economic environment of businesss

PRESENTATION ON…

Analysis of Causes of Industrial Sickness in India & remedial Measures Presented by……. Abhishek maity- 12dm017 bandinee pradhan- 12dm023 pgdm , sec-a IMIS, BHUBANESWAR

Definition of Industrial Sickness-

A unit was defined as industrial company (being a company registered for not less than seven years )which has at the end of any financial year accumulated losses equal to or exceding its entire net worth and has also suffered cash losses in such financial year and the financial year immediately preceding such financial year.

Causes of Industrial Sickness-

External Causes

1)Govt policy

2)Erratic Supply of Inputs

3)Locational Problem

4)Technological Factors

5)Power Cuts

Internal Causes

1)Inexperienced Managerial Skills

2)Paucity of Funds

3)Entrepreneurial Incompetence

4)Week Management

5)Outdated Plant & Machinery

Consequences of Industrial Sickness

1)Industrial Unrest

2)Unemployment

3)Losses of Banks & Financial Institutions

4)Loss to Economy & Government.

Remedial Measures

Steps taken by Bank

# Giving adequate working capital when there is a shortage.

# Recovery of interest reduced rate.

# Defining the special cell in the RBI.

Cont’d

Concessions by Government

# Giving high facilities to large industry who take over the small sector for revival

# High liberalizations in terms of financial rather than intervention

# Introduce the scheme for sick industry

Cont’d

The Industrial Investment Bank of India

# Set up the IRCI (industrial reconstruction corporation of India.)

# Convert IRCI into IRBI in March 20 ,1985

# Convert IRBI into IIBI in march 27, 1997

Cont’d

B.I.F.R( Board for Industrial & Financial Reconstruction)

# Allowing company time on its own

# Deciding on the winding up of the company

# Having a scheme prepared through the operating agency in respect of the company

Conclusion

To conclude, the sick units may be attempted to be turned around through efficient management, change of top level executive, executing a turnaround strategy.