The press release also said that a price hike amid a pandemic could likely cause the industries to shut down.
Coimbatore: Coimbatore District Small Industries Association has requested the Central government to take a major policy decision to control the raw material prices on a war footing basis.
'CODISSIA' President, M.V.Ramesh Babu in a press release has said, "In the current situation of increase of COVID-19 pandemic, which is causing an impact on all Industries, this increase in raw materials prices is posing a cascading effect on the MSMEs since the majority of the raw materials are being purchased by the MSMEs.
The price of raw materials especially steel and other allied materials such as Coke, Pig Iron, Scrap, HR Sheet, CR Sheet, Copper, Aluminium, Kraft Paper, Plastics etc., continues to rise steadily which is affecting the MSMEs very badly. The livelihood of millions of workers will be an imminent threat if the situation persists."
The statement said, "There is no control over the fixation of raw material prices at present and there is an increasing trend of change in raw material prices. On account of this price increase, MSMEs who are catering to all DPSUs, Government Departments, by getting tenders on an L1 basis are facing huge losses. The prices of Steel and other allied Foundry raw materials have increased by 70%."
They said that if this situation continues, all the MSME industries will get affected which may lead to the closure of many industries. "From 31st March 2021 to 2nd April 2021, there is a price increase of steel to Rs. 6,000/- per ton, still the market shows a continuous increase in prices of raw materials and there may be another increase of Rs.5000/- per ton in the days to come," the statement read.
Therefore, the CODISSIA requests the Government of India:
to fix MRP price for raw materials on a monthly basis,
to give supply preference to MSMEs,
to clampdown iron ore and steel exports,
to charge NIL duty for scrap import forever,
to charge NIL duty for steel for six months,
to ensure availability of raw materials as per demand.
They also request the Government to consider reducing the raw material prices on a war footing basis. CODISSIA also requests for reopening the Sail Yard in Coimbatore and reintroducing the system of allocation of raw materials to MSMEs at the subsidized price as was done earlier.
The statement also said, "Due to the heavy increase in prices of raw materials, MSMEs are facing cancellation of orders, the uncertainty of consumption in the market and declining exports etc. MSMEs have already utilized all their working capital and found a heavy cash crunch for running their business.We request the Government to sanction additional 20% credit to tide over the crisis."
The CODISSIA is representing this to the Prime Minister, Steel Minister, MSME Minister and Minister for Commerce and Industry, Government of India and requested them to take a major policy decision to control the raw material prices on a war footing basis.