Family Businesses as a Pillar of Viksit Bharat

This article was first published in the Economic Times on January 29, 2026; https://economictimes.indiatimes.com/news/company/corporate-trends/family-businesses-as-a-pillar-of-viksit-bharat/articleshow/127759602.cms?from=mdr

Introduction: The Missing Big Idea

In a recent letter to the Finance Minister published in the Times of India, Duvvuri Subbarao, former governor of the Reserve Bank of India, posed a question that goes to the heart of India’s economic moment. If Viksit Bharat is the overarching vision of this government, what does it mean in concrete terms, and how are annual budgets aligned to that vision? Drawing a parallel with Manmohan Singh’s landmark 1991 budget, where the “big idea” was liberalisation, Subbarao asks what the equivalent organising principle is today.

This article argues that one such pillar of Viksit Bharat must be explicitly recognised and supported: India’s family businesses. The objective here is twofold. First, to situate family enterprises historically and empirically as engines of nation building. Second, to outline what the Finance Minister can do, through policy and budgetary choices, to enable family businesses to contribute responsibly, transparently, and sustainably to India’s development journey.

Family Businesses and Nation Building: A Historical Constant

Family businesses are the oldest and most enduring organisational form across nations. In India, family enterprises have long been builders of physical infrastructure, educational institutions, healthcare systems, and local employment. At India’s current stage of development, where the need for infrastructure, patient capital, and institution building is acute, these characteristics matter deeply.

History offers a useful parallel. In the late nineteenth and early twentieth centuries, the United States witnessed massive infrastructure creation led by business families such as the Vanderbilts, the Carnegies, and the Rockefellers. Railroads, steel, oil, and finance were shaped by families willing to take long-term risks at scale. These families helped build the economic foundations of modern America.

India today stands at a comparable inflection point. Large family-controlled business groups are deeply involved in roads, ports, renewable energy, logistics, manufacturing, education, and healthcare. These are sectors where long gestation periods and intergenerational commitment are advantages rather than liabilities.

Lessons from the Robber Barons

Yet history also cautions us. Many of the American families who built that infrastructure later came to be labelled “robber barons”. Some lost legitimacy due to concentration of power, weak governance, opaque practices, and an inability to manage succession effectively. Several family empires fragmented or faded, not because of lack of wealth, but because institutions did not evolve alongside scale.

This is a lesson India must take seriously. The choice is not between celebrating or constraining family businesses. The real policy challenge is to fuel entrepreneurial energy while embedding governance, transparency, and meritocracy. Without this balance, family capitalism risks public backlash and private decline.

Why Family Businesses Matter for Viksit Bharat

If Viksit Bharat is about sustained prosperity, social stability, and institutional depth, family businesses are uniquely positioned to contribute in four ways.

First, they provide patient capital. Family owners are often willing to invest across cycles, absorb short-term volatility, and commit to long-horizon projects that are unattractive to purely financial investors.

Second, they anchor local economies. Family enterprises are embedded in regions and communities, making them critical to employment generation, skill formation, and social cohesion.

Third, they enable institutional philanthropy. Many of India’s educational and healthcare institutions have been built by business families, often long before corporate social responsibility became mandatory.

Fourth, they ensure continuity. In a world of rapid managerial churn, family ownership can provide strategic consistency, provided governance systems are robust.

Policy Lessons from Other Economies

Across several jurisdictions, governments are beginning to recognise family enterprises as distinct economic actors whose long-term orientation and ownership continuity require tailored policy responses. As documented by Tharawat Magazine , this shift reflects an understanding that family businesses contribute disproportionately to employment, capital formation, and institutional stability, yet face structural vulnerabilities during succession and ownership transition that generic corporate policy does not address. The emerging response is not to privilege family firms indiscriminately, but to make them visible within the policy architecture.

This recognition has taken different institutional forms. In the United States, the creation of a bipartisan Family Business Caucus within Congress signals an effort to ensure that family enterprises are explicitly considered in legislative and regulatory debates. In Poland and Canada, legal and tax reforms have focused on reducing the cost and complexity of intergenerational transfers, acknowledging that poorly managed succession can destroy productive capacity and jobs. In the United Arab Emirates, a dedicated Family Companies Law, supported by state-backed institutions, seeks to codify governance, succession, and dispute resolution mechanisms, positioning family firms as long-term partners in national economic strategy. Hong Kong, meanwhile, has focused on building an ecosystem around family capital and family offices, combining regulatory adjustments with investments in institutional capacity for stewardship and legacy planning.

