On Wednesday, After deliberations conducted by the ‘All India Council of Association’ of MSMEs on Wednesday on the problems that are being faced by industries in specific reference to the rapid escalation in the cost of steel and other inputs of construction, ‘Industry associations that are representing the MSME sector’ are expecting a positive response from the Central government.
The AICA represents nearly 170 MSME associations that cover nearly more than two lakh industrial units across the country. “It made a representation to the Central government that seeks immediate intervention for the sustenance of the sector and has also redirected the copies to the Union Ministers of Finance and Corporate Affairs, MSME, Steel, Commerce and Industry, and Coal and Mines.”
In the backdrop of many industries becoming sick, the Following organisations participated in the discussion and are seeking speedy solutions for the survival of MSME. “Representatives of Tiruchi District Tiny and Small Scale Industries Association, Tiruvarur District Small and Tiny Industries Association, BHEL Small Industries’ Association, Nagapattinam District Small and Tiny Industries Association,and Valavandankottai Industrial Manufacturers’ Association”
Recently, the cost of steel during the lockdown period has escalated to the extent of 60% to 70%. Consequently, it is threatening the sustainability of manufacturing units, said R. Ilango, president of Tiruchi District Tiny and Small Scale Industries’ Association.
BHELSIA, through a forum for raw materials, has conveyed to the government the difficulties that are being faced by the fabrication sector said BHELSIA president Rajappa Rajkumar.
As per V. Ramachandran, president of Nagapattinam District, Small and Tiny Industries’ Association, the unwillingness of banks to implement an interest subvention scheme of the Reserve Bank of India was deplorable.
In the representation to the Prime Minister, AICA has pinpointed out that
The sharp hike in the prices of the raw materials across all sectors, despite the fact of low consumption and the subsequent drop in production by MSMEs (Micro, Smal, and Medium Enterprises), has finally led to the loss of employment and depreciation in the value of the rupee.
“It is obvious that there is a cartel created by steel manufacturers, which include private and public sector undertakings. Steel is an essential commodity for the overall development of the country and exports should be as per availability of surplus. Steel and other base material manufacturers are declaring 10 to 20 times higher profit whereas all the MSMEs are on the verge of extinction. This clearly shows that the corporate and PSU commodity companies are profiting at the expense of MSMEs, said the AICA.”
Further, It has questioned the benchmark for fixation of prices in the steel industry and proposed to fix prices based on the international market prices rather than the demand and supply situation prevailing in the country.
The possible solutions suggested by AICA include directing PSUs to accept fresh quote, GST-based funding, protection against escalation for some period, derivation of the formula for the price escalation, revisit of all orders of PSUs to MSMEs, allowing import based on cost and quality and so on
The AICA is seeking an appointment with Prime Minister Narendra Modi to pinpoint the worse situation of MSMEs and cautioned the government that the escalating rise in prices of raw materials will only discourage entrepreneurship and ultimately lead to the failure of the government’s objective of Atmanirbhar Bharat.
