M.V. Ramesh Babu, the President of Coimbatore District Small Industries Association (CODISSIA) appealed the PM of India to immediately intervene and control the abnormal price hike of raw materials needed by the MSMEs.
The strange and continuous price increase is seen especially in steel, copper, iron ore, aluminium, paper, plastics, PVC, cotton, chemicals etc. and other allied raw materials. Because of this, the product-manufacturers are unable to observe the cost of raw material and due to this, the end product prices increase also not observed in the market. Hence, MSMEs have slowed down their production.
As a result of this scenario, MSMEs who are in the supply chain and annual rate contract by the tender system, are unable to execute their orders with the respective agencies, especially PSUs and the Government.
CODISSIA President appealed to the Central Government to arrange enhanced working capital limits at 40% of the turnover from the banking sector to tide over the present crisis being faced due to the raw materials price increase.
Ramesh also stated that the government should come forward to implement NIL rate of import duty and allow imports of raw materials to India for a smooth supply of raw materials, which are the primary source of manufacturing activity.
CODISSIA said that as the Raw materials are being sold at premium rates, it requested the Government to fix the MRP price as the selling rate for raw materials so that there could be stability in price at least for three months. It also asked for an immediate ban on the export of iron ore and raw materials to ease domestic supply and check price rise.
It also suggested that reopening the SAIL yard in Coimbatore and reintroducing the system of allocation of raw materials to MSMEs at a subsidized price as was done earlier, via SAIL, VIZAG, NSIC, SIDCO and other Nodal State Government Distribution Systems, as one solution to handle this crisis.