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The Government of India set up the IFCI

under IFCI Act in July 1948.

It is the first development financialinstitution in the county to cater to the

long-term finance needs of the industrialsectors.

The main objective of IFCI is to making

medium & long term credits more readilyavailable for industrial concerns in India.

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The main focus of The Industrial FinanceCorporation was to provide long-termfinancial benefits to various sectors inIndian industry and it has fulfilled it quiteefficiently. IFCI has also been quitesubservient in implementing the number

of things that the Government of Indiaplanned up to ensure financial benefitsinto services. IFCI carried out all theresponsibilities regarding Government's

industrial policy initiatives till theestablishment of ICICI in 1955 and IDBI in1964.

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Government of India came forward toset up the Industrial Finance Corporationof India. (IFCI) in July 1948 under aSpecial Act. The Industrial DevelopmentBank of India, scheduled banks,insurance companies, investment trustsand co-operative banks are the

shareholders of IFCI. The Government ofIndia guaranteed the repayment ofcapital and the payment of a minimumannual dividend

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The Corporation has 13 member Board ofDirectors.

Chairman : Appointed by Govt. of India afterconsulting IDBI.

12 Directors : Four are nominated by IDBITwo by scheduled BanksTwo by Cooperative BanksTwo by other financial

InstitutionsTwo outside persons as Directors

(Expert in the Fields of Industry, Labour andEconomics)

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1.Share Capital : The IFCI was set up with anaut

horised capital of Rs.10 crores consistingof 20,000 shares of Rs. 5,000 each. In March2003 it was Rs. 1068 crores.

2.Bonds & Debentures : The bonds anddebentures stood at figure of Rs. 57.69 croresin 1971 and rose to Rs. 15366.5 crores as onMarch 31,2003.

3. Borrowings : Borrowings from IDBI and Govt.of

India were Rs. 975.6 crore and total assetsRs.22866 crore on March 31,2003

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1. Limited companies incorporated in India, in private,public or joint sector

2. Co-operative societies registered in India, engagedin the activities related to:i) Manufacture, preservation

ii) Shippingiii) Mining

iv) Hotel Industryv) Generation of Electricity

vi) Transport of Passengers or goodsvii) Maintenance, repair of machinery or vehiclesviii) Assembling, repairing or packing of articles

ix) Fishingx) Providing special or technical knowledge

xi) Research and Development

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IFCI provides direct financial assistancefor the following causes:

Setting up of new industrial projects

Expansion of existing units or fordiversification in to new lines of activity

For renovation and modernisation ofexisting units.

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Granting loans and advances to or

subscribing to debentures of industrial

concerns repayable within 25 years . Underwriting the issue of industrial

securities i.e. shares, stock, bonds to bedisposed off within 7 years.

Subscribing directly to the shares and

debentures of public limited companies.

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Guaranteeing of deferred payments for

the purchase of capital goods fromabroad or within.

Guaranteeing of loans raised by

industrial concerns from scheduled

banks or state co-operative banks.

Acting as an agent of world bank or

central Govt in respect of loans

sanctioned by industrial concerns.

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i. Development of Backward Areasii. Promotional Schemesiii. Subsidy for Adopting Indigenous

Technologyiv. Meeting Cost of Market Studiesv. Meeting Cost of Feasibility Studiesvi. Promoting Small Scale and Ancillary

Industries.vii. Revival of Sick Unitsviii. Self-development and Self-employment

Scheme

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1. Financial Assistance :

1970-71 : Rs. 32.3 crores

1995-96 : Rs. 6579.7 crores

2001-02 : Rs. 778.0 crores

2002-03 : Rs. 2035.1 crores (161.6% Increase)

Upto Mar 03 :-Total Assistance Sanctioned : 45426.7 crores

Total disbursements : 44169.2 crores

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2. Product-Wise Assistance :

1. Direct FinanceA. Project Finance

i) Loans : Rupee Loans, Foreign Currencyii) Underwriting : Shares, Debenturesiii) Deferred payment guarantees

B. Non-Project Financei) Equipment Financeii) Corporate Loansiii) Working Capital/short-term loansiv) Equipment leasing

2. Direct Discounting3. Loans to and investments inshares/bonds of FIs

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The Industrial Finance Corporation of Indiahad made a wide range of contributions invarious sectors in Indian industry. Some of the

noteworthy contributions of IFCI includeimprovement of Indian industry, exportpromotion, import permutation, developmentin business, pollution control measures,energy preservation, and rendering direct

and indirect employment. There are anumber of industrial sectors that have beenmassively benefited from The IndustrialFinance Corporation of India Limited. Theyare as follows:

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Capital & intermediate goods industry thatincludes products such as electronics,

synthetic plastics, synthetic fibers, andmiscellaneous chemicals

Service industries that include hotels andhospitals

Consumer goods industry such as textiles,paper, and sugar

Infrastructure sector which involves power

generation and telecom services Basic industries involving products such as

cement, iron & steel, fertilizers, basicchemicals

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The economic contributions of The IndustrialFinance Corporation of India Limited has beenquite large-scale since its establishment. IFCI has

sanctioned funds of an amount of Rs. 462 billionto 5707 companies and has paid out Rs. 444billion in totality. The business entrepreneurs havegot immense help from IFCI as well when theystarted off with any new business or even on theirway to expand the already existing business. IFCI

has been a great helping hand to the entireindustrial sector in India and most importantly itwas the only support at the time of scarcity.

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