Impact of Financial Engineering on Cluster Development Based on Case Study of Belgaum Foundry Cluster, Karnataka State of India Empirical Research Findings

Abstract:     
The guiding principle of UNIDO’s approach towards small and medium enterprises (SMEs) is that these enterprises can play a key role in triggering and sustaining economic growth and equitable development in developing countries. However, inadequate efforts/responses, reliance on traditional practices and age-old methods, particularly in small, medium, and tiny sector have become the major hurdle for development. The Government of India has introduced a financial support to different clusters in the tenth Five Year Plan to initiate development through participation with beneficiaries/stakeholders.

The foundry industry is one of the pioneering industrial sectors developed in the country. There are over 6500 foundries in the small, medium and large-scale sectors in India widely spread over the country. There are about 375 foundries located in the State of Karnataka, out of which about 150 are located in Belgaum. As a result, the Department of Industrial Policy and Promotion, Government of India has extended a grant-in-aid of Rs. 18.58 crores (under IIUS) and Government of Karnataka Rs. 2.48 crores for establishment of common facilities and infrastructure facilities in the cluster along with private participation. Belgaum foundry cluster in a span of five years is able to achieve a marked progress of 15 per cent, 10 per cent,60 per cent and 15 per cent in production; employment generation; exports; and revenue generation respectively. It has emerged as one among the top 10 producers of castings in India (one crore = 10 million).

Keywords: economic development, economic growth, economic growth and aggregate productivity

JEL Classification: C81, L71, N65, O17

Accepted Paper Series