Sickness in Indian Industry
THE incidence of industrial sickness has been growing in India during the last decade not only among the traditional industries like cotton textiles, jute and sugar but also among industries like engineering, chemicals, rubber and cement. On the basis of information collected by the Reserve Bank of India (RBI) the total number of large and medium-sized sick units with a bank credit of over Rs 1 crore each was 289 at the end of December 1977, locking up a total bank credit of Rs 858.45 crores. This does not include sick units taken over by the National Textile Corporation. This is not the whole of the story. Besides this, in the small scale sector 8,000 units are estimated to be sick, locking up bank finances to the tune of Rs 200 crores.
An analysis of industry-wise bjreak-up of sick units reveals that 73 texile] units, accounting for nearly Rs 260 crores in out-standings, form the major group, followed by engineering units which cover 76 units locking up Rs 226 crores of bank credit. Chemicals, jute, sugar and iron and steel are the other important industries in which 94 units have been declared as sick, accounting for nearly Rs 257 crores of bank credit. Of the total locked-up bank finances, engineering, jute and cotton textiles account for nearly 66 percent of total outstandings (Table I).
A state-wise break-up of industrial units (Table II) reveals that of the total of 289 units, 234 units are located in five states-West Bengal, Maharashtra, Tamil Nadu, Gujarat and Uttar Pradesh. These 234 units account for Rs 718 crores of locked-up bank credit. In other words, nearly 81 percent of the sick units in five states accounts for 84 percent of the locked-up bank credit. Maharashtra and West Bengal show a high concentration of 134 units involving a bank credit of Rs 438 crores. This is due to the concentration of engineering, textile and jute industries in these two states.