Role of state financial corporations: An analysis of various committee reports

The current study has been undertaken to analyse the role played by State level Development Financial Institutions (SLDFIs), that is, State Financial corporations(SFCs) in the development of the Indian Economy. State level financial institutions (SLFIs) like SFCs and Small Industries development corporation (SIDCs) were conceived on the idea of Regional Development Banks, for balanced regional growth and development of the State through development of SSIs, MSIs and SSBEs. With the onset of economic reforms these SFCs faced a setback in the changed economic conditions. Several Committees and working groups were constituted by the Govt. of India/RBI made recommendations about the role of SFCs in the changed environment. An assessment about the observations and recommendations made by these committees/working groups has been presented in this paper along with personal inferences on the points which were found to be contradictory to each other. The main aim is to understand the impact of these committee reports on the existence of SFCs in their respective states, and also to derive a conclusion on the relevance of recommendations made by the committees on the functioning of these SLDFIs.