Industrial sickness is defined all over

the world In its most general sense, the term "world" refers to the totality of entities, to the whole of reality or to everything that is. The nature of the world has been conceptualized differently in different fields. Some conceptions see the worl ...

as "an industrial company (being a company registered for not less than five years) which has, at the end of any

financial year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many j ...

, accumulated losses equal to, or exceeding, its entire

net worth Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. Since financial assets minus outstanding liabilities equal net financial assets, net ...

and has also suffered cash losses in such financial year and the financial year immediately preceding such financial year".

Meaning for people

Industrial sickness is a term applied to various things associated with

industry Industry may refer to: Economics * Industry (economics), a generally categorized branch of economic activity * Industry (manufacturing), a specific branch of economic activity, typically in factories with machinery * The wider industrial sector ...

that make people ill and cause them to miss work. The solutions will have to be tailored to the specific industry, and only in that way can any real effect be made on improving the

health Health, according to the World Health Organization, is "a state of complete physical, mental and social well-being and not merely the absence of disease and infirmity".World Health Organization. (2006)''Constitution of the World Health Organiza ...

and

productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...

of the industrial

workforce The workforce or labour force is a concept referring to the Pooling (resource management), pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single types of companies, company or ...

. The key is an aggressive work-up on the health issues for a given segment of the industrial workforce, and usually broken down by type of work (which makes sense). Even as

coal mine Coal mining is the process of extracting coal from the ground. Coal is valued for its energy content and since the 1880s has been widely used to generate electricity. Steel and cement industries use coal as a fuel for extraction of iron from ...

rs face overpowering

respiratory The respiratory system (also respiratory apparatus, ventilatory system) is a biological system consisting of specific organs and structures used for gas exchange in animals and plants. The anatomy and physiology that make this happen varies grea ...

threats, and

foundry A foundry is a factory that produces metal castings. Metals are cast into shapes by melting them into a liquid, pouring the metal into a mold, and removing the mold material after the metal has solidified as it cools. The most common metals pr ...

and

mill Mill may refer to: Science and technology * * Mill (grinding) * Milling (machining) * Millwork * Textile mill * Steel mill, a factory for the manufacture of steel * List of types of mill * Mill, the arithmetic unit of the Analytical Engine early ...

workers have to confront major physical threats from large (heavy) quantities of extremely hot materials, each facet of industrial production has its hot-button health issues. Industrial health managers need training and experience identifying and remediating conditions that present major health threats to their respective workforces. Then they can train the rest of management and can teach the workers themselves about the best way to carry out their jobs with minimum threats to their health.

Meaning for companies

According to Companies (Second Amendment) Act, 2002 "'Sick Industrial Company' means an industrial company which has i) The Accumulated losses in any financial year equal to 50 per cent or more of its average net worth during four years immediately preceding such financial year; or ii) Failed to repay its

debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...

s within any three consecutive quarters on demand made in writing for its repayment by a

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

or creditors of such company."

Industrial Sickness In India

Industrial sickness specially in small-scale Industry has been always a demerit for the

Indian economy The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable state participation in strategic sectors. * * * * It is the world's fifth-largest economy by nomina ...

, because more and more industries like –

cotton Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus ''Gossypium'' in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor perce ...

Jute Jute is a long, soft, shiny bast fiber that can be spun into coarse, strong threads. It is produced from flowering plants in the genus ''Corchorus'', which is in the mallow family Malvaceae. The primary source of the fiber is ''Corchorus olit ...

Sugar Sugar is the generic name for sweet-tasting, soluble carbohydrates, many of which are used in food. Simple sugars, also called monosaccharides, include glucose, fructose, and galactose. Compound sugars, also called disaccharides or double ...

