the causes of sickness are both internal and external. the major causes are limited financial resources, lack of organisational, financial and management skills and expertise, diversion of funds, diversification / expansion before stabilisation, non - availability of power supply shortage of raw materials, marketing difficulties, delayed and inadequate credit, globalisation and liberalisation of the economy, obsolete technology, inadequate infrastructure, etc. with a view to ensuring that potentially viable sick ssi units are provided with the timely and adequate assistance by all agencies concerned, there are state level inter institutional committees ( sliic ) constituted in each state involving state government, financial institutions, commercial banks and sidbi. ssi associations are also invited to the meetings of this committee. a sub - committee of sliic has also been set up in each state to examine the individual cases referred to it for rehabilitation. to address the incidence of growing sickness in the sector rbi has recently issued a complete set of revised guidelines drawn up on the basis of the recommendations of a working group constituted by it for the purpose. policy initiatives the indian industry remained within an inward oriented policy framework up to the 1990s. with globalisation, liberalization, financial and real sector reforms, the country adopted an outward looking approach. at present, both the industrial sector in general and ssi sector in particular are exposed to international competitive environment. however, the most significant aspect is that india has evolved a sound institutional set up for financing of the ssi sector. new industrial policy was announced as part of the structural reforms in 1991, which eliminated various controls on the industrial sector, provided a greater role for the private sector and encouraged inflow of foreign investment and technology, but also contained specific initiatives for the development of the ssi sector. the pace of de - reservation of ssi items, needs to be accelerated so as to ensure that size does not remain a constraint to higher production, cost - efficiency and technological upgradation. the case for de - reservation of the ssi sector becomes even stronger in the light of the experience of south - east asian economies which indicates that ( a ) their export basket transformed from labour - intensive and relatively low technology products ( textiles, clothing, shoes, toys, etc ) in the 1980s to higher - technology consumer goods and capital - intensive goods ( capital goods and petrochemicals ) in the 1990s and ( b ) production of such consumer goods could be achieved by large - scale final assembly operations coupled with copious out - sourcing to

scale buyers to the ssi units adversely affected the recycling of funds and business operation of ssi units. though the government has enacted the delayed payments act, many of the ssi units are reluctant to pursue cases against major buyers. the act since amended in 1998 has made it compulsory that the payment of ssi suppliers should be made within 120 days. to improve the plight of ssi entrepreneurs due to delayed payments, steps for strengthening and popularizing factoring services, without recourse to the ssi suppliers may have to be thought of seriously. the banks have also been advised about sub - allotting overall limits to the large borrowers specifically for meeting the payment obligations in respect of purchases from ssi. it is expected that these measures will improve the situation of delayed payments. marketing marketing remains the most critical area for the ssi sector as some of the units are very small and so is their output individually. adopting consortium approach could best solve the marketing problems of the ssi sector. besides finance for marketing related activities, dissemination of requisite information on demand pattern, futuristic trend, etc. could be made available by the development institutions / ssi associations, etc. challenges emanating from the wto to face the challenges emanating from the wto agreement, ssi units irrespective of their size need technology up - gradation and modernisation. an awareness about the implications of wto agreement has to be created. the preparation for competitiveness needs to be done by the government as well as entrepreneurs and the corporate. the government should provide good infrastructure and create level playing field for the industry. considering the fund constraints with ssi sector government has introduced the credit linked capital subsidy scheme for technology up gradation of small scale industries under which 12 % back ended capital subsidy would be admissible on the loans advanced to the ssis by banks / financial institutions for technology up gradation in certain select sectors. sickness growing incidence of sickness of ssis is yet another area of concern. when the sickness prolongs it leads to the closure of units and unemployment. lately mortality of the ssi units has been showing increasing trend. this has wider implications including locking of funds of the lending institutions, loss of scarce material resources and loss of employment. the number of sick ssi units as a percentage to the total number of ssi units is around 10. the number of units identified as potentially viable as a percentage to total sick ssi units is around 8.