The Sick Industrial Companies Special Provisions Bill, 1997, passed by Lok Sabha, introduced encouraging changes. A sick unit may not work to its full capacity, may not earn reasonable profit, may not pay fair wages and dividends and may face financial, marketing and other problems in a continuous manner. A scheme for provisions of margin money to sick units in the small-scale sector at soft terms to enable them to obtain necessary funds from banks and financial institutions to implement their revival scheme has been introduced from January 1, 1982. If home remedies of chicken soup, tea, Tylenol, etc don't work, then see a doctor. This happens when the prices of inputs such as price of fuel such as petroleum during energy crisis goes up whereas the competitive forces keep down the prices of the products. Any one or more of the following factors are responsible for such inherent sickness in industrial units or for born in sickness among industrial units. Minimizing input costs and adopting economy of scale, adequate provision for financial requirements, exploring new market for its product.
Poor maintenance of plant and machinery, constant technical problems with maintenance of production volume, quality, time schedule and cost limits may ultimately spell doom for the firm. Disclaimer: We are not affiliated with any university or government body in anyway. They will obtain periodical returns from the assisted units and from the Directors nominated by them on the Boards of such units. This means that an industrial company would be considered a sick industrial company once its net worth is completely eroded and has been registered for not less than five years. The tax benefit is in the form of carry forward of the accumulated business losses and un-provided depreciation of the sick companies by the healthy companies after amalgamation.
He may be a beginner full of enthusiasm to start a new unit and things on any of the above grounds, may be wrong. It is reckoned that as of today there are more than 2 lakhs sick units with an outstanding bank credit of over Rs7000crore nearly 29000 units are added to sick list every year. Urbanization is encouraged and groups of manufacturing towns may form. Maximum exploitation of new technologies to gain competitive advantage. Of the 5,418 references registered, 1,707 cases were dismissed as not maintainable, revival schemes were also sanctioned or approved in 760 cases and 1,303 cases were recommended to the concerned High Courts for winding up.
The main features of these guidelines are: a The administrative ministries in the government have been given specific responsibility for taking remedial action and preventing industrial sickness. As a resultof all the people who came to the cities, … some negative elementsemerged as well, such as poverty, abuse, alcoholism and crime. Magnitude of industrial sickness in India Industrial sickness is growing at an annual rate of about 28% and 13% respectively in terms of No. Historically, riots also took place, such as the action taken by the Luddites during the Industrial Revolution, and other machine-wrecking outbreaks. Internal Causes : The factors leading to sickness can be due to reasons of finance, technical issues, mismanagement, non-availability of raw materials, power or natural calamities or disasters such, as fire or earthquake or a combination of such factors. The Industry Exposure Team and Industry Exposure.
External causes are those which are beyond the control of its management and seen to be relatively more important than internal causes. Although industrialization is often seen as a solution to problems of poverty in the Third World, its effects may well not benefit any but a small sector of society. Simply put, a sick unit is one which is unable to support itself through the operation of internal resources that is, earnings plough-back. Technological up-gradation can help to overcome technological obsolescence. Also many tasks required men with considerable skills which could only be accomplished through long hours of work and practice. Every effort should be made in raising funds internally through the sale of excess assets, surplus machinery, etc.
Then they can train the rest of management and can teach the workers themselves about the best way to carry out their jobs with minimum threats to their health. Failure to do so or incapacity to do so many results in sickness of an industrial unit. These measures would improve the flow of credit and keep a check on the incidence of sickness. Overambitious projects The project may not be technically feasible, such an overambitious project is one of the reasons for industrial sickness. Defective capital Structure and Shortage of working capital is another reason. Even in industrially advanced countries there are numerous cases of bankruptcy or liquidation.
The Sick Industrial Companies Special Provisions Act, 1985, was enacted to help and revive the sick units. Later on in June 1987, a liberalized margin money scheme was introduced for reducing the sickness of small scale sectors where the amount of assistance was raised from Rs. The industrial health managers need training and experience identifying and remediating conditions that present major health threats to their respective workforces. Of these 14,793 were potentially viable, 278,423 were non-viable and the viability of the remaining 14,183 has not been decided. Hence, this affects the production and the sales of the goods. Non availability of raw material Some units may require raw material which are scarcely available.
Our staff consists of Music Artists, Studio Engineers, Modeling Recruiting Executives, Producers, and Photographers. As industrial sickness is an umbrella term applied to various things associated with industry that make people ill and cause them to miss work. Thus, high technology based units are established in areas without skilled labour on supporting infrastructure facilities industries based on imported raw materials are established in regions without adequate transport and communication system. Instead, it was a long slow, uneven process in which production shifted from simple hand tools to complex machines. The examples and perspective in this article deal primarily with India and do not represent a of the subject. According to the review, the maximum impact of industrial sickness is felt in the textile sector with 301 cases being reported from that sector alone, followed by paper and pulp sector with 138 and chemicals with 118 cases. Heavy capital cost escalation arising out of price inflation accentuates the problem.
The industrial sickness took place in all industrial groups such as cotton, jute, engineering, chemicals, rubber, paper, electrical equipments and sugar. It was expected that by revival, idle investments in sick units will become productive and by closure, the locked up investments in unviable units would get released for productive use elsewhere. The Companies Act Second Amendment suggests that definition of sickness should include companies which fail to repay its debt for consecutive three quarters to its debtors. Industrial units may become sick due to various reasons. In case of growing sickness, the financial institutions will also consider taking of management responsibility where they are confident of restoring a unit to health. It is concerned with a citizen's consumption of goods and services, human rights and the environment.