Cabinet puts proposal to declare four firms as sick on hold

The cabinet has put the industry ministry"s proposal to give "sick industry" status to four firms on hold, stating that the firms do not meet the criteria.
The Ministry of Industry (MoI) a few weeks ago recommended to the government to give "sick industry" status to Birat Leather, Birat Shoes, Shree Nepal Boarders and Basulingi Private Limited.
“The cabinet declined to give "sick industry" status to those firms stating that they do not meet the criteria set in Industrial Act 1992,´ an official at the MoI said. “The cabinet has put the proposal on hold.”
The Industrial Act 1992 states that only the industries which have incurred loss for five consecutive years and are still in operation shall be given "sick industry" status.
“None of the recommended four industries are in operation,” the official added.
Confirming the development, Krishna Gyawali, secretary at the MoI said the cabinet has neither endorsed the proposal not has asked the ministry for further information about the firms. “I have briefed Minister for Industry Shankar Koirala on the exact situation of the four firms,” added Gyawali.
The government"s attempt to revive sick industries had failed in the past as well due to confusion over criteria.
“This time also the cabinet couldn"t take any decision on sick industries because of the criteria,” the official at MoI said.
According to the industry ministry, a total of 37 firms had applied at the Industrial Promotion Division (IPD) to get "sick industry" status. The ministry had formed a technical committee under the leadership of chief of the IPD to conduct study on those firms.
After conducting field study and due diligence auditing of all the firms, the committee had recommended to the ministry to forward the name of four firms to the cabinet.
The government had announced programs to provide relief package to sick industries through its Immediate Relief Program 2011/12. The MoI was assigned to identify actual number of sick industries upon submission of a report in 2011 by the Sick-industries Rehabilitation High Level Task Force (SIRHLTF) that laid emphasis on revival of sick industries.