Causes of Industrial Sickness in India and Suggestions to Overcome the Problem

1. Causes of Industrial Sickness:

• Financial Mismanagement: Poor financial planning and inadequate capital management lead to cash flow issues. For example, IL&FS crisis (2018) highlighted issues of liquidity and financial mismanagement in large firms.
• Technological Obsolescence: Failure to update technology results in inefficiency. Many small and medium enterprises (SMEs) face this issue due to lack of investment in modern equipment.
• Operational Inefficiencies: Ineffective management practices and operational inefficiencies, such as those seen in textile mills in Tamil Nadu, contribute to industrial sickness.

2. Suggestions to Overcome the Problem:

• Financial Restructuring: Implementing financial restructuring plans and improving access to credit can help. Revival packages from the government can assist distressed firms.
• Technology Upgradation: Encourage investment in new technology through subsidies and grants. Initiatives like the Production Linked Incentive (PLI) Scheme aim to boost technological advancements.
• Operational Efficiency: Improve management practices and streamline operations through training and consultancy services.

Conclusion: Industrial sickness in India stems from financial mismanagement, technological obsolescence, and operational inefficiencies. Addressing these issues through financial restructuring, technology upgrades, and improved management practices can help mitigate the problem.