Finance for Industry

M P Chitale Financial institutions are apparently anxious about the increasing reliance of private sector indu- stry on borrowings from institutions rather them on equity or risk capital and borrowing from the market. 1 This excessive reliance on borrowed funds is said to result from the concessional rate of interest charged on loans by financial institutions. That the interest payments are allowed under the Income-Toy Act to be deducted in computing taxable profit while payment of dividend on risk capital is not so deductable no doubt influences industry.