What is the meaning of sick industries?
The act defined a sick industrial unit as one that had existed for at least five years and had incurred accumulated losses equal to or exceeding its entire net worth at the end of any financial year.
What are the cause of industrial sickness?
The industrial sickness is also caused by certain changes in policy designs of the government. These frequent changes affect the long-term production, financial and marketing planning of an industrial unit. Changes in Government policies regarding imports, industrial licensing, taxation can make viable units sick.
How do you know you have industrial sickness?
Some of the important symptoms which characterize industrial sickness are listed as follows: (i) Persisting shortage of cash; (ii) Deteriorating financial ratios; (iii) Widespread use of creative accounting; (iv) Continuous tumble in the prices of the shares; (v) Frequent request to banks and financial institutions for …
How do you overcome industrial sickness?
Rehabilitation is a remedy considered for industrial units, which have already become sick and for the units that are on the verge of collapse. Sickness in small scale industries are not a sudden phenomenon but it is a gradual process taking 5 to 7 years eroding the health of a unit beyond cure.
What are the two main types of causes of industrial sickness?
Causes of Industrial Sickness:
- (i) Recession in the Market:
- (ii) Decline in Market Demand for the Product:
- (iii) Excessive Competition in the Market:
- (iv) Erratic Supply of Inputs:
- (v) Government Policy:
- (vi) Unforeseen Circumstances:
- (i) Faulty Planning:
- (ii) Incompetent Entrepreneurs:
What are symptoms of industrial sickness?
Some of the important symptoms which characterize industrial sickness are given below: persisting shortage of cash, deteriorating financial ratios, widespread use of creative accounting, continuous tumble in the prices of the shares, frequent request to banks and financial institutions for loans, delay and default in …
What are the measures of industrial sickness?
Some of the remedial measures to curb and overcome sickness in industrial undertakings are as follows:
- Identifying sickness at initial stage.
- Financial assistance.
- Improving Infrastructure.
- Technology Up-gradation.
- Marketing assistance.
- Liquidation.
- Government Interventions.
- Training.
What are the warning signals of industrial sickness?
Literature reveals the various signals of industrial sickness as continuous irregularity in cash credit accounts ; low capacity utilization; profit fluctuations, downward sales and fall in profits followed by contraction in the share market; failure to pay statutory liabilities; larger and longer outstanding in the …
What are the signals of sickness?
If you or someone you know suffers from chest pain along with nausea, shortness of breath, pain or numbness, lightheadedness or dizziness, sudden weakness, flushing or a cold sweat, call 911 immediately.
How do you identify a sick industrial unit?
The Reserve Bank of India has defined a sick unit as one “which has incurred a cash loss for one year and is likely to continue incurring losses for the current year as well as in the following year and the unit has an imbalance in its financial structure, such as, current ratio is less than 1: 1 and there is worsening …
Which is not an external cause of industrial sickness?
Lack of skilled and trained labour is not an external cause of sickness of small businesses. Small Scale Industries (SSIs) play vital role in the economic development of a country. Some of the major causes for sickness in small scale industries are dealt in brief: Inadequacy of working capital.
What are the symptoms of industrial sickness MCQS?
Lack of finance
- Weak equity base and poor utilization of assets.
- Inefficient working capital management.
- Absence of costing & pricing and budgeting.
- Inappropriate utilization of funds.
Which bank revives sick industrial units?
The Industrial Reconstruction Bank of India (IRBI) set up in 1985 has initiated various steps for checking the growth of industrial sickness and helping in industrial revival.
Which of the following is not external cause of industrial sickness?
Lack of skilled and trained labour is not an external cause of sickness of small businesses.
What is the rehabilitation of sick units?
Viability of a unit identified as sick, should be decided quickly and made known to the unit and others concerned at the earliest. The rehabilitation package should be fully implemented within six months from the date the unit is declared as ‘potentially viable’ / ‘viable’.
How can we protect the sick industrial units in India?
The Government also announced a ‘margin money’ scheme (effective from January 1, 1982) for reviving viable sick small-scale units. Under the scheme, a sick small-scale unit was sanctioned a minimum loan of Rs. 1, 000 and a maximum of Rs. 20,000.