Question

. Define Industrial Sickness. Suggest remedial measures for prevention of sickness of
public enterprises.

09 Jul 2026
Answer :
Word Count : 683
Industrial sickness refers to the condition in which an industrial enterprise becomes financially weak and is unable to generate sufficient income to meet its operating expenses, repay debts, or earn a reasonable return on investment. A sick industrial unit experiences continuous losses, declining productivity, low capacity utilization, poor liquidity, and erosion of net worth. In the context of public enterprises, industrial sickness not only affects profitability but also leads to wastage of public funds, unemployment, lower industrial output, and reduced contribution to national economic development. Industrial sickness in public enterprises may arise due to internal as well as external factors. Internal factors include poor management, inefficient utilization of resources, obsolete technology, inadequate financial planning, weak marketing strategies, overstaffing, labour disputes, and lack of accountability. External factors include economic recession, policy changes, shortage of raw materials, increased competition, changes in consumer demand, inflation, and regulatory constraints. The prevention of industrial sickness in public enterprises requires timely intervention and effective managerial, financial, and operational measures. The important remedial measures are as follows: Early identification of sickness is essential. Financial and operational performance should be continuously monitored through management information systems. Early warning indicators such as declining sales, rising costs, cash flow shortages, and increasing debt should be identified promptly so that corrective actions can be initiated before the situation worsens. Professional and competent management should be appointed to lead public enterprises. Managers should possess technical expertise, strategic vision, and administrative capability. Political interference in day-to-day management should be
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