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INTRODUCTION
Sick industries have far-reaching consequences on the economy of the nation. The following are the bad effects of Industrial Sickness-1.There is under utilization of capital assets. 2.The entrepreneurship level declines.. Increase in industrial sickness discourages entrepreneurship. 3.The investor confidence reaches a lower ebb. Thus, capital is not put to productive use.
DEFINITION OF SICKNESS
The sick industrial companies (Special provisions) Act, 1985, as amended in 1993 defines Sick Industrial Company as an industrial company (being a company registered for not less than five years) which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Revival Package
Once a company has been found sick, the BIFR may grant time to the sick company to enable it to make its networth positive and bring the company out of sickness, without any external financial assistance. The BIFR will direct the operating agency to prepare a suitable revival package for the restoration of the health of the company.
Revival Package includes- additional financial assistance, postponement of recovery of loan already lent by banks, change in management, amalgamation, sale of redundant assets, lease of assets or any other suitable measure.
Causes of Sickness
Internal Causes1.
2. 3. 4. 5. 6.
Project formulation. Project implementation. Production. Marketing. Finance. General and personnel administration
External Causes
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