This arises due to shortage of , shortage of power, fuel and high prices, import-export restrictions. The public sector has been central to our philosophy of development. If the company is a Public Limited Company i. A need is felt for increasing the promoters' contribution towards rehabilitation from the present limits. Viability of a unit identified as sick, should be decided quickly and made known to the unit and others concerned at the earliest. Government policy and procedures must be geared to assisting entrepreneurs in their efforts.
Such a relationship becomes difficult to achieve when the approval process includes unnecessary governmental interference on a case to case basis involving endemic delays and fostering uncertainty. The solutions will have to be tailored to the specific industry, and only in that way can any real effect be made on improving the health and … productivity of the industrial workforce. Promotion of exports of Indian products calls for a systematic exploration of world markets possible only through intensive and highly professional marketing activities. In projects where imported capital goods are required, automatic clearance will be given a. Paper and pulp including paper products. The examples and perspective in this article deal primarily with India and do not represent a of the subject.
Glass shells for television tubes. In 1948, immediately after Independence, Government introduced the Industrial Policy Resolution. The net worth is calculated as sum total of paid up capital and free reserves of a company less the provisions and expenses, as may be prescribed. To meet new challenges, from time to time, it was modified through statements in 1973, 1977 and 1980. The main recommendations of the Committee with respect to sick companies are: a For early detection of sickness the definition of sickness should be changed to:- i Default of 180 days or more on repayment to term lending institutions, and ii irregularities in cash credits or working capital for 180 days or more.
Alternate energy systems like solar wind etc. All items of packaging for food processing industries excluding the items reserved for small scale sector. Market obsolescence is one of the prime reasons for units turning sick. When the-problem becomes really alarming or unmanageable, the unit is permitted to die its natural death. Heavy organic chemicals including petrochemicals. Government will continue to pursue a sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology through investment in research and development, bringing in new technology, dismantling of the regulatory system, development of the capital markets and increasing competitiveness for the benefit of the common man.
Suggested Remedies : Some of the effective measures which may be taken for revival of sick units are technical help, professional counselling and improved management. It is, therefore, open to banks and financial institutions to stipulate a higher promoters' contribution where warranted. Moreover, financial assistance in the form of long-term equity up to Rs. It is often observed that many projects are started without proper feasibility study. A number of policy and procedural changes were introduced in 1985 and 1986 under the leadership of Shri Rajiv Gandhi aimed at increasing productivity, reducing costs and improving quality. Introduction of a scheme of Integrated Infrastructural development including technological back up services for small scale industries.
Banks Initiatives : In order to rehabilitate sick industrial units the commercial banks have granted various concessions, such as, i grant of additional working capital facilities to overcome the shortage of working capital faced by such units, ii recovery of interest at reduced rates, iii Suitable moratorium on payment of interest; and iv Freezing a portion of the out-standings in the accounts, etc. If countries are going to be looking to get their overseas products from other countries which are going to do the work and provide the products on a cheaper scale, then they are not going to want to do business … with India any longer. The other causes are: ii Differences among various persons associated with the promotion and management of the enterprise iii Mechanical defects and breakdown iv Inability to purchase raw materials at an economic price and at the right time v Failure to make controls effective in time, in case of deficiencies in workings vi Deteriorating labour-management relations and the consequent fall in capacity utilisation vii Faulty financial planning and lack of balance in the financial capital structure. The Industrial Policy statement of 1973, inter alia, identified high-priority industries where investment from large industrial houses and foreign companies would be permitted. In the light of the above consequences of sickness and its growing incidence by size, region and industry followed by its far-reaching adverse socio-economic effects, the Government has been taking many steps and remedial measures in order to tackle this problem in India. Similarly the public sector will also be allowed entry in areas not reserved for it. As industrial sickness is an umbrella term applied to various things associated with industry that make people ill and cause them to miss work.
There are a large number of chronically sick public enterprises incurring heavy losses, operating in a competitive market and serve little or no public purpose. So the don't get enough income and are not profitable. Instead, a project is sought to be managed on the basis of myopic vision, inadequate analysis and improper approach. Of late, it has assumed serious proportions. Please acknowledge receipt to the concerned Regional Office.
The Seventh Plan recognised the need to consolidate on these strengths and to take initiatives to prepare Indian industry to respond effectively to the emerging challenges. Omkar Goswami submitted its report in July 1993. Crores Percent of Total 1. Earlier it was considered Rs. A full realisation of the industrial potential of the country calls for a continuation of this process of change. Distillation and brewing of alcoholic drinks.
The State also commands the bulk of the nation's savings. The role of the bankers needs to be redefined and a new direction needs to be given to support aid and lift sick industrial units from the situations that befall them. Over 15 lakh workers have been affected by companies turning sick. Interest on this contingency assistance may be charged at the concessional rate allowed for working capital assistance. The accent was on opening the domestic market to increased competition and readying our industry to stand on its own in the face of international competition.
Â· Technology development and building of manufacturing capabilities in areas which are crucial in the long term development of the economy and where private sector investment is inadequate. The key is an aggresive work-up on the health issues for a given segment of the industrial workforce, and usually broken down by type of work which makes sense. This is because prices change constantly. Further impetus must be provided to these changes which alone can push this country towards the attainment of its entrepreneurial and industrial potential. One of the factors contributing to such delay was found to be the time taken by banks having multiple branches for obtaining clearance from the Head Office for the relief and concessions. It is of utmost importance to take measures to ensure that sickness is arrested at the incipient stage itself.