What unites these diverse approaches, as Tharawat Magazine underscores, is a move away from treating family ownership as incidental. Instead, policy frameworks increasingly aim to align continuity with governance, transparency, and professionalisation. The lesson for India is not to replicate any one model, but to recognise that if family businesses are to anchor Viksit Bharat, they must be deliberately integrated into policy design, fiscal incentives, and economic measurement, rather than remaining an invisible yet systemically important segment of the economy. 

Policy Recommendations

If robust family businesses are to be a measurable pillar of Viksit Bharat, policy intent must translate into administratively actionable and fiscally grounded measures.

First, formal recognition of family enterprises: The Union Budget can announce a formal definition of family businesses, notified jointly by the Ministry of Finance and the Ministry of Corporate Affairs. This would allow family enterprises to be recognised as a distinct category for policy design, without creating a new regulatory burden. Budget documents can mandate periodic data collection through MCA filings, enabling evidence-based policymaking.

Second, governance-linked fiscal incentives: Under the Direct Tax framework administered by the Central Board of Direct Taxes, targeted deductions or concessional tax treatment can be offered to family enterprises that meet specified governance benchmarks. These may include independent directors, documented succession plans, audited family constitutions, and separation of ownership and management. This aligns tax policy with long-term institutionalisation rather than short-term compliance.

Third, succession and continuity financing: The Budget can create a dedicated Succession and Continuity Credit Window, routed through public sector banks and development finance institutions. Backed by partial government guarantees, this facility would support ownership transitions during generational change, preventing distress sales, fragmentation, and employment loss. This intervention sits squarely within the Ministry of Finance’s financial stability and credit flow mandate.

Fourth, targeted public expenditure for family-led nation building: Capital expenditure allocations for infrastructure, education, healthcare, and energy transition can explicitly prioritise public–private partnerships anchored by long-term family ownership. Viability gap funding and concessional finance can be linked to governance and transparency standards, ensuring that public funds support stewardship-oriented capital rather than short-term extraction.

Fifth, next-generation capability development: Budgetary support can be provided under skilling and higher education heads, in coordination with the Ministries of Skill Development and Entrepreneurship, and Education, for structured leadership and governance programmes tailored to next-generation family members. Treating succession as a national economic continuity issue reframes it from a private family matter to a public interest concern. 

Measuring Progress: Integrating Family Business Health into Economic Reporting

If Viksit Bharat is to move beyond aspiration, it requires metrics embedded in official economic reporting. One such metric should be the robustness of India’s family business ecosystem.

The Finance Ministry can mandate the creation of a Family Business Development Index, published periodically alongside existing economic indicators. This composite index could track intergenerational survival rates, governance quality, professional management penetration, employment contribution, reinvestment rates, and participation in national priority sectors.

Such reporting would serve three purposes. It would signal that stewardship-based capitalism matters to India’s development vision. It would create incentives for business families to institutionalise governance and succession practices. And it would give policymakers an early warning system for stress in a segment that employs millions and anchors regional economies.

Conclusion: A Call for Early Attention

Embedding family businesses as a pillar of Viksit Bharat will not happen overnight. It may not be feasible to incorporate many of these ideas in the forthcoming budget. Policy design, inter-ministerial coordination, and institutional alignment take time.

But that is precisely why the conversation must begin now. As an early set of ideas for the next budget cycle, this article urges the Finance Minister to take notice. If India wants development that is durable, inclusive, and institutionally sound, it must look closely at the families that build, own, and steward its enterprises.

Viksit Bharat will not be built by capital alone. It will be built by families who think beyond one generation, supported by policies that reward responsibility as much as ambition.

Tata Group shows why institutional memory is a Strategic Asset

N Chandrasekaran taking over from Ratan Tata was not simply a baton pass, it was a transmission of deeper ethos

This article was first published in Forbes India, December 22, 2025; https://www.forbesindia.com/amp/article/leadership/tata-group-shows-why-institutional-memory-is-a-strategic-asset/2989628/1

The Tata Group has recently drawn scrutiny over a listing debate, successor development, transparency at the trusts, and a plane crash. Such issues warrant attention, but they need to be placed within a longer institutional arc: This is a 157-year-old enterprise shaped by cumulative decisions, leadership philosophies and governance choices across generations. 

