Diagnoses

Abstract

Industrial sickness, especially in the small scale industries, has been growing at an alarming rate. Macro level analysts of the phenomenon have identified several key factors that contribute to industrial sickness. However, for a deeper understanding of the interplay of factors underlying industrial sickness, analysis at the micro level is required. The Rayalaseema Biscuits Company case presents 5-everal unique features which lend themselves to convergent as well as divergent lines of diagnoses by experts.

Mohanty points out that the RBC was doomed to failure owing to poor project planning, inexperience and incompetence of the promoters, and narrowness of perception of the banker's own role (i.e. pumping in more and more money) in reviving sick units.

Venkiteswaran echoes many of the views expressed by Mohanty and suggests various timely remedial actions which could have revived RBC.

Pandey while focussing on incompetence and inexperience of the promoters also suspects them to be corrupt. According to Singh, RBC is a typical case of poor and inappropriate credit appraisal. In addition, he urges bankers to acquire greater knowhow in merchant banking in order to help small scale units such as RBC succeed.