FM Sitharaman asks businesses to resolve differences, avoid litigation | Economy & Policy News

Businesses should engage constructively with the government as well as regulators and avoid turning every disagreement into litigation, Finance Minister Nirmala Sitharaman said on Tuesday, calling for greater trust, predictability and transparency among the parties.

 

“Legal recourse will always remain available, but every disagreement need not begin as litigation,” Sitharaman said at the All India Management Association’s (AIMA’s) 53rd National Management Convention.

 

She said businesses should engage early with the government, put evidence on the table, participate seriously in consultations and work towards solutions before differences become disputes.

 

“Trust between businesses cannot be demanded; it has to be built through conduct on both sides,” Sitharaman said.

  

Businesses, too, must provide predictability, transparency and a willingness to listen, she said, adding that a mature economy should be capable of handling disagreements without immediately becoming adversarial.

 

Sitharaman also called for greater institutionalisation of Indian businesses, saying the challenge over the next 20 years would not simply be to create more startups but to ensure that today’s startups grow into large, professionally managed and enduring corporations.

 

“The real prize is not how many unicorns we create, but how many endure — turning today’s startups into tomorrow’s big corporations,” she said.

 

She said management institutions and established corporate leaders could help startups make the transition from founder-led ventures to institution-led companies without losing the entrepreneurial energy that drove their creation.

 

The same institutionalisation challenge also extends to India’s family-owned businesses, she said.

 

A large share of the country’s micro, small and medium enterprises (MSMEs) and mid-sized businesses are family-owned. While many have strong products, loyal customers and significant growth potential, their expansion can be held back by unclear roles, succession disputes, informal decision-making and disagreements within the family, she said.

 

“The challenge is often not entrepreneurship, but institutionalisation,” Sitharaman said, calling for greater professionalisation through separation of ownership from management, clearly defined responsibilities, preparation of the next generation and resolution of conflicts before they affect the business.

 

She said AIMA could expand short, practical programmes for family businesses covering succession planning, governance, professionalisation, conflict management and delegation.

 

Sitharaman also called for an overhaul of management curricula to reflect today’s techno-economic realities and promote greater interdisciplinary learning.

 

Managers today need a stronger grounding in geopolitical and supply-chain risks, climate risk, behavioural science, data, regulation and technology-aided project execution, she said.

 

She urged management institutions to produce leaders capable of connecting different disciplines rather than operating within functional silos.