In the pursuit of agility and short-term performance, organisations often trade continuity for efficiency. One casualty of this trade-off is institutional memory. Although it is a strategic asset, most firms fail to document, transmit, or protect it. Yet for family businesses, where stewardship extends across generations and identity is inseparable from values, institutional memory is foundational.

The Tata Group exemplifies this proposition. Consider the 26/11 terrorist attacks in Mumbai, which left the Taj Mahal Palace Hotel, a symbol of Indian hospitality, under siege for nearly 60 hours. What followed was not merely a textbook case in operational resilience or crisis management, but also a masterclass in empathetic leadership, values-driven decision-making, and cultural clarity. Employees did not abandon their posts. Some led guests to safety; others formed human shields. Several perished in their efforts to protect others. Lives were lost, but not principles.

The Tata Group, led then by Ratan Tata, responded with moral clarity. A dedicated Trust was established not only to support the families of the affected employees and guests, but also railway staff, street vendors, police personnel, and even pedestrians who had suffered during the attack. This response was an extension of the group's longstanding values rather than a PR-mandated reaction. The Harvard Business School case study, The Ordinary Heroes of the Taj, underscored that not a single employee left the hotel to save their own life. This was not training, it was character.

That such behaviour could manifest across ranks and functions without explicit instruction speaks volumes about institutional culture and memory. It is not born of mission statements or crisis manuals. It is cultivated through leadership modelling, lived values, and an intergenerational understanding of what the institution represents.

Fast forward to 2024. An Air India aircraft, operated by the now Tata-owned airline, heart wrenchingly crashed in Ahmedabad. Within hours, the group’s leadership swung into action. Assistance was swiftly mobilised for victims and their families. Information was disseminated transparently. The chairman of Tata Sons, N. Chandrasekaran, was visible, present, and deeply engaged. The response had all the hallmarks of organisational muscle memory: calm, humane, decisive.

To those who have studied the Tata Group, this is not surprising. Chandrasekaran, the first non-family executive to lead Tata Sons, is not an outsider. His professional journey, spanning decades within the Tata ecosystem, including his stewardship of TCS, has steeped him in the Group’s cultural DNA. He represents not a break from the Tata tradition, but its professionalised continuation. His response in Ahmedabad was, in many ways, an extension of the Group’s 26/11 playbook. Not copied, but remembered. Not repeated, but reflexive.

This intergenerational consistency is what makes the Tata Group a case study in institutional memory. Memory, in this context, is not passive. It is performative. It lives in how decisions are made under pressure, how priorities are set in moments of ambiguity, and how organisations treat their most vulnerable stakeholders in times of crisis.

Family businesses, particularly those operating across generations, must internalise this lesson. Institutional memory is more than history. It is the core operating system. It shapes instinct, not just protocol. But for memory to endure, it must be deliberately cultivated. Stories must be documented. Experiences must be codified. Values must be articulated through lived examples, not slogans.

Organisations can institutionalise memory through several channels: structured onboarding that includes legacy narratives; crisis handbooks that document prior responses and lessons; leadership development that focuses on intergenerational transmission of values; and retention strategies for long-serving employees who act as memory-carriers. Oral histories, archival projects, and annual commemorations can serve as vital rituals that reinforce institutional continuity.

Moreover, succession planning in family businesses must go beyond capability assessments to include cultural alignment. The successor need not mirror the founder but must carry the flame. When N. Chandrasekaran took over from Ratan Tata, it was not simply a baton pass; it was a transmission of a deeper ethos. He was not merely chosen for his operational excellence, but for his fidelity to the Tata way of doing things. That fidelity was visible in how the Group responded to the Ahmedabad air crash- swiftly, compassionately, and without showmanship.

Critics often argue that institutional memory can ossify an organisation. But the Tata example suggests otherwise. Memory does not mean stagnation. When well-curated, it enables firms to evolve without losing their soul. In a world that prizes reinvention, family businesses must resist the temptation to discard the past in the name of agility. 

Institutional memory also helps professional managers operate with conviction in the absence of constant oversight. It becomes the unwritten code of conduct. If culture is what people do when no one is watching, institutional memory is what guides them when no one is instructing.

As family businesses across the globe strive for scale and relevance in a rapidly shifting landscape, the question they must ask is not only what legacy they will leave, but also how that legacy will be remembered, transmitted, and applied. The Tata Group provides a compelling answer: institutional memory, when paired with moral clarity, is not just a relic of the past. It is a strategic asset for the future.