In a nutshell, it may be seen that incipient industrial sickness is that stage where the unit incurs cash losses; however the position of financial structure may not be very much alarming. The condition of 7 years have reduced to 5 years and the condition regarding cash losses has been omitted by the 1993 Amendment.
What are the causes for 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 the reasons for sickness of SSI?
Major Causes of Sickness in Small Scale Industries
- Inadequacy of working capital. Some units turn out sick due to inadequacy of working capital.
- Non-availability of credit.
- Poor and obsolete technology.
- Non availability of raw material.
- Marketing problems.
- Erratic power supply.
- Labour problems.
- Poor Management.
What are the causes and consequences of sickness in small scale industries?
4. Internal causes for sickness:- a) Lack of finance: Weak equity base, poor utilization of assets, inefficient working capital management, absence of costing & pricing, absence of planning and budgeting and inappropriate utilization or diversion of funds.
What is genuine sickness?
Nature of Sickness: Sickness in industry can be classified into: (a) Genuine sickness which is beyond the control of the promoters of the concern despite the sincere efforts by them, (b) Incipient sickness due to basic non-viability of the project, and.
What are the financial indicators of 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 …
What are the measures of industrial sickness?
The rehabilitation packages provided to the sick units consist of only financial measures such as rescheduling of debts, sanction of additional term loans for installation of new machineries, enhancement of working capital limit, etc.
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 reasons of sickness or failure of Msmes?
Major Causes of sickness:
- Inadequacy of working capital, delay in sanction of working capital and time gap between sanction of term loan and working capital.
- Poor and obsolete technology.
- Problem related to availability of raw material.
- Inadequate demand and other marketing problems.
- Erratic power supply.
- Labour problems.
What are the symptoms of sickness in SSI?
What do you mean by incipient Industrial sickness?
In a nutshell, it may be seen that incipient industrial sickness is that stage where the unit incurs cash losses; however the position of financial structure may not be very much alarming. This is the time to take certain corrective measures to prevent the unit from turning into sickness.
What causes sickness in small scale industrial units?
Small scale industrial units may find it very difficult to compete with large scale industries and foreign competitors. Inability of the units to face growing competition due to liberalization and globalization may lead to industrial sickness.
Which is considered a stage of incipient sickness?
Such a stage is considered to be incipient sickness and is identified by reference to the following symptoms: (1) There are continuous such losses from year to year and the trend is expected to continue in future.
Why is it important to know the causes of sickness?
It is important to know the causes of sickness. The pain of an attack of acute appendicitis may be eased by administering narcotics. But, while the person is unaware of pain, the appendix may burst and death may result. Carelessness about finding the cause of suffering has resulted in great damage and even the loss of lives.
