CODISSIA president met the Chief Minister of Tamil Nadu Mr.M.K. Stalin at Chennai and discussed about the drastic increase in the prices of all raw materials
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Coimbatore, April. 9: Mr. M.V. Ramesh Babu, President, CODISSIA met the Chief Minister of Tamil Nadu Mr.M.K. Stalin at Chennai and discussed about the drastic increase in the prices of all raw materials and submitted the following memorandum to the Chief Minister. Mr.V. Senthil Balaji, Minister for Electricity, Prohibition and Excise, Mr.Thangam Thennarasu, Minister for Industries, Mr. T.M. Anbarasan, Minister for Micro, Small and Medium Enterprises, Dr. P. Umanath IAS and Anu George IAS, Secretaries to Chief Minister, Government of Tamil Nadu were also present during the meeting with the Chief Minister. Office Bearers from sister Associations have also participated in this meeting.
Coimbatore is a manufacturing hub powered by MSMEs and caters to the manufacturing of pumps, motors, compressors, textiles, wet grinders and many other sectors in addition to being in foundries, valves and automobiles sector. Despite several demands have been made by industry bodies requesting the Government to control the increasing trend of all raw material prices, this issue has not been resolved till date. The situation is worsening each day and the industries are facing lot of crisis. Since the prices of raw materials have increased manifold, the MSME industries will cease to exist, if necessary corrective action is not directed seriously by the Government on the drastically increasing prices of all raw materials and other allied materials. MSMEs are facing with cancellation of orders, uncertainty of consumption in the market, declining of exports and also closure of units etc.
Ramesh Babu, President, CODISSIA said:
Due to the heavy price increase, the industries are unable to cope up with the crisis and industries employing 25 – 50 workers are forced to close down their operations and even they are trying to sell their machineries at a very low cost to manage their expenditures. They are unable to pay their bank dues, interest on loans, rent for their business premises and other statutory dues to the Government.
In this Scenario, CODISSIA has requested the Government to take some concrete steps to control the prices of all raw materials to save the MSMEs from this difficult situation and we have also submitted the following few suggestions to control the raw materials prices.
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 for smooth supply of raw materials, which are the primary source of manufacturing activity.
Raw materials are being sold at premium rates and we request the Government to fix the MRP price as the selling rate for all raw materials, to have constant price atleast for three 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.
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 market place. 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 quote. For all finalised government and PSU supplies, MSMEs should be allowed to invoke price escalation clause / Provision for re-quote.
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.
State Government has to form a Committee for studying all the raw material prices/data’s, to prepare a detailed report with solutions, and this has to be submitted to the Central Government immediately, which no other State Government has done so far.
CODISSIA requested the State Government to initiate and pressurise the Central Government immediately to control the increasing raw material prices, for the survival of MSMEs. CODISSIA also requested the State Government to represent the above issues to the Hon’ble Prime Minister of India, Finance Minister, MSME Minister, Steel Minister and Commerce Minister, Government of India, immediately, to take concrete steps to reign in the prices of Raw Materials at once and to SAVE THE MSMEs, before they get extinct. Thus he said.
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