STATE FINANCIAL CORPORATIONS ACT, 1951

The introduction of the State Financial Corporations Act potentially changed the scenario of business and entrepreneurship in India. The present assignment is going to discuss the role and interventions of the corporation act in terms of forging successful business in the different states in India. Further, the study is going to carry forward the discussion on the State Financial Corporations and their constant operations on business grounds. Additionally, the discussion is also going to outline the key features of the State Financial Corporations in real-time along with its issues and objectives in making business operations seamless and supportive within India. 

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Overview of the State Financial Corporations 

The State Financial Corporation was founded based on the objective of supporting the small to medium institutions in India in terms of doing business. It has further played a vital role in the banking industry by outlining the features of loans, debts and equity acquisition and subscription policies to businesses that are searching for further exposure to the market. Most importantly, the State Financial Corporations provide long-term financial assistance to the businesses by providing the small to medium corporations with monetary support. Additionally, the corporation acts as a government agent to the small to medium businesses of the country that eventually enables them to improve business processes in the future. 

Discussion on the State Financial Corporations Act 1951 

The State Financial Corporation Act was published in 1951 in order to support the entrepreneurial activities of small to medium enterprises in India. The act involves significant members of the board of financial corporations of different states in India. It allows the acts to gain further exposure to different styles of businesses that have a state-specific approach. The act also concerns the activities and business ventures of different industries from different states. Additionally, the act initially supported the preservation and manufacturing of goods and services that are necessary for small and medium businesses to enter the market with competitive advantages.  

How many State Financial Corporations are there in India? 

There are different types of State Financial Corporations in India based on the state-specific approach in the market. Based on the state-specific approach, the list of states involved in financial corporation activities is listed below. 

• Rajasthan 
• West Bengal
• Haryana
• Punjab
• Odisha
• Madhya Pradesh 
• Tamil Nadu 
• Goa
• Kerala 
• Uttar Pradesh 

Apart from that, there are other state-specific financial corporations along with different other corporations like North Eastern Development Finance Corporation that are active in the field of business financing in India 

Features of State Financial Corporations 

The State Financial Corporations intervene in businesses in a supportive manner in order to support the small and medium businesses in their respective states. In this scenario, it offers features like guaranteed loans from government banks that can support the entrepreneurs to start their business at an initial stage. Further, the corporation acts as an agent between the government and the business corporations in order to support businesses successfully. 

What are the key issues State Financial Corporations are facing? 

The State Financial Corporation is extremely supportive of small and medium businesses throughout their tenure in the market. Despite this much level of flexibility, there are significant financial issues within the corporation that cause internal harm to the financial corporations to some extent. Here, the first issue resides in regulatory compliance and increasing competition in the national market. Further, there are significant challenges with customer retention due to the increasing expectations of customers from the corporations in the market. Apart from that, issues like security breaches, changing scenarios of business models and cultural shifting issues are also potential challenges for the corporation while operating in the Indian market. 

Objectives of State Financial Corporations 

The State Financial Corporation operates in the Indian market based on the key objective of supporting entrepreneurial business activities and small to medium enterprises. Further, the corporation aims to provide long-term financial assistance to businesses on both a small and a large scale in order to penetrate competitive markets within India. The corporation mostly aims to support state-specific businesses based on their territorial operational grounds. 

Conclusion 

The State Financial Corporations play an extensive role in supporting small to medium businesses within the domestic market of India. The operations of the corporations are mostly state-specific, which allows them to enter the market with an utmost competitive advantage. Conclusively, it can be said that with proper financial assistance and customer retention, the corporations can successfully attain a beneficial state while operating in the local and domestic markets within the Indian business industries. Despite the challenges of changing business models and growing customer expectations, corporations can manage expectations by involving proper customer services based on market demand.