Textiles Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...

small steel and engineering industries are being affected by this sickness problem. As per an estimate 300 units in the medium and large scale sector were either closed or were on the stage of closing in the year 1976. About 10% of 4 lakhs unit were also reported to be ailing. And this position also remain same in the next decades. At the end of year 1986, the member of sick units in the portfolio of scheduled

commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with cor ...

s stood at 1,47,740 involving an out standing bank credit of Rs. 4874 crores. * Where the total number of large Industries which are sick were 637 units at the end of year 1985 increased to 714 units in the end of next year 1986. * Likewise on the other hand the number of sick small scale units were also increased 1.18 lakhs at the end of 1985 to 1.46 lakhs at the end of 1986. * The bank amount which was outstanding in case of large industries for the same period also increased from Rs.2,900 crores to Rs. 3287 crores at the end of year 1986 * Dues of Small Scale sector also increased from Rs.1071 crores to Rs.1306 crores at the end of the year 1986. * Of the 147, 740 sick industrial units which contains large medium as well as small scale involving the total

bank loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...

(credit) of Rs. 4874 at the end of the year 1986.

Causes of sickness in small scale industry

The different types of industrial sickness in

Small Scale Industry Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ap ...

(SSI) fall under two important categories. They are as follows:

Internal causes for sickness

We can say pertaining to the factors which are within the control of

management Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities o ...

. This sickness arises due to internal disorder in the areas justified as following: a) Lack of Finance: This including weak equity base, poor utilization of assets, inefficient

working capital management Corporate finance is the area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allo ...

, absence of costing & pricing, absence of planning and budgeting and inappropriate utilization or diversion of funds. b) Bad Production Policies : Another very important reason for sickness is wrong selection of site which is related to production, inappropriate plant & machinery, bad maintenance of Plant & Machinery, lack of

quality control Quality control (QC) is a process by which entities review the quality of all factors involved in production. ISO 9000 defines quality control as "a part of quality management focused on fulfilling quality requirements". This approach places ...

, lack of standard research & development and so on. c) Marketing and Sickness : This is another part which always affects the health of any sector as well as SSI. This including wrong

demand forecasting Demand forecasting is known as the process of making future estimations in relation to customer demand over a specific period. Generally, demand forecasting will consider historical data and other analytical information to produce the most accurat ...

, selection of inappropriate product mix, absence of product planning, wrong

market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...

methods, and bad sales promotions. d) Inappropriate Personnel Management: Another internal reason for the sickness of SSIs is inappropriate

personnel management Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other ...

policies which includes bad wages and salary administration, bad labour relations, lack of behavioural approach causes dissatisfaction among the employees and workers. e) Ineffective Corporate Management: Another reason for the sickness of SSIs is ineffective or bad

corporate management Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities o ...

which includes improper corporate planning, lack of integrity in top management, lack of coordination and control etc.

External causes for sickness

a) Personnel Constraint: The first for most important reason for the sickness of small scale industries are non availability of skilled labour or manpower wages disparity in similar industry and general labour invested in the area. b) Marketing Constraints: The second cause for the sickness is related to

marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...

. The sickness arrives due to liberal licensing policies, restrain of purchase by bulk purchasers, changes in global marketing scenario, excessive tax policies by government and market recession. c) Production Constraints: This is another reason for the sickness which comes under external cause of sickness. This arises due to shortage of

raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials that are feedstock for future finished products. As feedst ...

, shortage of power, fuel and high prices, import-export restrictions. d) Finance Constraints: Another external cause for the sickness of SSIs is lack of finance. This arises due to credit restrains policy, delay in disbursement of loan by govt., unfavorable investments, fear of

nationalization Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...

. e)credit squeeze initiated by the government policies.

References

{{reflist # Sick Industrial Companies (Special Provisions) Act, 1985, http://legalpundits.com/Content_folder/SICKA24092008.pdf # https://www.scribd.com/doc/19150346/Industrial-Sickness-of-India # An article on Industrial Sickness from S. Murlidharan, http://www.thehindubusinessline.in/2004/07/15/stories/2004071500041100.htm