That would require country-to-country coordination and 10 to 15 years to reach scale. India has migration and mobility partnership agreements with more than two dozen countries. At scale, Mishra said, the approach could absorb a fourth of India's incremental workforce.
An expert said the road ahead is hard despite the potential. Some countries feel India is dumping labor, the expert said, and there is a strong right-wing social backlash in some of them.
