Role of IFCI in Foreign Investment

Abstract:

IFCI plays a pivotal role in the Foreign Investments. The Industrial Finance Corporation of India (IFCI) was set up as the first development institution on July 1, 1948 in India to meet the long-term financial needs of the industrial units in the country.

An Overview of Industrial Finance Corporation of India (IFCI)-

IFCI was entrusted with access to low-cost funds through the central bank's Statutory Liquidity Ratio or SLR which on the other hand enabled the bank to provide long-term financial assistance to the industrial units in India.

Sectors in which IFCI has played a major role in Foreign Investment

IFCI has played a major role in foreign investments in the following sectors or industrial units in India:

• Service industries (hotels, hospitals)
• Infrastructure
• Consumer goods industry
• Capital & intermediate goods industries (electronics, synthetic fibers, synthetic plastics, miscellaneous chemicals)
• Basic industries

Role of IFCI in Foreign Investment-

IFCI is the first most Development Financial Institution which was being set up by the Government of India on July 1, 1948. The main objective of IFCI was to provide long-term financial assistance to the industrial units in India to boost the economic development of the country. The central bank's Statutory Liquidity Ratio or SLR provided an access to low-cost funds to IFCI in order to provide long-term funds to the corporate borrowers at discount rates.

IFCI has provided long-term financial assistance to almost all the industrial units of the Indian market. It has also played a significant role in transforming the Government's aspirations into reality. Before ICICI and IDBI came into existence in the years 1956 and 1964, IFCI carried out the entire responsibilities tagged with government's industrial policy initiatives all alone.

Effects of the role of IFCI in Foreign Investments

• Advancement of the industrial units in India
• Export Promotion
• Import Substitution
• Development of Entrepreneurship
• Conservation of Energy
• Generation of Direct and Indirect Employment Opportunities.

Last Updated on 3/17/2011