Addressing the executive committee meeting of the Federation of IndianChambers of Commerce & Industry here, Gupta said IDBI continued to fundindustrial development although there was a major shift in funding fromtraditional steel, cement, textiles and engineering sectors to mainly theinfrastructure (power) sector. Gupta said 38 per cent of the assistancesanctioned by all-India financial institutions in 1998-99 was meant forinfrastructure (mainly power projects). In the April-November 1999 period,the share of infrastructure in total sanctions had gone up to 38 per cent.

Reacting to FICCI chairman GP Goenka's query on whether the preponderance ofshort-term loans would dilute the developmental role of financialinstitutions, Gupta said IDBI was fast moving towards universal banking butlong-term finance would still be its predominant role. He said signals of a"significant" recovery were visible in the growth of industrial productionand exports. Gupta said the seven per cent plus growth in the index forindustrial production in 1999-2000 would be led by the manufacturing sectorand GDP growth would improve to about 6.5 per cent from 5.9 per cent in1998-99.

Looked at from another angle, sanctions and disbursements by financialinstitutions had also shown a healthy increase. During April-November 1999,sanctions of all-India financial institutions had touched Rs 61,120 croreagainst Rs 54,000 crore in the corresponding period last year, whiledisbursements increased to Rs 35,000 crore from Rs 31,000 crore. Rejectingthe views of some industrialists that IDBI was inflexible in its grouplending policy and also took an inordinately long time in disbursingsanctioned funds, Gupta said IDBI was very flexible and believed insupporting genuine borrowers.