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until it reaches a stage where it is overburdened with debt and not being able to generate sufficient funds to meet its obligation.
performance in
Cont..
4. To an Industrialist:It is a unit which is making losses and about to close.
Introduction:
1. As industrial sickness is an umbrella term applied to various things associated with industry that make people ill and cause them to miss work. Industrial sickness has been growing from the last decade. The health of many traditional and modern industries are now being effected adversely by industrial sickness. It causes wastage of national resource and social un rest. Persisting problems are been faced by the industrial sector of the country.
2. 3. 4. 5.
Actual Sickness:
1.
2.
3.
Causes
Internal
External
Internal Causes:
Faulty location of industrial unit; Defective selection of plant and machineries; Improper Choice Of Technology; Official or Government Policy; Faulty financial management;
Incompetent entrepreneurs;
Lack of experience;
External Causes:
Energy crisis; Irregular Supply Of Inputs; Recession; Official or Government Policy; Lack of Infrastructure Facilities;
Tough Competition;
Changes in Technology; Change in consumer behaviour;
Consequences of IS:
1. Adverse impact on society:a) b) c) Lack of employment opportunity; Lack labour intensive; High unsatisfaction rate;
2. Fear of industrial unrest :a) b) c) High unemployment rate; Low productivity; Unfavour of trade union;
Consequences of IS Cont..
4. Adverse impact on related units:
a) b) c) Channel breakdown between industries; Impact on suppliers; Impact on distributors;
5. Adverse effect on investor & entrepreneur:a) b) c) Low satisfaction of investor; Negative effect on the same line new entrepreneur; Effect on the growth rate of industry;
6. Losses to banks & financial institution:a) b) c) low recovery rate of banks & institution; loss image in the market; lack of financial support for new industries;
Remedial Measures:
1. Measures taken by banks:
a) b) c) d) e) f) Granting additional working capital; Recovery of interest at reduced rate; Freezing a part of understanding in accounts; Sick industrial undertaking cell; State-level inter institutional committes; defining the special cell in the RBI;
Features: Giving advice to the banks; Monitoring certain industries through its standing committees; b) Introduce excise loan policy in October 1989