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The Swadeshi Trump This scant respect for Law The balancing act Remembering Indira Sivasailam... Land reclamation from sea appears cheaper! A rich pool of talent not utilised…. Welcome thrust on trade in Modi’s foreign visits... Build close rapport with business leaders A C Muthiah – his munificent bequeaths to science Pharma – overdose of copying An inexplicable neglect Fortune 500 review Bihar elections - the Rajaji formula worked An informal presentation - analytical, forward locking... IPL - no surprise this scam Mu Sigma – is no more Boy, can you beat these? All eyes on Sankara Nethralaya Delhi is distant… Paytm karo... The few handicaps... Moily’s bold thrust Solar thermal shines… A glass full of corruption The ‘Jayanthi Tax.’ A think tank for Chennai When small is no larger beautiful.. Welcome changes that testify to Jayalalithaa’s return to health The Ports’ Pasha expands into Tamil Nadu Auto components surge… Polls and promises Demise of a media baron... The power-full Hindujas Diamond jubilee of Egmore Samskrt School TGS- The king storyteller How Air-India loses customs... Airlines in India: cost and space Rs.1600 crore paper board plant of TNPL When online building permits work…. Shaming of Tamils by Tamil farmers at Delhi The rise and rise of KCP Odisha: spectacular win by Naveen Patnaik London, London Narayan B H Kothari - a tribute A professional at the helm of IRDA... Like Hinduism: many paths to reach God... No Maha Koottani in TN... Adharma of opposition politics …and of a popular trade leader There was flood of milk. Reason: no milk commissioner! Editor's Notes CII projects higher growth… Air Asia India will set new benchmarks for budget travel Things happen by accident and not by design... Return to king coal for urea... The Gulf aviation boom Tribute – UCAL Selvan… China invests in India He saved millions from starvation... Tatas moving out of urea production... Where a state respects its litterateurs… Make standards certification mandatory... Which side are you, Montek? Medical costs hit the roof... Secularism and anti-Hinduism Colour-Chem’s colourful KRVS No engine for this car Cement prices continue to rise… Adapt Vajpayee dinner diplomacy Shipping woes of Chennai companies Should we change the official year? Shanti and Sadhana through Music Dr C Rangarajan returns to Chennai Multi-faceted Venkat Recognition to role of NBFCs.... Lalu’s envy, India’s pride Preserving for the future Muffled voices for merit… Gas is the way forward Wise Presidents Why land prices zoom in TN? Poor quality of university VCs Align crops to agro climate endowments… Naidu’s return augurs well for Seemandhra CRS, a jewel among managers, is no more. West Bengal: mindless malignancy When TN politicians can emulate Kerala's Fall in crude prices help in oil sector reform IPL type auction for VCs? Funding the un-funded Delhi is distant A Grand Finale for SN’s MS centenary at the US… More heat than light Protest masters... PPP mode for upgrading Corporation Hospitals R Sridhar steps down as CEO of Shriram Capital Silver Years of Madras Musings Discoms deserve better… Cleaning Ganga – relocate tanneries and install electric crematoria The sea- saw battle continues... Breaththrough in malaria control TN – agglomerate land holdings without alienating ownership A welcome initiative by the judiciary Focus on quality of power - its only around 170-180V Valli, they are more marginalised Permanent secretariat for TN GIM SoA @ 80 Quality silica from Neyveli Cutting the nose to spite the face Not just in-laws (and outlaws); they’ve renowned academics at the helm! An enemy’s enemy is a friend Vibrant Gujarat He continues the focus on social amelioration Lesson from Chandrababu Naidu Excel Generators provide the vital back-up The Jan Dhan bonanza TIAM turns a full cycle The nuclear option Infrastructure funding – lessons learnt Welcome GST Why this malaise in medical education? Revive development banks... Road development slows down Tough task taking states together TN-leverage strength of BHEL, NLC... More Shakthi to Das’ elbow Fuel for thought Delhi Chalo... A yen for wastage… TN accounts for the largest recruits by the IT sector Modi storms Silicon Valley Fortune for Indian Airlines Banning booze... Sweet news for TN sugar mills Scientists urged to take up farmer-oriented research When Ratan Tata visited SRM MHC should not return to its old indisciplined ways No mega rail project for Tamil Nadu Liberal imports idling indigenous capacities PC’s preference for professionals Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Naidu will soon build a new Hyderabad Padma Bhushan for A Ramakrishna Come elections, come advertisements... When nations steal growth from one another… Wanted: a second airport for Chennai Sri Lanka votes for change Whistle-Stop Tour of Raghuram Rajan For whom the bell tolls? The brown list of Venkitaramanan Haul over the coal Kulandai was a giant Intellectual of rare qualities Roaring Ro-Ro facility Tribute – Manikam Ramaswami Making ‘my Amaravati’... Editor's Says Inflation: are we emulating Argentina and Brazil? More Shakti to resource mobilisation... GM Technology at last! Contrarian cousins Sweeter prospects for sugar Tribute Building loyalty through the stomach Bihar – Nitish Kumar adopts the Lalu model WTO Meet: resolved to meet again Convulsions in The Hindu Streamlining mandatory third party cover Five star activism stalls development activity L&T- the specialty of special purpose vehicles For whom the MIDS bell tolls? Strengthen the base... A friendly business group A proud Madrasi CSR and CMI: promise of another Srinivasan Ramanujan... S Ramanathan – a versatile musician, musicologist Put expensive assets created to use... Music happens EVM is tamper-proof Solar, solar everywhere … CIPET hqrs to stay at Guindy – for the present? Tribute – M V Murugappan The rise and fall of Annamalai University A more liberated TN… A Grand Finale for SN’s MS centenary at the US… Tatas moving out of urea production... Plummeting profits of PSBs Rahman at CIC Tihar, Puzhal not different from Parappana Agrahara EEC at the National Media Centre Insurance companies bleeding, yet no decision on increasing FDI limit! Nuclear power at the nucleus Measuring roof tops in terms of KW/MW Engineering seats go abegging Alexa – Talking Wikipedia TELANGANA at last…BUT Robber barons everywhere Tax agriculture Small units prefers to remain small... Noble nonagenarians... ONGC at KG Basin Revving up the manufacturing sector Kudos to NDTV... Eternal support for capitalisation of PS banks Gay abandon in pricing Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai Shale gas and its shallow future Russi Mody – a tribute Another Indian music maestro at the UN The star of Spencers is no more Welcome focus on core competence Where is Rajaji? Marketing expert Balagopal is no more Godspeed, Chief Minister JJ Increasing non co-operation of state leaders The ‘Ayyo-yes’ is no more IAS invades NDDB... Maximising the micro pricing … The why of tax incentives Readers' Mail Online not in line with brick and mortar businesses... F C Kohli - his concerns all embracing Delhi returns to BJP Quality education through the PPP mode New IT products of Ramco in the pipeline… Poor representation for Kerala and TN in Cabinet Reliance’s TV – 18 ready to launch Tamil News Channel S V Raju – a ‘good’ true liberal Mersal magnified More tributes to GR Waning interest in public discussions… GNS - 100: our first subscriber Don’t seem to feel the pulse… Computation of GDP – conundrums continue Of course, Gujarat is vibrant L&T: focus on infrastructure and more infrastructure… Limit foreign borrowings to hi-tech, export potential projects... to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Modi and the lady When the President was rendered homeless… Telangana in top gear… Towards speedy justice Kinetic Karnataka Parliament in paralysis...
 
