causes of industrial sickness
CAUSES OF INDUSTRIAL SICKNESS IN MAHARASHTRA… A STUDY (with special reference to Dombivli Industrial Estate, District Thane, Maharashtra State)
Growing incidence of sickness has been one of the major problems faced by the industrial sector of the country. Substantial amount of loanable funds of financial institutions is blocked up in sick industrial units causing not only wastage of resources but also affecting the healthy growth of the Indian Economy. While the government’s spokesmen blame on mismanagement as the main cause, the industry circles blame it on the wrong policies PURSUED by the Government. Though failure of industrial venture is not an uncommon feature, when such failures multiply, the assume sickness proportions. In India, sick units existed even in the past in some traditionally low-growth industries like cotton textile, jute and sugar. However, it has now spread to other industries such as Engineering, Rubber and Chemicals. Sickness is not only confined to the old but has also spread to the brand new units. The geographic spread is also quite wide, the sick unit dotting the industrial belts all over the country. The sickness is common both in the large scale and small scale units as well as in the public and private sectors. Various criteria have been suggested to define “Industrial Sickness” According to the Reserve Bank Of India, a sick unit is one “which has incurred cash losses for one year and in the judgment of the bank is likely to incur cash losses for the current year, as well as the following year and which has an imbalance in the financial structure such as current ratio is less than unity and worsening debts equity ratio (total outside liability to net equity)”. According to study group of the State Bank of India, a sick unit is one which “fails to generate internal surplus on regular basis and depends for its survival on the constant infusion of funds from outside”. The Govt. of India had once defined “a sick unit
Growing incidence of sickness has been one of the major problems faced by the industrial sector of the country. Substantial amount of loanable funds of financial institutions is blocked up in sick industrial units causing not only wastage of resources but also affecting the healthy growth of the Indian Economy. While the government’s spokesmen blame on mismanagement as the main cause, the industry circles blame it on the wrong policies PURSUED by the Government. Though failure of industrial venture is not an uncommon feature, when such failures multiply, the assume sickness proportions. In India, sick units existed even in the past in some traditionally low-growth industries like cotton textile, jute and sugar. However, it has now spread to other industries such as Engineering, Rubber and Chemicals. Sickness is not only confined to the old but has also spread to the brand new units. The geographic spread is also quite wide, the sick unit dotting the industrial belts all over the country. The sickness is common both in the large scale and small scale units as well as in the public and private sectors. Various criteria have been suggested to define “Industrial Sickness” According to the Reserve Bank Of India, a sick unit is one “which has incurred cash losses for one year and in the judgment of the bank is likely to incur cash losses for the current year, as well as the following year and which has an imbalance in the financial structure such as current ratio is less than unity and worsening debts equity ratio (total outside liability to net equity)”. According to study group of the State Bank of India, a sick unit is one which “fails to generate internal surplus on regular basis and depends for its survival on the constant infusion of funds from outside”. The Govt. of India had once defined “a sick unit