Liquidity Management

The challenges faced by the public sector Iron and Steel enterprises in the Indian economy have multiplied manifold due to sweeping economic reforms that have taken place since 1991.Public sector iron & steel enterprises in India have been generally incurring losses because of under- utilization of production capacity. This situation has led to a slow and inadequate rate of growth in the country. If India has to make rapid economic progress, the public sector enterprises should earn sufficient surplus not only to finance their own expansion programme but also to contribute substantially to the growth of the economy as a whole. The present study points out that a very important reason for the losses or low level of profits of the public sector iron and steel enterprises in India was the ineffective and inefficient utilization of working capital and that, unless the situation is remedied, the public sector enterprises in India cannot be expected to generate adequate surplus.