The major delegates of the MSME industries in Coimbatore met the Union Minister of MSME, Narayan Tatu Ranes, and put forth demands in connection with the raw material price hike and the need for immediate measures to curb the hike.
Coimbatore: Industry heads from Coimbatore met the Union Minister of MSMEs in Delhi.
A delegation of Coimbatore Industry Association Heads met Narayan Tatu Ranes, Minister of MSME, Government of India at his office and submit Representation regarding following raw material issues to the Hon'ble Minister on 27.04.2022 :
● MSME sector contributes 48% of Indian export and the entire export revenue comes from value added finished end product and country receives higher foreign exchange, but while exporting at raw material stage, the foreign exchange revenue to the country will be much lesser. It was found that steel exports are made at much cheaper prices as compared to the domestic prices.
This causes a huge set back to the Indian MSMEs in exporting our end product. The countries importing Indian steel at cheaper prices are competing with Indian end products and our MSMEs are being defeated in the global market. This will have a negative impact on MSMEs and in the long run to the nations' foreign exchange revenue.
They requested for the minimum export price to be fixed, for the benefit of promoting end product export and saving MSMEs, which should be at least 10% higher than our domestic price.
● Immediate ban on export of all raw materials to ease domestic supply and check price rise and to implement NIL rate of Import Duty and allowing imports of raw materials to India ll the Raw Material crisis is over, for smooth supply of raw materials, which are the primary source of manufacturing activity.
● The Government should not insist on ISI Mark for all the raw materials imported from other countries.
● Indian MSMEs are all now very successful in global market only because of the quality conscious materials used and operations, but now during the past few years since the high quality electrical grade steel are being exported predominantly and those supplies were given to MSME Sector, this has created a huge setback for the end product exports and even for the domestic requirements MSMEs were left with no other option other than using low grade materials. This will impact on the overall quality of Make in India products and also affect an energy efficiency in the long run.
● Alloy steel and electrical grade steel sheet meant for manufacturing should be given directly to MSMEs without interference of Traders. Further, steel being the essential commodity for manufacturing and the frequent price fluctuation will affect the Make in India concept, we request that the steel should be removed from MCX Index to avoid trading manipulations.
● Raw materials are being sold at premium rates and a request was made to the government to fix the MRP price as the selling rate for all raw materials, to have a constant price at least for six months. Large Industries and PSUs producing all raw materials should focus on MSMEs and supply on priority basis and should allocate at least 50% of their production for MSMEs.
● Protection against escalation for some period: Easy mechanism to hedge raw materials for all MSMEs, NSIC should act as a consolidation agency. They should be in a position to consolidate and hedge overall raw material quantity in the marketplace. This kind of hedging should be possible for a period of one year (as rate contract extends for a year) NSIC should make bulk bookings of raw materials at a price with the option of taking deliveries within 12 months as fixed.
Public Sector Enterprises must be instructed to accept cancellation of orders from MSMEs with no penalty / black listing as increase in raw material price is a Force Majeure event outside the control of the MSMEs. Further, all MSMEs under government contract and suppliers to PSU, should be allowed to revise their price with fresh quotes. For all finalised government and PSU supplies, MSMEs should be allowed to invoke price escalation clause / Provision for re-quote.
● During the last two years, the raw material manufacturing corporates have enjoyed exorbitant profit margins and during the same period, MSMEs have suffered a setback and even more than 30% have become inoperative. To avoid the same and ensure a balanced growth at all levels, a price monitoring committee may be formulated including representation from the MSME sector.
● SAIL yard in Coimbatore was closed in the year 2015 for want of construction of railway over bridge. The construction has already been completed in the year 2017 and the SAIL yard in Coimbatore has to be reopened immediately.
● Reintroduce the system of allocation of raw materials to MSMEs at subsidized price as was done earlier, via SAIL, VIZAG, NSIC, SIDCO and other Nodal Government Distribution Systems.
We have personally requested the Hon'ble Minister of MSME to take some concrete steps to control the prices of all raw materials and to SAVE THE MSMEs from this difficult situation and for the survival of MSMEs.
The industry heads also wanted to meet Ram Chandra Prasad Singh, Minister of Steel and Piyush Goyal, Minister of Commerce and Industry, Government of India. finally have submitted their Representation to them.
They met Dr. L. Murugan, Minister of State in the Ministry of Fisheries, Animal Husbandry and Dairying and Ministry of Information and Broadcasting and stated that the Ministers take necessary action to meet their request.