The Problem of Industrial Sickness in India is of growing concern because it wastes capital apart from decrease in employment.
Various committee appointed, found out many reasons for the Industrial Sickness. The important reasons are divided into-Internal and External reasons.
First one is associated with managerial ineffectiveness, which include poor control on key areas of operations and finance. Improper estimate of demand is another reason. Improper technology, wrong location of Industry, non- flexibility of fixed assets etc.
Defective capital Structure and Shortage of working capital is another reason.
Second reasons regarding external reasons area like High costs of manufacturing compared to Sales revenue, Non-availability of raw material, regular power, fuel etc.
Transportation bottlenecks, General recessionary from in the economy affecting the overall performance of industrial units, Adverse Policies and rules of government. The measures to overcome these reasons of sickness can be suggested as under.
(a) Effective and efficient management skills should be provided.
(b) Technology should be upgraded.
(c) Modernisation and Competitiveness.
(d) Assessment of various factors of Loans etc. can be provided.
(e) Liberal and helpful Policies of Government.