B.Com Ist Year Industrial Sickness Long Short Question Answer Notes

SUGGESTIONS FOR REHABILITATION OF SICK UNITS STUDY NOTES

The rehabilitation of sick units is a matter of great urgency in w of the serious social, economic and political consequences of custrial illness. Suggestions and steps taken by the government we rehabilitation of sick units are as follows:

(1) Amalgamation of Sick Units into Healthy Units : the rehabilitation of sick units, it is suggested that sick units must be merged in the healthy units. It will help to avoid the wastage of resources.

(2) Concessions by Government : Government has also provided certain concessions to assist revival of sick units without direct intervention. The government provide tax benefit to healthy units when they take over the sick units by amalgamation with a view to reviving them. The government also announced a ‘margin money’ scheme under which a sick small scale unit is sanctioned loans at soft term.

(3) Alert Management: If necessary, inefficient management should be replaced. The management should show a calm approach, patience, courage and ability to steer in bad weather.

(4) Improving Labour Relations: Efforts should be made to make good relations with the labour. Improving labour relations will go a long way in curing industrial sickness.

(5) Modernisation of Machinery: Restoring the sick units to normal health, old and obsolete machinery should be replaced. Out-dated technology should also be discarded at the earliest.

(6) Cut-down in Unnecessary Expenditures : Every effort should be made in raising funds internally through the sale of excess assets, surplus machinery etc. Unnecessary expenditure on tours, entertainments, personal expenses should be ruthlessly cut down.

(7) Steps for Detecting Sickness Early: The Reserve Bank has emphasised from time to time the importance of detecting sickness at the incipient stage so that corrective steps can be taken early. Reserve Bank has advised the banks to take necessary remedial steps in respect of industrial units at the stage of 50 per centerosion of their net worth.

(8) Board for Industrial and Financial Reconstruction: In terms of the Sick Industrial Companies (Special Provisions) Act, 1985, the Government of India set up the Board for Industrial and Financial Reconstruction (BIFR) in January 1987 for determining the preventive, ameliorative, remedial and other measures which are required to be taken in respect of sick industrial companies and for expenditious enforcement of the measures determined.

Other Programmes :

(i) The government established the Industrial Reconstructio Corporation of India (IRCI) with a view to reviving alle rehabilitating sick units.

(ii) Reserve Bank established a special cell which analysis te

efforts of banks made for the rehabilitation of sick units.

(iii) Inter institutional co-ordination committees are also established at state level by the Central Government.

Short Answer Questions

Discuss the main causes of industrial sickness in India.

Ans. See Page 83 and 84.

0.2. Write the effects of industrial sickness on the

economy of a country.

Ans. See Page 85.

Q.3. What measures have been taken by the government for the rehabilitation of industrial sickness?

Ans. See Page 85 and 86.

Q.4. Write a short note on the Board for Industrial and Financial Reconstruction (BIFR).

Or Discuss the main functions of BIFR.

Ans. Board for Industrial and Financial Reconstruction (BIFR) is set up by the government of India under the Sick Industrial Companies (Special Provision) Act. The board become operational from 1987.

FUNCTIONING OF BIFR NOTES

After receipt of reference either from the sick company or other agencies who are authorized to report to BIFR, the BIFR decides whether it will inquire itself into the matter or appoint an operating agency which is a financial institution or bank to determine whether a unit is die or not. It is desired by the Act that endeavour shall be made to complete the inquiry within sixty days from the commencement of the inquiry. If after the inquiry, BIFR is satisfied that the company has become sick, then it can give an opportunity to the company to improve its working and management remains in the hand of existing Board of Directors with such conditions as may be laid down But if the BIFR comes to the conclusion after inquiry that it is not practical for the sick company to revive and it is necessary or expedient in the public enterest to adopt certain measures for improving performance of the company, Board (BIFR) may direct any operating agency to prepare a scheme in respect of a sick industrial company

B.Com Ist Year Parallel Economy Long Short Question Answer Notes