Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India; Part-Time Member, Economic Advisory Council to the Prime Minister; and Member, 16th Finance Commission, brings a distinctive, data-led lens to understanding India’s economic transformation. His work goes beyond headline numbers to examine what the data reveals about people, households and communities: the growing financial empowerment of women, the formalisation and financialisation of household savings, the rise of smaller cities and the ability of even the smallest borrowers to participate meaningfully in the financial system. At the heart of his approach is a simple but powerful conviction: that data, when read closely and applied intelligently, can make economic policy more relevant to the lives of ordinary Indians.

In this conversation, Dr Ghosh brings that lens to India’s next phase of growth. From his belief that resilience is the defining strength of the Indian economy to his conviction that wealth creation must become a national phenomenon, reaching Tier-2, Tier-3 and Tier-4 India, he makes a compelling case for looking beyond the metros and beyond conventional indicators. His message to policymakers is equally clear: look at the hard data, understand what is working, and be willing to change course when the evidence demands it. His ability to connect macroeconomic shifts with the realities of people and communities makes this a particularly insightful conversation, and a genuine honour to feature Dr Ghosh and his perspectives in our newsletter.

Q1. Over the last few decades, we have seen economic liberalisation in the 1990s, the global financial crisis, demonetisation, GST and the lockdown. What is the one thing that, according to you, has defined the Indian economy through all these changes?

Dr Ghosh: The one thing that stands out is India's resilience. Since 1991, when we went through the balance-of-payments crisis and liberalisation, there have been many shocks: the 2001 attacks, the 2008 global financial crisis, the 2020 pandemic and its second wave, and the war in 2022. Since 2020, every year has brought some political or economic disruption.
We have faced every crisis admirably. In 2008, when banks were failing across the world, not a single bank in India failed. After demonetisation, there was a significant push towards digitisation. After the pandemic, people became far more health-conscious. Every disruption has made the Indian people more resilient and more energetic, and so the Indian economy as well.
In fact, 2026 has been the year of the most disruptions. The war has been continuing for the last three months, and even then, the Indian economy has stood up and delivered very good growth. Overall, it is the willpower and resilience of India's 144 crore people that make up the economy, in times of stress and in times of opportunity.

Q2. Is there something we are still missing, something that could help us progress further?

Dr Ghosh: India has done a great deal: digitisation, formalisation of the economy, and bringing people out of poverty over the last 20 years. Empowering women is the most important part of it. Women are now the majority of beneficiaries in most government programmes, and they hold a significant share of bank deposits, which was not the case earlier. The area where there could be more work is infrastructure. We are building it, but we now have to go beyond the metros to tier-2 and tier-3 cities, to our panchayats and local bodies. We need to strengthen them further so that delivery can happen at the grassroots level. The government is working on this, and over time it will get stronger.

Q3. How long might that gap take to close?

Dr Ghosh: It is a continuous process. You may be surprised to learn that taxpayer data now shows people in smaller cities paying taxes in large proportions, not just in Mumbai, Bengaluru, Delhi or Kolkata. If you travel through the hinterland, you will see that rural infrastructure is highly developed today. The boundary between rural and urban has blurred in terms of infrastructure.
So, the gap is narrowing, and as we build more infrastructure across the country, it will narrow further. It will also give people in these smaller cities the opportunity to take their businesses and exports to wider markets.

Q4. What will drive India's next big wave of wealth creation?

Dr Ghosh: Wealth is already being created. Look at the number of demat accounts compared with five years ago; it has multiplied. Households are diversifying their savings. They are investing more in mutual funds and equities, and a smaller portion in bank deposits. This is the financialisation of household savings, and the more of it we have, the more wealth will be created.
My sense is that wealth creation should become a national phenomenon. As India moves towards becoming a developed country, it should happen in tier-2, tier-3 and tier-4 cities as well, and not be restricted to the metropolitan cities.

Q5. If you had to pick one metric that business leaders focus on too much, and one they should focus on, what would they be?

Dr Ghosh: I would say they should focus on technology. New sectors are coming into existence, such as renewables, data centres, healthcare, defence and aerospace. The challenge will be to maintain a delicate balance between the capital that is coming in and the labour force. As India develops, corporate leaders will have to balance these emerging sectors and opportunities against labour requirements, so that the needs of both human capital and human labour are served.

Q6. As an economist India trusts and respects, what is your passion in the area of economic development?

Dr Ghosh: I look at the data a great deal. Data is often called the new oil, because it shows you what transformations are happening. A good example is the Jan Dhan scheme, under which close to 55 to 60 crore accounts have been opened for the poor. When we looked at the data, we found that in the areas where these accounts were opened, crime rates came down, because people had more money in the bank. We also found that women were more empowered in those areas, because the accounts were used for regular remittances.
The most important thing is to look at the data and use it for real-time policymaking. Economics can give very good ideas if you tailor it to the data. What we are taught in textbooks may not hold true all the time, so you need to integrate real-time data to make policy meaningful for the common masses. That is the objective for anyone involved in policymaking.

Q7. Is there another data set that has stood out for you?

Dr Ghosh: Yes, one on repayment. When you take a loan, a bank looks at how you repay so that it can lend to you again; that is your credit history. The government runs the PM SVANidhi scheme, which gives loans of around ₹10,000 to street vendors. If they repay the ₹10,000, they become eligible for ₹20,000, and if they repay that, they become eligible for ₹50,000.
You would not believe how many of them repaid the ₹10,000 and then the ₹20,000 to get the ₹50,000 loan. If you look at the credit bureau data, even poor people are better borrowers than we sometimes assume. If you make a person responsible and give them money, they will use it responsibly.
The data also consistently shows that women are the best custodians of household finances. This holds across the different levels of society, and it is one of the good things that has happened in rural India.

Q8. Any final words of wisdom for policymakers on what to focus on now?

Dr Ghosh: Policymakers should look at the hard data. They should see which policies are effective and which are not. There is no harm in changing a policy midway. If you wanted outcome A and the outcome is actually B, you can always tweak the policy to bring about the desired result. A policy has to work for the section of society it is intended for.
When the data shows certain trends, that is the base. At the State Bank of India, we account for around 22 percent of the Indian economy, so any data trend that comes to us tells us what is happening and what is likely to happen.
Take the example of cash transfers to women, which many state governments now give. We found that women are using that money for health and education, which is a very welcome development. You do not need to torture the data, but you do need to look at it and see how it can be used for the betterment of mankind. Keep that in mind, and all else will follow.