State Fiscal Corporations (Sfcs) : Functions Together With Critical Review

In social club to encounter the fiscal needs of pocket-sized in addition to medium scale industrial units which are non governed yesteryear Industrial Finance Corporation, the Government of Republic of Republic of India passed State Finance Corporation Act inwards 1951, empowering the State Governments to initiative of all fiscal corporations. The First State Financial Corporation was laid upward inwards Punjab inwards the twelvemonth 1953. At acquaint at that spot are eighteen SFCs operating inwards the country.

Functions of SFCs

Following are the diverse functions of SFSs
  1. Financial Assistance to Small Units : The primary component subdivision of State Finance Corporations is to render long term finance to pocket-sized in addition to medium scale Industrial concerns formed every bit populace or someone express companies, corporations, forms or proprietary concerns repayable amongst inwards a menstruum of xx years.
  2. Guaranteeing Loans : The SFCs guarantee loans raised yesteryear industrial concerns from commercial banks in addition to cooperative banks repayable inside a menstruum of xx years.
  3. Subscription in addition to Underwriting : The State Finance Corporations subscribes to the debentures issued yesteryear the industrial concerns repayable inside xx years in addition to every bit good underwrites the effect of stock, shares, bonds in addition to debentures of industrial concerns.
  4. Guarantee for deferred Payments : They guarantees the deferred payments for the buy of plant, mechanism etc inside the country.
  5. Acting every bit Agent of Central in addition to State Governments : They human activeness every bit an agent of the key or province governments or to a greater extent than or less industrial financing institutions for sanctioning in addition to disbursing loans to pocket-sized industries. 
  6. Capital : The portion uppercase of the SFCs is fixed yesteryear the concerned province authorities discipline to the minimum of Rs. 50 lakhs in addition to maximum of Rs. five crore. The shares are subscribed yesteryear the State Government, RBI, Commercial Banks, Co-operative banks, other fiscal institutions in addition to the public.

List of SFCs inwards India

  1. Andhra Pradesh State Financial Corporation
  2. Assam Financial Corporation 
  3. Bihar State Financial Corporation
  4. Delhi Financial Corporation
  5. Haryana Financial Corporation
  6. Gujarat State Financial Services Ltd.
  7. Hirnachal Pradesh Financial Corporation
  8. Jammu & Kashmir State Financial Corporation
  9. Jammu & Kashmir State Financial Corporation
  10. Kerala Financial Corporation
  11. Madhya Pradesh Financial
  12. Maharashtra State Financial
  13. Orissa State Financial
  14. Punjab Financial Corporation
  15. Rajasthan Financial Corporation
  16. Tamil Nadu Industrial
  17. Uttar Pradesh Financial Corporation
  18. West Bengal Financial Corporation

Critical Review

The functioning of State Finance Corporations has been criticized mainly because of the next drawbacks.
  1. Concentration solely on Granting Loans : Concentration solely on sanctioning of loans in addition to advances fifty-fifty though they tin subscribe to the debentures in addition to underwrite shares in addition to debentures issued yesteryear the units. Therefor,e at that spot is a ask for reorientation of the lending policy.
  2. Failed to Achieve Regional Balanced Growth : State Finance Corporations pick out failed to convey well-nigh a regional balanced industrial growth. It is observed that at that spot has been uneven evolution of industries amongst State Finance Corporations assistance inwards unlike states in addition to regions.
  3. Bias inwards Favor of Large Unites : State Finance Corporations shown a bias inwards favor of financing large scale units rather than to pocket-sized scale units. 
  4. Higher Rate of Interest : High charge per unit of measurement of involvement in addition to difficult damage in addition to weather for assistance is to a greater extent than or less other criticism against the operations of SFCs.
  5. Problem of Overdues : Most of the SFCs are facing the serious work of continuous increasing magnitude of overdues due to delay inwards implementation of projects.
  6. Lack of Technical Staff : Lack of adequate specialized technical in addition to trained staff for efficient working.
  7. Lack of Self Sufficient Organizational setup : The SFCs lack self-sufficient organizational laid upward along amongst adequate specialized in addition to trained staff ensuring their efficient functioning.
  8. Limited Resources : The fiscal resources of the SFCs are express in addition to inadequate. They are facing work of attracting to a greater extent than funds. 
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