The State Financial Corporations were set up under the State Financial Corporations Act, 1951, in the wake of the setting up of the Industrial Finance Corporation of India at the national level in 1948. The SFCs grew as the only source and providers of long term institutional finance for the SSI at the grass root level since the advent of industrialisation in the independent India.
The growth in assistance extended by the SFCs was rather slow before 1970-71. It picked up momentum, recording an average growth rate of 27% (in the total amount of assistance extended by all the SFCs together), during the seventies. However, the activities of the State Financial Corporations really took off in the eighties. During 1985-86, aggregate sanctions of all the SFCs together crossed the Rs.1,000 crore mark, reaching Rs.1,030 crores.
West Bengal Financial Corporation was set up in 19 54. The Corporation also attained a break-through in performance during the 80s. The performance of this Corporation during the decade 1981-82 to 1990-91 registered growth in all the segments viz. sanction, disbursement and recovery as visible from the table below :
(Amount in Rs. Lakh)FYs Sanction Disbursement Recovery
No. Amount Amount Amount
1981-82 545 1536 627 154
1982-83 894 1920 1007 251
1983-84 1314 2486 1198 306
1984-85 2162 2750 1569 381
1985-86 1581 3315 2087 594
1986-87 1653 4080 2637 600
1987-88 3229 5017 3013 856
1988-89 2557 5431 3698 1097
1989-90 2934 6059 4206 1431
1990-91 2701 6235 4279 1718
A study of this Corporation's performance in the present decade cannot be made on an isolated basis without reference to the changes which took place in the socio-economic set up in the State during the recent years.
The State has a stable government. A strong industrial structure can rest on a viable and dominant agricultural set up. Over the years this State had undergone a silent agricultural revolution which brought an increased production of jute, oil seeds, potatoes, rice and vegetables. The rural prosperity has been possible because of the well-coordinated functioning of the Panchayat System. Consequently West Bengal should be a feeder of, and serve as, a market for the raw materials and finished goods.
The industrial and economic scenario prevailing in the State of West Bengal are indicative of the fact that the State is now poised for significant industrial growth. A number of projects are on the way to implementation. Some mega projects are on the verge of commissioning.
The State will dominate the petro-chemical sector of the country in the years ahead. The completion of the mega petrochem project - Haldia Petro Chemical project would help blossom a long range of downstream industrial units and activities in the State.
The State Government also, initiated a number of steps for improvement of the infrastructural facilities in the State. The West Bengal Infrastructure Development Finance Corporation Ltd. (WBIDFC) started functioning in the State from the FY 1997-98 and it is expected to aid the process of building and upgrading the infrastructural projects in the State. The Salt Lake Electronic Complex is India's first fully integrated electronic complex. Linkages through various road projects viz. Calcutta - Durgapur Express Highway, construction of modern truck terminus at Siliguri, completion of Kona Highway Express etc. from one development / business nucleus to the other are extended and upgraded.
Construction of the new power projects at Mejia and Bakreswar and improvement in the generation of power at the existing power generation plants have made the environment highly suitable for industrial resurgence of the State of West Bengal.
Against this backdrop, West Bengal Financial Corporation has been endeavouring to identify and support industries based on agricultural products, electronics, software development etc., besides the conventional ones. As regards conventional agro-based units, the Corporation continued to identify and encourage promoters from amongst well-performing existing units to take up expansion, modernization and diversification projects.
The Corporation now relies more on internal generation rather than on refinance from IDBI/ SIDBI. Improved recovery performance coupled with better fund management made this possible.
Highlights of the performance of the Corporation during the last five years are enumerated below:
(Amount in Rs. lakh)FYs Sanction Disbursement Recovery
No. Amount Amount Amount Amount
1994-95 454 4489 3074 5513
1995-96 448 6795 4787 5768
1996-97 405 6054 5067 7003
1997-98 605 10268 7272 7776
1998-99 525 7320 6058 8231
The Corporation is fully equipped with a Consultancy Cell to extend guidance, counselling and aid the entrepreneurs in the Small and medium scale sectors in the areas like market survey, project formulation, fund management etc. The Corporation had started an Entrepreneurs Assistance Cell as far back as in 1981 a forum to ensure coordination with other co-assisting agencies and service providers to the small and medium sector industrial units, financed by the corporation.
