🏭 Sickness in Small Industries (MSMEs)

⚖️ Definition under SICA, 1985

Under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), a “Sick Industrial Company” is defined as:

“An industrial company (being a company registered for not less than five years) which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.”

Sickness in small industries (or MSMEs) in India is commonly attributed to several structural and operational challenges. Let’s evaluate each statement:

📉 I. Inability to cope up with large market size

Many small industries struggle to scale operations and serve larger markets due to limitations in capital, infrastructure, and marketing capabilities.

🧪 II. Lack of innovation and technology focus

This is a core reason for sickness. Many MSMEs operate with outdated technology, reducing their competitiveness and productivity.

🌍 III. Direct and indirect competition from foreign players

With globalization and trade liberalization, MSMEs face stiff competition from large multinational companies offering better quality and pricing.