Industrial sickness refers to a situation in which an industrial unit becomes financially unviable and unable to generate adequate returns to sustain its operations, repay debts, or meet its obligations. Over time, especially in developing economies, industrial sickness has emerged as a serious concern due to mismanagement, outdated technology, poor demand forecasting, infrastructural bottlenecks, and adverse economic policies. Government policy in relation to industrial sickness has evolved with the objective of identifying sick units at an early stage, reviving potentially viable enterprises, protecting employment, safeguarding financial institutions, and facilitating the closure of non-viable units in an orderly manner. The main features of such policy reflect a balance between rehabilitation and liquidation. One of the primary features of government policy is the early identification of sick industrial units. Timely detection is essential to prevent further erosion of capital and assets. Governments have established criteria to determine sickness, such as continuous cash losses, erosion of net worth, and default in repayment of loans. Financial institutions and banks are required to monitor the performance of borrowing units and report signs of distress. This systematic monitoring mechanism enables corrective measures before the situation becomes irreversible. Another significant feature is the institutional framework for revival and rehabilitation. Governments have created specialized bodies or tribunals to deal exclusively with sick industrial companies. These institutions are empowered to examine the financial position of the enterprise, assess its viability, and recommend appropriate remedial measures. The aim is to provide a structured and legal mechanism for resolving industrial sickness rather than allowing chaotic closures or prolonged uncertainty.