The Corporation has an organised computerised system, duly prepared to step in the ensuing millennium. To ensure better transparency in the activities and operations of the Corporation, the Corporation has been continuously developing and strengthening the internal audit system.
The State Financial Corporations were set up with the cherished objective of catering to the small and medium enterprises. The focus was on the development of entrepreneurial skills who will have to graduate to assume further responsibilities so that the process of development continues to stream in. WBFC continues to stand for the small scale sector as evident from the share of assistance received by this sector during the last 10 years.
Because of the intensively larger exposure to the SSI sector dominated by the first generation entrepreneurs - the Corporation had to carry on considerably high volume of unrecovered dues. Over time, the recovery system and approaches have been improved and achievement in recovery is expected to reach the 100 crore mark in the near future. The capital adequacy ratio of the Corporation has improved from 2.4% in 1996-97, to 3.5% in 1997-98, to 4.39% as on 31.03.1999. Standard assets comprised 58% approx. which together with the sub-standard assets, accounted for 68% of the total outstanding assets classified as per the prevailing norms of assets classification of IDBI.
(Amount in Rs. lakh)FYs Total sanctions made by Total amount sanctioned in (5) as %
WBFC the SSI Sector of (3)
No. Amount No. Amount Amount
1989-90 2934 6059 2570 5025 83%
1990-91 2701 6235 2495 5011 80%
1991-92 2470 6469 2426 5529 85%
1992-93 900 4130 878 3549 86%
1993-94 454 3207 439 2779 87%
1994-95 454 4489 430 3260 73%
1995-96 448 6795 388 2992 44%
1996-97 405 6054 343 3023 50%
1997-98 605 10268 550 6378 62%
1998-99 525 7320 490 7168 98%
To ensure improvement, the Corporation stepped up recovery measures for the past dues. Better monitoring of the projects and timely dispensation of credit have been assigned due priorities to the ongoing projects. The project monitoring system has been made effective through the intervention of a separate cell at the head office of the Corporation.
Some times in September 1999 IDBI and SIDBI rated the 18 State Financial Corporations, of which, five SFCs viz. Delhi, Gujarat, Haryana, Kerala and Karnataka had been rated as `A'. West Bengal and Tamil Nadu were categorised under `B'. The rest eleven SFCs were put under category `C'. IDBI, however, decided that West Bengal Financial Corporation would be eligible to do business - to consider financing projects with ceiling on project cost up to Rs.12 crore and to extend loans up to Rs.240 lakhs under the Line of Credit Scheme as applicable to `A' category corporations upto March 31, 2000.
having a human resource base comprising 263 employees with multi-disciplinary
background and motivation, is expected to stand on a firmer wicket and
net better results in the years ahead.
Answers to COSIDICI Cyberquiz - 2
1 (i) Bank office/Data Centre / Accounting, (ii) Medical Transcription, (iii) Insurance Claims, (iv) Call Centres, (v) Data Base Services, and (vi) Content Development/Management.
2 Estimated at Rs.23,000 crore in 1998-99, a McKinsey report projects 15-fold growth to Rs.11 lakh crores in 2008.
3 33 (12 of which are domestic companies and rest offshore private equity funds), Rs.5,000 crores.
4 Lord Ganesh has as his vahan (vehicle) a mouse without which Internet cannot be accessed.
5 3.5 million (1998) and 1.3 billion by year 2003.
6 On 11 May 1997 when the world chess champion Garri Kasparov was defeated in a game of chess by IBM computer called Deep Blue. White (Computer) advanced a pawn to C4. Black (Kasparov) threw up his hands and resigned.
7 Half way as Half.com
8 One billion.
9 Published in 1997, it was written by Michael Dertouzos, Director, MIT Laboratory for Computer Science.
10 points : You are a computer geek. You can frame our next cyberquiz.
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