State Financial Corporations

STATE FINANCIAL CORPORATIONS INTRODUCTION The State Finance Corporations (SFCs) are the integral part of institutional finance structure in the country. SEC promotes small and medium industries of the states. Besides, SFCs are helpful in ensuring balanced regional development, higher investment, more employment generation and broad ownership of industries. At present there are 18 state finance corporations (out of which 17 SFCs were established under SFC Act 1951). Tamil Nadu Industrial Investment Corporation Ltd. established under Company Act, 1949, is also working as state finance corporation. Under the provision of the State Financial Corporation Act, 1952, the SFCs are set up in the different states for providing term finance to medium and small scale industries. The SFCs have functions similar to those of the IFCI. They are empowered to provide financial assistance in the form of loans and advances, subscription to shares and debentures, underwriting of new issues, and guarantee of loans. But, in practice, they have concentrated mostly on loans and advances only. There is, therefore, a need for reorientation of their loans policy. AIMS AND OBJECTIVES 1. To do a detailed study about the State Finance Corporations management and organization. 2. To find out the various functions and the importance of State Finance Corporations. RESEARCH METHODOLOGY The researcher has used only doctrinal method of research. HYPOTHESIS SFCs are helpful in ensuring balanced regional development, higher investment, more employment generation and broad ownership of industries. REVIEW OF LITERATURE 

Dangwal, R. C., Contribution of the Uttar Pradesh Financial Corporation in the Field of UP'S industrial Development

R C. Dangwal (1992) examines the role of the UPSFC in the industrial development of the State. The study finds out that the major portion of the assistance of the Corporation was

given to a few developed areas. However, a trend showing priority for the backward areas is seen during the period under study. The study also points out the difficulties of the borrowers in getting financial assistance from the Corporation. He calls for pooling the efforts of all institutional agencies, whether financial or not, which in turn will help the balanced development of different areas of the State. 

Omprakash, K., Performance of State Financial Corporation : A Study of APSFC K.Omprakash (1990) emphasises the necessity of having a sound capital strength for the SFCs. In his opinion, the equity base of the Corporations is not strong enough to face the challenges ahead. The lion's share in the capital of the SFCs is the refinance from the IDBI. The SFCs can achieve diversification of their schemes of financial assistance only if they have a sound equity base. Almost all the SFCs have failed in this respect. The small-scale sector has not obtained the deserving assistance from the Corporations.

CHAPTERISATION 1. ORGANISATION AND MANAGEMENT OF SFC’S: 2. FUNCTIONS OF STATE FINANCE CORPORATIONS 3. WORKING OF SFCS: 4. CRITICAL REVIEW OF SFC’S CONCLUSION AND SUGESSTIONS BIBLIOGRAPHY

SUBMITTED BYNandini Suman Roll no.756