Revive development banks...

The first three decades of industrial development were marked by provision of finance on facile terms. Specialised development banks like ICICI, IDBI, IFCI and state financial institutions lent capital and term loans on attractive terms. The Madras Industrial Investment Corporation (that later became TIIC), set up in 1949, pioneered such industrial development finance both for equity and loans. These institutions have been extremely effective in attracting hordes of new class of entrepreneurs with modest resources of their own. I cite the instance of the evolution of the Padi complex where the famous house of TVS embarked on manufacturing. In 1962, the first of such units, Wheels India Ltd, was inaugurated. This was quickly followed by Sundaram Clayton, Brakes India, Lucas TVS... The funding was simple: for Wheels India, the total initial cost was Rs 200 lakh; around Rs 25 lakh each was contributed as equity by TVS and the collaborator Dunlop of UK. The balance was sourced as a term loan from a development bank.

    Similar was the funding for the other units at Padi that commenced production in quick succession. Dozens of units of Amalgamations, the Rane Group and several companies in the sectors of automobile, textiles, cement and sugar were set up with modest capital outlays with a portion contributed by the promoters and the balance funded through equity/term loans from development banks and SFCs. Until George Fernandes as Industry Minister in the Janata government  mandated public participation for a portion of equity capital, there wasn’t the need felt by promoters to go to the public for capital. In fact, the modest capital base of most southern companies didn't really need public funding. The promoters, for most part, were reluctant to go public.

Development banks, thus did a yeomen service in nurturing entrepreneurship. Hundreds of companies owe their existence to the funding extended by such banks. The latter developed a great deal of expertise in raising resources and in lending these over the medium and long terms. Of course, not all the portfolios ended profitable and there were bad debts and non-performing assets. But on the balance, these did yeomen service for industrial development.

In the 1990s with the opening up of the economy these institutions underwent a massive change. There arose vastly expanded scope for raising deposits from the public. This resulted in the development banks opting to become commercial banks. In the enthusiasm and attraction to grow as large commercial banks, these have lost their earlier thrust for development financing. There is also the mismatch between raising deposits over short term and lending for infrastructure and industry over long term. The resulting huge ballooning of non-performing assets is a cause for serious concern. (see article by S A Raghu page 36)

I feel there is need to return to the old days: of setting up development banks for industry. Specialised infrastructure development financing agencies on the one hand and the MUDRA Bank on the other are welcome initiatives. There is need for such specialised institutions to lend for equity and term loans escpecially for hundreds of mid-sized enterprises on modest  interest rates.


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