Contribution to the growth and development of Small Scale and other enterprises in the State of West Bengal:

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. 

The Corporation 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 10,000 

Give one point for each correct answer and assess your score as follows :

10 points : You are a computer geek. You can frame our next cyberquiz. 

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0-2 points : Poor. Aren't you aware that we are entering 21st century ? 

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