by Industrial sickness refers to a condition where an industrial unit or enterprise becomes unprofitable and unable to meet its financial obligations to lenders, creditors, and workers. The term is used to describe situations where industries are unable to maintain the production of goods or services due to various factors that lead to a decline in their performance. Industrial sickness is a significant problem in many countries, including India.
Causes of Industrial Sickness in India:
- Internal Factors: Internal factors such as poor management, labor problems, obsolete technology, high cost of production, inadequate capacity utilization, and lack of innovation can contribute to industrial sickness.
- External Factors: External factors such as changes in government policies, adverse market conditions, stiff competition, economic recession, lack of infrastructure, and inadequate finance and credit facilities can also contribute to industrial sickness.
- Structural Problems: Structural problems such as the existence of sick units in the sector, an inadequate regulatory framework, and lack of modernization and diversification can also contribute to industrial sickness.
- Socio-economic Issues: Socio-economic issues such as the concentration of industries in specific regions, regional imbalances, and inadequate employment opportunities in rural areas can also contribute to industrial sickness.
Measures to Overcome Industrial Sickness:
- Financial Restructuring: Financial restructuring involves the rescheduling of loans and repayment terms to enable industries to meet their financial obligations. The government can provide financial assistance in the form of loans, subsidies, and tax incentives to help industries recover.
- Technological Upgradation: Technological upgradation is essential to enhance the competitiveness of industries. The government can provide incentives for the modernization of technology and help industries adopt new technology.
- Diversification: Diversification involves the expansion of the product range to reduce dependence on a single product. The government can provide incentives for diversification and encourage industries to explore new products and markets.
- Revival Packages: The government can provide revival packages to help sick industries recover. These packages can include tax incentives, subsidies, loan waivers, and other financial assistance.
- Legal Framework: The government can create a legal framework to help industries resolve disputes and negotiate with creditors and lenders. The legal framework can also provide protection to workers in case of closure or restructuring of the unit.
- Infrastructure Development: The government can provide infrastructure facilities such as power, transport, and communication to promote the growth of industries in different regions.
