Understanding Industrial Sickness

Unravel the complex realm of industrial sickness, a phenomenon that leads to significant losses and even shut down of industries. Discover its causes, impacts, and preventive measures while learning from real-world case studies.

Introduction to Industrial Sickness

Industrial sickness refers to a situation when an industry’s internal and external processes suffer to the extent that it faces significant losses and may be on the brink of closure. It’s a phenomenon characterized by low productivity, poor management systems, and unprofitable operations, resulting in a deterioration of the industry’s financial health. The excessive competition, poor planning, and lack of skilled labour are among the many factors contributing to industrial sickness.

Causes of Industrial Sickness

Industrial sickness can be traced back to multiple causes. Some of the primary ones include:

  • Inefficient Management: Poor planning, inappropriate decision-making, and lack of skillful workforce can contribute to industrial sickness.
  • Market Dynamics: High competition can render an industry incapable of staying afloat financially.
  • Technological Obsolescence: Industries that fail to keep up with technological advancements often find it hard to compete, leading to sickness.
  • Financial Challenges: The inability to repay loans, manage cash flows, or attract funds can severely affect an industry’s financial health.

Impacts of Industrial Sickness

Industrial sickness can lead to job losses, reduced productivity, and economic instability. It can dent the confidence of investors and decrease the overall growth of the economy. The Steel Authority of India, for instance, faced a severe crisis due to industrial sickness, leading to massive layoffs and financial losses in the 1990s.

Preventive Measures

It’s crucial to take appropriate preventive measures to address industrial sickness. These can include effective planning and monitoring, investing in human resources, embracing technological advancements, and robust financial management.


Industrial sickness is a grave concern that requires urgent attention. By understanding its causes and impacts, industries can take appropriate measures to prevent this phenomenon and ensure their financial sustainability.

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