Page 220 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Unit 14: Sickness in Small Business Enterprises

16. Persistent disagreement or disharmony among the directors or partners. Notes
17. Window dressing of accounts by the units.
18. Low morality on the part of the employees.
19. Laxity in payments to suppliers, employees, banks etc.

20. Undue delay in annual accounts.
21. Attempts to route transactions through other banks by the borrowing unit.
22. Industry being gripped by recessionary trends.
23. Low profile market reports.

24. Inflationary trends in the mode of stock valuation not warranted by any economic
considerations.
These are some of the signals that were very profoundly obvious in the sick units of UP before
they were declared sick. Had the management been sensitive towards the signals, a majority of
the units could be saved. Thus, this discussion would remain ineffective if the sources of these
signals are not laid down for future reference of upcoming small enterprises.

14.3.2 Cure of Sickness

Rehabilitation of a sick unit comes under process only after the viability study of the concerned
small unit recommends for its revival along with the suggested reliefs or packages or any other
way out. Sickness needs to be tackled with a great sense of urgency of commitment. Whatever
the causes, the problem of rehabilitation calls for immediate attention of all concerned. Emphasis
in this regard should be on measures of a long-term nature rather than on palliatives. There is
indeed a pressing need to improve the skill base of small firms so as to upgrade the level of
technical and general education of workers. Apart from improvement of theoretical instruction,
efforts are required to upgrade practical experience in collaboration with large industry, including
public sector undertakings.
Industrial sickness is a part of the process of industrialization. It leads to unemployment, blockage
of capital, loss of state revenue and non-utilization of assets. Hence it is necessary to take proper
steps in order to rehabilitate the sick industries. As such govt. is concerned about this and would
take the following steps to stem sickness and revive sick industries.

Small Sector

(i) State Level Committee: For the rehabilitation of small industry a State Level Committee
under the chairmanship of Director of Industries will be constituted. Its members comprise
representatives from the banks, financial institutions, Reserve Bank of India, Industries
Association, experts and Government.

(ii) The above committee would be empowered with necessary statutory powers in order to
rehabilitate the sick industry so that approved rehabilitation package may be implemented
effectively.

(iii) The guidelines of the Reserve Bank of India / IDBI / SIDBI would be relied upon to
identify sickness in sick and small units. Appropriate rehabilitation package would be
approved for their rehabilitation.
(iv) The sick industries being revived will not require sickness certificate on an annual basis,
instead the revival package shall specify the period of revival of sick units.

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