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Industrial Sickness in the State
With 'Industries' being a subject on the Union List, the legislative frame-work within which the State Government has been required to design initiatives in this field are mainly 'The Companies Act 1956', 'The Sick Industrial Companies (Special Provisions) Act 1985' and ‘The Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002’. All these statutes are Central legislation.
All these legislations have given priority to the secured creditors mainly Banks and Financial Institutions attached to any sick/weak industrial units in recovering their secured debt by inter alia, seeking winding-up of the Company or by taking possession of the secured assets of the borrower Company with right to transfer the same by way of lease, assignment or sale.

Whenever, any industrial unit turns weak or sick and makes any default in repayment of its secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as ‘non-performing asset’, they fail to get any financial support from the Banks/Financial Institutions concerned. This puts the sick units into threats of permanent closure.

Reasons for sickness
It is a fact that many industries in the large and medium sector were first established in West Bengal. But their failure to modernize and diversify along with fast technological obsolescence and changing market conditions has led to industrial sickness. In this connection, it is important to note that sickness in industries has been a countrywide problem.
Activities of the Department
Notwithstanding this limitation, the efforts of State Government have been to evolve a coherent policy for the benefit of all concerned. To discharge its responsibilities, the Department is required to undertake, interalia, the following activities towards this objective during the period:
Preliminary enquiry in respect of sickness and closure of a unit;

To facilitate the formulation of proposals for rehabilitation and reconstruction of sick and closed industrial units with reference also to direction of the Board for Industrial & Financial Reconstruction (BIFR), under SICA;

To deal with civil rules and other cases arising at various Counts of law viz. Debt Recovery Tribunal (DRT), Hon'ble High Court/Supreme Court in connection with the implementation of various industrial rehabilitation schemes; arrange the appointment of Government Counsel to represent the interest of the State and keep a watch on developments in each case;
To consider proposals under various Incentive Schemes of the State Government announced from time to time with a view to provide support to the revival/rehabilitation of eligible 'closed', 'sick' or 'weak' industrial units;
To encourage measures for the operation of closed/sick industrial units by workers through Co-operative Societies, if feasible and where promoters are unwilling to make investments in their revival/rehabilitation effort.
This department had introduced a Scheme ‘West Bengal Industrial Renewal Scheme 2001’ (WBIRS) w.e.f. 1st January 2001 and that has been extended up to 31st December 2007 with certain modifications. This is applicable to all cases proposing the rehabilitation or revival of 'closed', 'sick' or 'weak' industrial units and also to the expansion in respect of 'closed', 'sick' or 'weak' units if forming a part of such rehabilitation or revival proposals as accepted by State Government. Such units can be in the private sector, co-operative sector, joint sector as also companies/undertakings owned or managed by the State or Central Government, in the large/medium sector. Cases of revival/rehabilitation of manufacturing industrial units in the small-scale sector as selected in consultation with the Micro & SSE & Textile (erstwhile Collage & Small Scale Industries) Department can also be considered for support under this Scheme, if otherwise eligible.
To be eligible for consideration, proposals for the comprehensive and long-term revival/rehabilitation of 'closed', 'sick' or 'weak' industrial units are required to be formulated and submitted with the support of Financial Institutions/Banks having interest and the employees of the industrial unit whose revival/rehabilitation is proposed.
Support measures
According to the modified notification by the State Government, the incentives/support measures available to sick/weak/closed industrial units are at present limited to-
Remission of stamp duty and registration fee up to 50%, if a closed unit be purchased by another entrepreneur;

Re-scheduling of arrear sales tax dues to long-term soft loans;

Waiver of Electricity Duty up to a period of five years;
Limited window strictly according to the need and as a special consideration for disposal of surplus land assets, to generate resources for investment in revival/rehabilitation efforts.
Cases of ‘SICK’ industrial units as on 31st March 2009
During the period under review, this Department has interfaced in the cases of industrial 'sickness' of around 349 units registered with BIFR from this State. This includes 25 Central undertakings and remaining 324 units relate to private sector. [However, no State Public Sector undertaking has so far been referred to BIFR from this State, as State Government has taken the task of their revival of its own, as matter of policy.]
Central Sector

Out of 25 units of Central sector, implementation of revival packages has been successfully completed in 4 units under the provisions of the revival packages approved by BIFR and these units have revived themselves. These are IISCO, Braithwaite, Jessop and Becco-Lawrie;

