Addressing a FICCI-ICICI seminar on `Challenge of competition: Restructuring corporate India' in Mumbai on Thursday, the Crisil chief enlisted a number of key problems and noted that the domestic industry is suffering from overcapacity, sluggish demand, uneconomic scale, import threat, inability to access capital market, no exit route for capital, higher debt/lower maturity and high cost structure.

There has been an increased reliance on debt and a continuos deterioration in the financial performance, he said. In 1997-98 the entire corporate sector has recorded a substantial drop in the profit. As a part of restructuring measures Ravimohan had suggested a series of measures including identifying competitive industries and channelise funds towards them.

The other measures as suggested by Ravimohan for restructuring include mergers andacquisitions, change in ownership, expansion and export incentives.

Emphasising the consolidation process of the domestic industries Ravimohan said that size of the company matters. According to him, there exists a high correlation between gross domestic product and number of large units in an economy as large size needed to weather difficult times.