Economic Challenger - - NEWS -

(I) Timely Sup­ply of Raw-ma­te­rial

The govern­ment should take a prag­matic and imag­i­na­tive view of the whole sit­u­a­tion to restore health to sick units. The lib­eral timely sup­ply of raw-ma­te­rial is to be en­sured so that they get loans of medium and short term from the fi­nan­cial in­sti­tu­tions in­clud­ing banks which should adopt a sim­pli­fied loan ap­pli­ca­tion method and pro­ce­dure. (ii) In­crease Ef­fi­cient and Pro­fes­sional Man­age­ment

The govern­ment agen­cies should con­sider the pos­si­bil­ity of de­vis­ing a com­mon mar­ket­ing strat­egy and pro­mote a com­mon or­ga­ni­za­tion for mar­ket­ing their prod­ucts. Trade cen­ters are to be opened in some se­lected cen­ters. The to­tal of sick units is a sig­nif­i­cant num­ber of units be­com­ing sick on ac­count of in­ef­fi­cient and non-pro­fes­sional man­age­ment, it is there­fore nec­es­sary to give train­ing to man­agers and make them un­der­stand the lat­est man­age­ment prac­tices.


At the Dis­trict level it is ob­served that Board for In­dus­trial & Fi­nan­cial Re­con­struc­tion (BIFR) has been able to dis­pose of about 58% of cases ef­fec­tively reg­is­tered with it. 42% of such cases are still un­der con­sid­er­a­tion. In the 37 cases in­volv­ing bank credit of Rs. 167.76 crores, 7 pub­lic sec­tor cases ac­count for Rs. 88.57 crores, 5 cases from the joint sec­tor in­volve a sum of Rs. 8.77 crores while 25 cases are from the pri­vate sec­tor in which the Bank's ex­po­sure is to the tune of Rs. 72.42 crores.

An ac­cess to BIFR should be vol­un­tary and not manda­tory. Sick­ness may be changed so as to take cog­nizance of de­fault oc­cur­ring up to and more than 180 days in term loan/work­ing cap­i­tal ac­counts of the com­pany. There should be at least 5 fast track wind­ing up Tri­bunals so as to re­duce delays in wind­ing up cases.


There is a high in­ci­dence of sick­ness in ur­ban in­dus­trial ar­eas as com­pared to their counter parts in the ru­ral ar­eas. There is no clear cut pat­tern of in­dus­trial sick­ness emerg­ing with

re­gard to pro­por­tion of sick units to to­tal reg­is­tered units. The in­dus­try­wise anal­y­sis of date shows that the high­est in­ci­dence of sick­ness has oc­curred in me­tal­lur­gi­cal in­dus­try group whereas the chem­i­cal and stone-crush­ing in­dus­try group ac­counted for the low­est. The govern­ment’s size wise anal­y­sis of the sick units has pointed out that the higher in­ci­dence of sick­ness is present in the lower cap­i­tal size groups; whereas the low in­ci­dence of sick­ness is in the higher cap­i­tal size group.

Any In­dus­try to be suc­cess­ful should be headed by a group of highly com­pe­tent mangers. Af­ter this the next step is that the man­agers should be on a con­stant look-out for any warn­ing signals of in­dus­trial sick­ness, and even if any one symp­tom is de­tected then a counter ac­tion should be taken im­me­di­ately. No time should be wasted, be­cause once this sick­ness deep­ens in the in­dus­try, it acts like a for­est fire, grip­ping the whole in­dus­try. At the same time in­dus­tries should sub­mit their progress re­port along with their true fi­nan­cial con­di­tions to the dis­trict au­thor­i­ties. If the sick­ness is in the pre­lim­i­nary stages then the govern­ment should grant loans to th­ese units un­der the soft loan scheme at con­ces­sional rate of in­ter­est, and should ap­point a per­son to keep a check on the par­tic­u­lar unit.


1. Khanka, S.S.: In­dus­trial sick­ness in In­dia 2. Reddy, T.S. & Reddy, L.V. : Sick­ness in Small and medium in­dus­try 3. South­ern Econ­o­mist. 4. Eco­nomic Sur­vey, Govern­ment of In­dia, min­istry of fi­nance, Eco­nomic De­vi­sion, New Delhi, Pp. 166 5. Panda, N.M.: Sick­ness in­S­mall and Medium Scale En­ter­prises, National Prob­lems the In­dian jour­nal of com­merce. P. 15. 6. Ram mo­han, R.: Strate­gies f or Re­ha­bil­i­ta­tion of Sick units, state bank of in­dia monthly re­view Pp. 302. 7. Su­gan C. Ra­makant “Iden­ti­fi­ca­tion and re­ha­bil­i­ta­tion of in­dus­trial sick­ness”. Pointer pub­lish­ers Jaipur -003. Pp 247.

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