Remaining 7 units are at various stages of implementation of their respective revival packages approved by BIFR. The units of Bengal Chemical, Andrew Yule and Eastern Coalfields are indicating successful revival.
Revival packages are in process of finalization in 2 cases viz. Hindustan Cables and Tyre Corporation;
12 units have however, been recommended by BIFR for winding-up in absence of any support-worthy revival proposal from any corner;
An important development is that the closed unit of M/s National Instruments, a fully-owned CPSU has recently been handed over to Jadavpur University by Government of India after prolonged persuasions by GOWB.
Some of the closed/non-operating units have been decided by GOI for revival; These include both units of Hindustan Fertilizer.
Strategic JV partners are being identified for reopening and revival of closed MAMC unit at Durgapur and some jute mills of National Jute having major activities in this State.
Efforts have been taken by GOWB in consultation with GOI so that some other closed CPSUs could be revived with permission of the Hon’ble High Court.
Private Sector
Out of 324 units in private sector, respective revival schemes for 69 units have been approved by BIFR so far.
Out of these, 27 units have so far been successfully revived and came out from BIFR under the provisions of SICA 1985. cases of ABB ABL (now Alstom Power), Gramaphone Company (now Saregama), Century Extrusion, Khaitan Agro, Dalhousi Jute, Champdani Jute, Sri Badrinarayan Steel etc.
Implementation of respective revival schemes of remaining 42 units is either in progress or under revision as their original BIFR-schemes has been decided by BIFR as ‘failed’. Meanwhile, the units like Dunlop, Air Conditioning Corporation and GKW have come out of BIFR upon receipt of verdicts of Hon’ble Courts of Laws and AAIFR in respective cases, although revival in respect of their units located in the State have not yet been completed;
Admissible relief/concessions for some deserving/eligible units having fully tied-up revival schemes duly approved by BIFR, for which State Government has already granted “in principle” clearance are presently under consideration by the Finance Department. These units are presently being rehabilitated successfully. e.g. Andrew Yule, (a CPSE), Duroplyprene, Versatile Wires, Gourishankar Jute Mills, Nuddea Mills and Deepak Industries.
Various options towards revival measures in respect of 113 units are under consideration of BIFR.
78 units have been decided by BIFR for final closure in absence of any support-worthy revival proposal. Their liquidation proceedings are either stuck in appeals before the Appellate Authorities or underway before the Hon’ble High Court.
Out of these liquidated Companies, assets of 7 units have been purchased by prospective promoters for further industrial activities. For example, India Machinery, Eastern Explosive, Recon Castings and Hindustan Pilkingston etc.
State Government is in search of new investors out of them a few have evinced interests in taking over some closed units upon seeking permission from the Hon’ble High Court.
Cases of 26 units have been rejected by BIFR as non-maintainable under SICA.
Remaining cases of 38 units are not under the purview of this State as their works are outside the State. References have been made as they are originally incorporated in West Bengal.
Some success cases of revival
An important development is that the closed unit of M/s National Instruments, a fully-owned CPSU has recently been handed over to Jadavpur University by Government of India after prolonged persuasions by GOWB.
IISCO Burnpur works
BIFR-sanctioned revival scheme is in successful progress of implementation. Govt. of India/Ministry of Steel has decided for merger of IISCO with SAIL. A modernization plan of Rs 9600 crore has already been approved by GOI and is being implemented. GOWB committed monetary sacrifices of around Rs 500 crore towards various reliefs for IISCO-revival.
Bengal Chemicals & Pharmaceuticals
This pioneering pharmaceutical company has been rehabilitated successfully with GOI-funds through implementation of BIFR-sanctioned scheme. GOI/MoC&F has since sanctioned around Rs 400 crore towards implementation of its modernization plan as well as restructuring of GOI-loans. State Government shared its revival efforts initiated by GOI and granted a soft loan of Rs 2.25 crore to enable the said sick unit to settle its past dues of sales tax.
Bengal Immunity Ltd.
BIFR-sanctioned scheme has failed in respect of this CPSU and it was decided to wind-up the unit. On further persuasion, Govt. of India/Ministry of Chemicals & Fertilizers has reconsidered to run this closed unit for revival through a JV partner since selected.
B. JV-Company
Jessop & Company
This JV-company presently having minority share participation of GOI after disinvestments has been successfully revived and ceased to be sick with substantial financial assistance
C. Private
Calcutta Chemicals
This pioneering cosmetic and home-care items manufacturing unit has been successfully revived by its new management through implementation of a revival scheme approved by BIFR with financial support of the State Government.
Both of its closed units located at Beliaghata and Agarpara have been reopened by its new management and are being rehabilitated successfully with the support of the State Government.
Century Extrusions
This aluminium-extrusion unit at Kharagpur Industrial Growth Centre has successfully implemented its revival package with financial support from State Government in the form of soft loan and has revived itself.
Gramaphone Company of India Ltd. (now, Saregama)
This pioneering CD/Music cassette manufacturing works turned sick due to product obsolescence but subsequently revived itself through implementation of a BIFR-approved revival scheme with the support of State Government.
India Foils Ltd.
State Government has since identified one new entrepreneur group M/s ESS DEE Aluminium, Mumbai, which has taken over the units of India Foils Ltd.. While it’s Kamarhati unit has put into regular production with proposed expansion programme, the Hoera unit has since been reopened. Necessary repairs/renewal of this closed unit has since been started and its new management expects early resumption of production activities.
Bengal Salts Company.
The unutilized land of this closed unit earlier engaged in salt-manufacturing has since been resumed and handed over to Power Department to start a new project of ‘Wind Firm’ for production of 50 MW of electricity for distribution of power in the locally through WBSEDCL, a State-owned power supply agency.
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