Introduction :- At the time of independence in 1947, India's capital market was relatively under-developed. Although there was significant demand for new capital, there was a dearth of providers. Merchant bankers and underwriting firms were almost non-existent and commercial banks were not equipped to provide long-term industrial finance in any significant manner.

It is against this backdrop that the government established The Industrial Finance Corporation of India (IFCI) on July 1, 1948, as the first Development Financial Institution in the country to cater to the long-term finance needs of the industrial sector. The newly-established DFI was provided access to low-cost funds through the central bank's Statutory Liquidity Ratio or SLR which in turn enabled it to provide loans and advances to corporate borrowers at concessional rates.

The main focus of The Industrial Finance Corporation was to provide long-term financial benefits to various sectors in Indian industry and it has fulfilled it quite efficiently. IFCI has also been quite subservient in implementing the number of things that the Government of India planned up to ensure financial benefits into services. IFCI carried out all the responsibilities regarding Government's industrial policy initiatives till the establishment of ICICI in 1956 and IDBI in 1964.

Contribution:- Until the establishment of ICICI in 1956 and IDBI in 1964, IFCI remained solely responsible for implementation of the government’s industrial policy initiatives. It made a significant contribution to the modernization of Indian industry, export promotion, import substitution, pollution control, energy conservation and generation through commercially viable and market- friendly initiatives. Some sectors that have directly benefited from IFCI include:-