Performance of Development Financial Institutions in India
PERFORMANCE OF DEVELOPMENT FINANCIAL INSTITUTIONS IN INDIA
EVOLUTION:
After the end of World War-II there was great need for speedy industrial expansion in the whole world. Both winners and losers had to resurrect and to rebuild their economies from the ruins of war. Development Financial Institurions (DFI) were set up in almost all the countries of the world and the models were suited to their economic, social and cultural values.
Similarly in India there was scarcity of finance which was a big hurdle in way of industrial development. The means of providing finance for large scale industries were not adequate. Moreover new enterprises, projects in backward areas and the projects which by their very nature involve huge capital and the projects with long gestation periods owing to the nature of the technology or product sophistication found it difficult to mobilise funds. To cater to these kinds of projects for which adequate long term financing were required , the Government of India decided to set up a series of financial institutions to provide funds to the large industrial sector. These DFIs were set up on the model of “Industrial Bank Of Japan”.Also with the introduction of Five Year Plans the need for these kind of financial institutions was felt all the more.
INDUSTRIAL FINANCIAL INSTITUTIONS IN INDIA:
The major post-independence institutional innovations of relevance to long and medium term finance for the industry can be grouped as below:
National Level Industrial Development Banks
Industrial Development Bank of India (IDBI)
Industrial Finance Corporation of India (IFCI)
Industrial Credit and Investment Corpn. of India (ICICI)
Small Industries Development Bank of India (SIDBI)
Industrial Reconstruction Bank of India (IRBI)
Shipping Credit and Investment Company of India (SCICI)
Specialised Financial Institutions
Technology Development & Information Company of India Limited (TDICI)
Risk Capital & Technology Finance Corporation Limited (RCTC)
Tourism
EVOLUTION:
After the end of World War-II there was great need for speedy industrial expansion in the whole world. Both winners and losers had to resurrect and to rebuild their economies from the ruins of war. Development Financial Institurions (DFI) were set up in almost all the countries of the world and the models were suited to their economic, social and cultural values.
Similarly in India there was scarcity of finance which was a big hurdle in way of industrial development. The means of providing finance for large scale industries were not adequate. Moreover new enterprises, projects in backward areas and the projects which by their very nature involve huge capital and the projects with long gestation periods owing to the nature of the technology or product sophistication found it difficult to mobilise funds. To cater to these kinds of projects for which adequate long term financing were required , the Government of India decided to set up a series of financial institutions to provide funds to the large industrial sector. These DFIs were set up on the model of “Industrial Bank Of Japan”.Also with the introduction of Five Year Plans the need for these kind of financial institutions was felt all the more.
INDUSTRIAL FINANCIAL INSTITUTIONS IN INDIA:
The major post-independence institutional innovations of relevance to long and medium term finance for the industry can be grouped as below:
National Level Industrial Development Banks
Industrial Development Bank of India (IDBI)
Industrial Finance Corporation of India (IFCI)
Industrial Credit and Investment Corpn. of India (ICICI)
Small Industries Development Bank of India (SIDBI)
Industrial Reconstruction Bank of India (IRBI)
Shipping Credit and Investment Company of India (SCICI)
Specialised Financial Institutions
Technology Development & Information Company of India Limited (TDICI)
Risk Capital & Technology Finance Corporation Limited (RCTC)
Tourism