This PPT discuss about the industrial sickness and their causes. It should help to B.com, BCA and BBA class. Thank You.

1. INDUSTRIAL SICKNESS
PRESENTATION ON…

2. DEFINITION OF INDUSTRIAL
SICKNESS
• A sick unit is that unit which fails to generate internal
surplus on a continuing basis and depends for its
survival on frequent infusion of external funds.
(STATE BANK OF INDIA)

3. SYMPTOMS OF INDUSTRIAL SICKNESS
• Shortage of Liquid Funds to meet Short-term
Financial Obligations and other Statutory
Obligations.
• Accumulation of Excessive Inventories.
• Underutilization of Capacity.
• Decreasing Return on Investment.
• Deteriorating Financial Ratios.
• Financing Capital Expenditure out of Shot-term
Sources.
• Other Symptoms.

4. CAUSES OF INDUSTRIAL SICKNESS

5. CAUSES OF BORN SICKNESS:-
• Wrong Location.
• Inexperienced Promoters.
• Technological Factors.
• Investment in Unproductive Capital Assets.
• Long Gestation Period.

6. CAUSES OF ACHIEVED SICKNESS
Internal Causes
• Management
Problems.
• Financial Problems.
• Labor Problems.
• Diversion of
Resources.
• Failure to Modernize.
• Personal
Unproductive
Expenditure.
• Over Capitalization.
External Causes
• Government Policy.
• Increased Competition
from MNCs.
• Power Cuts.
• Shortage of Raw Material.
• Recession in the Market.
• De-reservation.
• Credit Sources.

7. CONSEQUENCES/ EFFECTS OF INDUSTRIAL
SICKNESS
• Setback to Employment Prospects.
• Wastage of Resources.
• Adverse Effect on Related Units.
• Industrial Unrest.
• Adverse effect on Investors and Entrepreneurs.
• Loss to Banks and Financial Institutions.
• Loss of Revenue to Government.

8. SUGGESTIONS TO PREVENT AND CURE
INDUSTRIAL SICKNESS
• Proper Project Planning.
• Proper Market Analysis.
• Availability of Trained and Experience Managerial
Staff.
• Balanced Marketing Mix.
• Research and Development (R&D).
• Periodical Review.

9. CONT’D…
• Diversification.
• Avoid Excessive Investment in Unproductive Capital
• Assets.
• Soft Loans for Sick Units.
• Amalgamation.
• Cost Reduction and Cost Control.

10. MEASURES ADOPTED TO PREVENT
INDUSTRIAL SICKNESS
Measures Taken by
Banks.
• Recovery of interest at
reduced rates.
• Grant of additional
working capital to
overcome the shortage of
working capital.
• Rescheduling the
payment of loans.
• Writing off the whole or a
part of accrued interest.
Measures Taken by
Government.
• Takeover of
Management.
• Amalgamation with
healthy units.
• Excise loan.
• Setting up Industrial
Investment Bank of India.
• Enacting SICA and
Establishing BIFR.
• Margin Money Scheme.

11. THANK YOU