GUWAHATI, June 29 � Since its inception, the North Eastern Development Finance Corporation Limited (NEDFi) has been playing a key role in entrepreneurship development in the region, but under the present circumstances, the Central Government can play a major role in the growth of the organization by increasing its corpus fund with a one-time grant, said the Chairman and Managing Director of the NEDFi, KN Hazarika.
Talking to The Assam Tribune today, Hazarika said that with the investment scenario in the region improving considerably and because of the incentives offered in the North East Industrial and Investment Promotion Policy of 2007, there is an urgent need for increasing the corpus capital of the NEDFi and in this regard the Centre can play a major role by providing a one-time grant. He revealed that the NEDFi has already approached the Department for Development of the North Eastern Region (DoNER) and the Planning Commission in this regard.
A study carried out by the Indian Institute of Bank Management has shown that the demand for micro credit in the region is around Rs 2600 crore. In the period from April, 2007 to March, 2009, expression of interest and industrial entrepreneurs� memoranda indicated proposed investment in the region to the tune of Rs 16,798 crore. Even if 20 per cent of the requirement of proposed investment is to be tapped, the NEDFi�s fund requirement in the next five years would be around Rs 2,000 crore and the Centre can help the organization grow to the desired extent by providing a one-time grant of at least Rs 2,000 crore, said Hazarika.
The NEDFi CMD said that the second option for the organization to increase its corpus is to float shares for the public. But for doing that, the organization would have to receive clearance from the Government and the Reserve Bank of India. He said that the capacity of the NEDFi to handle such investments would also have to be increased considerably and a separate department with persons having experience in handling public investments would have to be created. The NPA level would also have to be reduced further.
Giving an account of the performance of the NEDFi, Hazarika revealed that the performance of the organization improved considerably in the last five years and the NPA level has been brought down from around 16 per cent to 3.73 percent. He said that in the last financial year, the NEDFi sanctioned loans amounting to around Rs 300 crore and the net profit after payment of taxes was around Rs 33.25 crore. The NEDFi also managed to pay a dividend of Rs 3 crore to the shareholders, he added.
Over the years, the NEDFi also conducted more than 60 studies, which benefited the region in different ways. For example, the NEDFi study on limestone deposits in Assam and Meghalaya led to a boost in cement industries, said Hazarika.
The NEDFi CMD further said that the NE is poised for major growth in the next few years with the improvement in law-and-order situation and the incentives given under the NEIIPP, which generated lots of interest among investors in the sectors like cement, power, steel, roads, tea, health care, higher and technical education, tourism, etc., while rapid urbanization resulted in large scale investments in real estate. The future is bright for the NEDFi if judicious policies are adopted in lending and the Centre comes forward to increase the corpus capital, Hazarika added.
