K.Srinivas et al./ Elixir Mgmt. Arts 43 (2012) 7033-7039 7033 Introduction The incidence of industrial sickness has been growing in India during the last decade. Apart from the traditional industries like cotton textiles, jute and sugar, some other industries like engineering, Chemicals, rubber, cement, electrical and paper have also been affected by sickness. This paper deals with the problems and factors causing industrial sickness. During the last two decades, the incidence of industrial sickness has been growing rapidly and has been one of the persisting problems faced by the industrial sector of the country. The economic survey (1989-90) stated that the “substantial amount of loanable funds of the financial institutions is locked up in sick industrial units. The consequences of industrial sickness are more serious in a country where unemployment is a major problem and resources are scarce. The Sixth Plan commenting on the consequences of sickness mentions has said that “The phenomenon of industrial sickness not only tends to aggravate the problem of unemployment, but also render infrastructure capital investment and generally creates an adverse climate for further industrial growth. Objectives of the study: The objectives of the present study are to: 1.explore the causes of sickness in the cooperative sugar factories in Andhra Pradesh with reference to NCSF. 2.examine the revival / closure strategy of NCSF. Methodology: The present study is based on secondary data and is substantiated by discussions and interviews with the officials of NCSF(Nagarjuna Cooperative Sugar Factory Ltd). The data is analysed by using appropriate statistical tools like averages, trend analysis and percentages. In order to identify the forewarning indicators of industrial sickness in Cooperative sugar factories, L.C. Gupta model of four financial ratios such as (1) EBDIT \ NS (2) EBDIT \ GTA (3) OCF \ NS (4) OCF \ GTA are also applied. Sources of data : The data required for the study are collected from both primary and secondary sources. Primary sources consist of personal interviews and discussions with the concerned officials of the organization. The secondary data include annual reports of NCSF, and South Indian Sugar Mills Association (SISMA). Data is also collected from India Sugar Journal, The Indian sugar year book, Directorate of sugar (Government of Andhra Pradesh) and News Papers. Period of the study: The present study confined to 16 years period, Further, L.C. Gupta model is applied and analyzed for a period of 16 years starting from 1983-84 to 1999-2000 to make the analysis more meaningful. Causes of industrial sickness in Nagarjuna Cooperative Sugar Factory (NCSF) : There are number of causes, both internal and external, often operating in combination have been responsible for industrial sickness. The main causes include deficiencies in planning, management and marketing. The committee appointed by RBI in 1981 under the chairmanship of “Tiwari” attempt to draw more meaningful analysis of multi-dimensional causes of sickness. Usually, the causes of industrial sickness are often classified into internal and external. The internal causes include managerial factors, financial factors, technical factors and infrastractural factors. The external factors relate to government policies pertaining to production, distribution, prices, power, raw material transport communication. Among the factors listed above, the managerial and technical factors are said to be vital Tele: 91-9397970489 E-mail addresses: kamatam_srinivas@yahoo.com © 2012 Elixir All rights reserved ABSTRACT Industrial sickness is a universal phenomenon, over the years the problem of the industrial sickness has grown not only in developing countries but also in developed countries. In India, the problem of sickness in industries has become very acute. It adversely affected the health of the industrial sector in particular and the economy of the country in general. This paper covers the causes of sickness in the cooperative sugar factories in Andhra Pradesh with reference to NCSF and to examine the revival / closure strategy of NCSF. The present study is based on secondary data and is substantiated by discussions and interviews with the officials of NCSF. The data is analysed by using appropriate statistical tools like averages, trend analysis and percentages. In order to identify the forewarning indicators of industrial sickness in Cooperative sugar factories, L.C. Gupta model of four financial ratios such as (1) EBDIT \ NS (2) EBDIT \ GTA (3) OCF \ NS (4) OCF \ GTA are also applied. It concludes that the originating factor was management ineffectiveness. The management could not make the farmers understand the importance of survival of NCSF. The management could not convince the farmers to continue to produce sugarcane for their survival vis-à-vis the NCSF’s survival. EBT was negative for all the years but for 1998-99 it was positive due to interest waived. All these indications show that the organization was never sound, ultimately leading to sickness. © 2012 Elixir All rights reserved. Sickness causes in cooperative sugar factories in Andhra Pradesh – a case study K.Srinivas 1 and V.Apparao 2 1 KGR Institute of Technology and Management, Rampally, Keesara, Ranga Reddy, Hyderabad - 501 301. 2 Department of Commerce, Osmania University, Hyderabad-50007. ARTICLE INFO Article history: Received: 27 September 2011; Received in revised form: 19 February 2012; Accepted: 27 February 2012; Keywords Industrial sickness, NCSF, Management Ineffectiveness. Elixir Mgmt. Arts 43 (2012) 7033-7039 Management Arts Available online at www.elixirpublishers.com (Elixir International Journal)