industry
baswanth mohan paruchuri
(Querist) 17 December 2010
This query is : Resolved
What is the meaning of the word in the legal terminology?what are the essential pre-requisites to recognise an industry a sick industry?
Advocate. Arunagiri
(Expert) 17 December 2010
You can get more details on going through this Sick Industrial Companies Act (SICA).
I am also giving some details:-
The two basic factors which may result in sickness of an industrial unit are:-
* Internal factors are those which arise within an organisation. They include:-
o Mismanagement in various functional areas of a company like finance, production, marketing and personnel;
o Wrong location of a unit;
o Overestimation of demand and wrong dividend policy;
o Poor implementation of projects which may be due to improper planning or managerial inefficiency;
o Poor inventory management in respect of finished goods as well as inputs;
o Unwarranted expansion and diversion of resources such as personal extravagances,excessive overheads, acquisition of unproductive fixed assets,etc.;
o Failure to modernise the productive apparatus, change the product mix and other elements of marketing mix to suit the changing environment;
o Poor labour-management relationship and associated low workers' morale and low productivity,strikes,lockouts, etc.
* External factors are those which take place outside an organisation. They include:-
o Energy crisis arising out of power cuts or shortage of coal or oil;
o Failure to achieve optimum capacity due to shortage of raw materials as a result of production set-backs in the supply industries, poor agricultural output because of natural reasons,changes in the import conditions,etc.
o Infrastructural problems like transport bottlenecks;
o Credit squeeze;
o Situations like market recession, changes in technology,etc;
o International pressures or circumstances, etc.
Industrial sickness may be caused by a combination of all such factors. It has several adverse consequences on the economy as a whole. Some of which may be enumerated as follows:-
* It leads to loss of substantial revenue to the Government and enhances its public expenditure;
* It locks up necessary resources and funds in the sick unit. This also increases the non-performing assets (NPAs) of banks and financial institutions;
* It leads to loss of production and productivity in the economy;
* It aggravates the problem of unemployment in the economy;
* It vitiates the industrial atmosphere and leads to worker-management disputes,strikes,lock-outs,etc;
* It undermines the public confidence in the functioning of the organised sector in the country which in turn affects the overall investment climate of the economy.
malipeddi jaggarao
(Expert) 18 December 2010
For definition of Industry please see the website relating to
The MSMED Act which had come into effect from 02/10/2006.
As per this Act the Industries are classified as follows:
Micro Enterprise:
If Engaged in Manufacturing /Production of Goods
Investment In Plant & Machinery* Not to Exceed Rs. Twenty Five Lakh Rupees
If Engaged In Providing/Rendering of Services
Investment In Equipment* Not to Exceed Rs. Ten Lakh Rupees
Small Enterprise:
If Engaged in Manufacturing /Production of Goods
Investment In Plant & Machinery* More than Rs.Twenty Five lakhs but does not exceed Rs. Five Crore Rupees.
If Engaged In Providing/Rendering of Services
Investment In Equipment* More than Rs.Ten lakhs but does not exceed Rs. Two Crore Rupees.
Medium Enterprise:
If Engaged in Manufacturing /Production of Goods
Investment In Plant & Machinery* More than Rs. Five Crore Rupees but does not exceed Rs. Ten Crore Rupees.
If Engaged In Providing/Rendering of Services
Investment In Equipment* More than Rs. Two Crore Rupees but does not exceed Rs. Five Crore Rupees.
Any Enterprises exceeding the above ceilings are Large Enterprises.
As far as symptoms of sickness is concerned I agree with Expert Mr.Arunagiri
