SUGGESTIONS FOR REHABILITATION OF SICK UNITS
(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.
FINDINGS OF THE STUDY
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.
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