COIMBATORE: At least 170 associations of micro, small and medium enterprises (MSMEs) in the country have come together to seek the Union government’s immediate intervention in controlling the price hike of raw materials.
They petitioned the Centre on Wednesday.
In a press note, the All India Council of Association of MSMEs (AICA) said there was a steep rise in the price of raw materials, especially that of steel and pig iron, despite their low consumption and significant drop in the production during the lockdown.
According to AICA, the price of mild steel plate has gone up by 82.22%, aluminium alloy by 94.34%, copper by 109.86%, pig iron by 50%, MS scrap by 48.15% and PVC pipe by 47.44%, since April 2020.
AICA has more than two lakh MSMEs as members.
The association said the manufacturers of steel and other base materials were logging 10 to 20 times higher profit, while the MSMEs were on the verge of extinction.
It said the steel manufacturers were not fixing the price based on the demand and supply situation in the country, but based on the international market prices.
Because of the price rise, AICA said, the MSMEs could not execute orders at a lower price and they were facing uncertainty of getting blacklisted by the public sector undertakings (PSUs) and large corporate companies, if they could not supply the products as per the agreement.
The association members also demanded the Union government to take necessary steps to bring an easy mechanism to hedge steels for the MSMEs and provide the National Small Industries Corporation (NSIC) powers to consolidate and hedge overall steel quantity in the market.
“The Steel Authority of India Limited (SAIL) and steel makers should publicise prices of long and flat steel products, and HRC coils on a quarterly basis and the price should be maintained for a period of three months at least.
PSUs like SAIL and VIzag steel should supply materials to the MSMEs on a priority basis and the steel manufacturers should allocate at least 40% of their production to the local MSMEs,” the association said in the press note.
The association also demanded that the MSMEs under the government contract and the suppliers to PSUs should be allowed to revise their price, the government should take steps to provide GST-based funding with minimal marginal rate to them and allow them to import steel materials with nil import duty.