 Dear learners, so this BPA program in your, there is a course on business environment and I shall take up unit 6 of your business environment course. This unit 6 is all about industrial sickness. You might have already studied the self-learning material, but in order to facilitate you to understand it better, what I will do, based on the 6 learning, based on the learning objectives of your unit on industrial sickness. I shall take up some learning objectives, the learning objectives and I shall try to cover the entire unit in the videos. So this is the part 1 of this video, I shall have 2 more videos. So part 1 of the video, I shall take up these 2 learning objectives. Number 1 is to define industrial sickness. What industrial sickness means, industrial sickness, we all fall sick is not it? So industries also fall sick and if adequate measures are not taken, that industrial sickness will prevail and ultimately the industry will have to close its doors. Then we shall discuss about the external reasons for industrial sickness, there are a number of reasons for industrial sickness. Why does industrial sickness happen, a number of reasons. In this video, this part 1, we shall discuss or share some of the external reasons for industrial sickness. First of all, let us try to see the aspect of industrial sickness, how can it be defined. Industrial sickness, you see the problem of industrial sickness does exist equally in both the developing and developed countries. It will be a wrong notion if we say that in the developed countries, industrial sickness does not exist. It is irrespective of the countries, whether it is developed country or whether it is a developing country or whether it is an emerging economy, whatsoever be the economic status, industrial sickness exists everywhere. There is a tendency, if adequate measures are not taken beforehand, the industries fall sick, be it small scale industries, be it medium industries, be it large scale industries, there is a tendency that if not adequate measures are taken, it will fall sick and this is applicable to any kind of economy. Then managing the problem helps in achieving higher growth and maintaining adequate level of employment. If the industries are not allowed to be sick, then what happens? That the growth momentum will be sustained, there will be growth and when there will be industrial growth, the employment that will be absorbed in the industrial enterprises that also will be there, there will not be any unemployment, the persons who are employed in the industry they will remain employed. So this will help in managing the problem of ensuring higher growth in the industries at the same time curving the unemployment problem. And based on all these in emerging economies, developing economies, we have to see that what could be the reasons and what is its extent. So in terms of its extent, how can we define, there is this CICA, CICA, the SIC industrial company special provision act, 1985. It defines a CIC industrial company as an industrial company, means it has to be registered industrial company and that to not for less than 7 years, if it becomes sick within 7 years of its formation that will not be right as far as this per view of this act. So the industries which are more than registered more than 7 years showing accumulated losses not just one time loss, accumulated losses over the years and that is equal to or exceeding its net worth at the end of any financial year. So it has to be not just accumulated loss, a small amount of loss may not be right, be justifiable enough to call it as a sick industry and then suffering cash losses also during that financial year and immediately preceding year. So that has to be substantial in at least 2 years. Cash loss indicates completed loss without making provision for depreciation because the fixed machinery etcetera that we shall procure, that has got a depreciation value and then the statement of accounts that is reflected. So this cash loss indicates completed loss without making provision for depreciation. So this is the definition of industrial sickness as far as SICA. So this my dear learners you have to remember it. Now that is the definition but before that definition takes place we need to be clear about the warning signals of industrial sickness. What are the signals that might indicate that the industry might fall sick? One is shortage of liquid funds to meet the short term financial obligations of creditors. The creditors supply raw materials, they supply machinery, they supply equipment and if we are not in a position to pay their dues that is an indicator that we have not been able to meet the requirements of the creditors or suppose we are not able to pay the taxes, statutory obligations. Growth of excessive inventories, the inventories are piling up, we have not been able to sell the inventories that is another indication. On payment of interest on term loans we have had credit from the banks, we have had loans from the banks but we have not been able to pay the installments. Under utilization of capacity we have got say 80,000 tons of capacity but we have not been able to utilize that let us say suppose 60,000 tons remaining unutilized and less return on investment compared with the prevailing. Industry there is an industrial norms and we are earning less than that. So these are the signals of industrial sickness, shortage of liquid funds, non-payment of interest, they have no inability to pay taxes, lesser ROI compared to our competitors. So some of the external causes of industrial sickness say power shortage because many times the industries do not produce power themselves. They have to depend on the power supply of the electricity or boats or electricity supplying agencies but many times there is a shortage of supply and even if shortage of supply is not there, there is a quality of electricity, there is some problems, there is a fluctuation of voltage, etcetera. So that creates problems for the functioning of the industries. Sometimes what happens is scarcity of raw materials and inputs including erratic supply. Suppose you are in a paper industry, bamboos are in short supply. So the paper industry will not be able to flourish, is not it? So scarcity of raw materials and inputs including erratic supply, suppose supply is there but supply is not regular, supply is highly erratic, rise and fall is there. That is also a cause of industrial sickness. National calamities, floods could be there, earthquakes could be there, cyclones could be there, any kinds of digesters, these digesters also cause sickness in the industries. So national calamities, these are all beyond control of the individual entrepreneurs and frequent change in government policies. Suppose GST has come, along with GST suppose they are favorable things are there. Suppose with some other, suppose the excise duty or say import duties, right, the different policies, suppose the industry has not been able to adapt itself, so there is another change. So that might lead to the underperformance of an industrial unit. So these are some of the external causes of industrial sickness, there could be some other causes also. We shall discuss some of these in some of the later unit, right, later videos, just say the other two parts of the video with this, right, we have covered the first part of your industrial, this sickness unit, thank you.