Define industrial sickness. What are its symptoms and causes? What are the measures adopted by the government to rehabilitate sick units.
Industrial Sickness is a phenomenon characterised by loss of production and employment of industries.
The industrial sickness basically occurred in the traditional industries which were developed long ago. With the abolition of managing agency system there was no mechanism to stem the rot and industries maintained by managing agents were hard hit in the industrial sickness.
The industrial sickness took place in all industrial groups such as cotton, jute, engineering, chemicals, rubber, paper, electrical equipments and sugar. The industrial sickness syndrome suffered mostly in west Bengal, Maharastra, Tamil Nadu and Uttar Pradesh.
The term “sickness” is used to describe the phenomenon of the closure of industries and loss of production with the assumption that, if a nursing programme is taken then the industrial unit may be nursed back to health.
In a capital poor economy like ours, we can not afford to have a new unit of the same magnitude. The assumption of the authority is not totally wrong, when we find many industrial units are still continuing their production and operation.
The Government of India tried to nurse many sick undertakings by taking over their management through Industrial (Development and Regulation). Act 1951. In many cases these sick industrial units could not be nursed back to health due to inadequate delegation of authority, bureaucratic control, red tapism, inadequate financial assistance by the government.
Inadequacy of finance may be due to the fact that government simultaneously took many industries under its control and which were considered necessary for social and public interest. However, after 1991, in the economic liberalisation phase government is considering to resell the units or close down units if they are not viable enough.
The different types of industrial sickness in Small Scale Industry (SSI) fall under two important categories. They are as follows:
Internal causes for sickness
We can say pertaining to the factors which are within the control of management. This sickness arises due to internal disorder in the areas justified as following:
a) Lack of Finance: This including weak equity base, poor utilization of assets, inefficient working capital management, absence
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