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Role of BIFR

Monirba {Allahabad university} Supported by – Manish kanojia (MBA III sem} Presenter : Ritesh Pal MBA (III rd sem.)

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Agenda

Introduction

Objectives

Process flow chart of BIFR’s working

Functions of operating agency under SICA

BIFR – organizational structure

Facts and Figures

Constraints faced by BIFR

Suggestions to make BIFR more effective

Conclusion

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Introduction

In the wake of sickness in the country’s industrial climate prevailing in the eighties, the Government of India set up in 1981, a Committee of Experts under the Chairmanship of Shri T.Tiwari to examine the matter and recommend suitable remedies therefore. Based on the recommendations of the Committee, the Government of India enacted a special legislation namely, the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) commonly known as the SICA

The Board of experts named the Board for Industrial and Financial Reconstruction (BIFR) was set up in January, 1987 and functional with effect from 15th May 1987

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Objectives

To evaluate the techno-economic viability of sick industrial companies with a view to either rehabilitating them or to closing them down

To stop continued drain of public and private resources

To protect employment as far as practicable

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Process flow chart of BIFR’s working

Enquiry▼

Net worth positive through its own efforts▼

It is in public interest to rehabilitate▼

Preparation of techno-economic viability report ▼

Possibilities of merger or change of mgt.▼

BIFR draws scheme of rehabilitation▼

Consensus of parties called upon ▼

Fresh funds are released▼

Advertisement inviting comments and objections▼

Scheme is sanctioned by BIFR

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Functions of operating agency under SICA

Conducting inquiry

Preparation of scheme

Recommendation to BIFR

Implementation of scheme

Appointment of liquidator by high court

To prepare list of assets, liabilities, shareholders

- All books of accounts, registers, maps, plants, records, documents of title or ownership of property

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Facts & Figures

Year wise performance

List of operating agencies

Registration of PSUs

No. of cases registered (state wise)

No. of cases registered (industry wise)

Filing of reference

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Constraints and Problems

Delay in submission of reports by operating agencies

Lack of prompt and final response in matters of relief and concessions

Reluctance on the part of banks and FIs

Prolonged delay from promoters side

Appeals registered with the AAIFR against BIFR

Several appeals against BIFR in High Courts

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Suggestions to make BIFR more effective

One time settlement of existing dues

Substituting weak promoters by strong and resourceful promoters

Concessional interest rates where time resorted is less

Sale of units by BIFR instead of passing winding orders to be implemented by High Courts

Restriction over addition of new units unless the earlier ones are either closed after due scrutiny by BIFR or Rehabilitated

Concurrence of majority of workers to be availed

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Once again, it will require lot of expertise and exposure to plan and extend counseling on all these areas. For this pooling of resources will be necessary. A tall order indeed, but there seems to be no shortcut.

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References:

Entrepreneurship and Small Business Management by M.B. Shukla

www.bifr.in

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