INDUSTRIAL SICKNESS

Prevention Measures and Curative Measures

By Alisab Nadaf
Research Scholar
 • Meaning of Industrial Sickness

• Remedies Presentation
• Prevention measures
• Curative measures Outline
Remedies Prevention Measures and
Curative Measures

Reference : Essentials of Business Environments by K Aswathappa & Internet source

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Meaning of Industrial Sickness.

Industrial sickness is defined all over the world as "an

industrial company which has, at the end of any financial
year accumulated losses equal to, or exceeding, its
entire net worth and has also suffered cash losses in such
financial year and the financial year immediately preceding
such financial year".
Industrial Sickness
What it is ???????????????????

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Remedies
In order to tackle the problem of sickness from
two angles. Viz

 Preventing sickness from occurring

 Curing sickness if it has taken place

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 Remedies to cure sickness fall into two categories-
Preventive & Curative.

Curative measures intervene when a unit falls into sick.

Preventive measures seek to prevent a unit before falling
sick .
Obviously preventive measures are preferable as the popular
Quote.
Preventing
Prevention is better than Cure
sickness from
occurring
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 How to prevent Industry
falling into Sickness ?
Following 3 categories are play important
role to prevent Industry from sickness

1. Industrialist
2. Government
3. Financial Institution

Reference : Essentials of Business Environments by K Aswathappa & Internet source TREY 6

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 How Industrialist ?
Industrialist can prevent the unit from sickness by taking right actions on the following

1. Finance
2. Production
3. Marketing
4. Personal Management

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 How Government ?
Government can prevent the Industries from sickness by taking actions on the following

1. Infrastructure facilitating
2. Creating more Industrial and financial Institutions which support to the Industry
development
3. Package of Incentive for entrepreneurs
4. Protecting the Domestic Industries from the foreign Industries.
5. Liberalizing the export rules and regulations

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 How Financial Institution ?
The following are the ways by which sickness can be prevented by the financial Institution

1. Continues monitoring unit

2. Careful project appraisal

3. Professional Institutional Response to units problems

4. Required System at Client Units

5. Incentive to Units to Remain Healthy

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1. Continuous Monitoring Units

1. Periodic financial report

2. Desk officers for client unit
3. Institutional nominee on the board
4. Periodic inspection of Reports and Accounts
5. Institutional advisor deputed to the unit especially to monitor project implementation in risky ventures.
1. Careful project Appraisal

1. Independent verification of sales, profit etc. projection of client

2. Carful scrutiny of technology and plant size, choice of location, and Quality management
3. Use of external consultants for apprising large or risky projects
1. Professional Institutional Response to Units Problems
1. Training of desk officer and reputed advisers in professional management
2. Discretionary authority to monitoring deck officers to commit the institutions to immediate contingency relief
3. Better coordination and faster response by the financial Institutions through a smaller consortium
1. Required Systems at Client Unit
1. Approval of financial institutions for appointing Internal and statutory Auditors
2. Professional management training for promoter
1. Incentive to units to remain Healthy
1. Interest relief if there is no sickness
2. a footer
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 Curative measures

sickness of Industries

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 Curative measures ?
1. Identifying Sickness at initial stage
2. Improving infrastructure
3. Technology Up-gradation
4. Government intervention
5. Marketing Assistance
6. Training to Employees
7. Rehabilitation
8. Liquidation

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 Identifying sickness at initial stage

Sickness in Industries are not a sudden phenomenon but it is a gradual process taking 5 to 7

years eat into the health of a unit beyond cure. Therefore, the identification and detection of

the sickness at initial stage is the first and foremost measure to detect and reduce industrial

sickness. Sickness must be identified at initial stage.

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 Improving infrastructure

Infrastructure facilities can be improved by setting up industrial estates. Common

testing centers etc., Infrastructural problems can be solved by improving the

roadways, waterways, establishing telecommunication systems.

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 Technology Up-gradation

financial institutions should provide for adoption of advanced technology. Similarly,

some sort of training may be provided for use of the latest technology to overcome

technological problems.

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 Government intervention

Interventions must be made by the government to prevent sickness. Periodic review of

financial statements of Industries can help to identify and prevent sickness at initial stage.

By making changes in rate of Interest, Introducing the loan schemes. Or relaxing the

industry by tax bracket etc

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 Marketing Assistance

• Marketing assistance may be provided to entrepreneurs for marketing the goods produced

by them. Government must help to market the goods. Government and Non Government

Organizations (N.G.Os) can come forward for marketing the goods produced by the SSI

sector. The problem of poor marketing of the products can be solved by coordinated

efforts of entrepreneurs and promotional agencies.

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 Training to Employees

• A proper environment must be created where an entrepreneur will be educated

and will have a proper knowledge, skill and experience about internal and

external environment of business to compete with large-scale industries and

multinational companies.

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 Rehabilitation

• Potentially viable sick units should be dealt well for the purpose of

rehabilitation. Rehabilitation is a remedy considered for industrial

units, which have already become sick and for the units that are on

the verge of collapse.

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 Liquidation

If it uncontrollable situation It is better to wind up the business when

there is no possibility to revive the unit.

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 Thank you

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