New issue that is now troubling many MSMEs in TN?
Posted on: 06/Feb/2023 9:40:01 AM
The impact of Coronavirus pandemic coupled with other issues like power tariff hike and global economic downturn (due to the ongoing war between Ukraine and Russia) have resulted in many problems for MSMEs is a known fact.
Now, the increase in the prices of the raw materials have added to the woes of many MSMEs. The recent budget has not controlled the hike in the raw materials cost despite repeated urgings to the union govt. Now, many MSMES in Coimbatore have been finding it very tough. It is known that there are nearly one lakh MSMEs in Coimbatore that provide jobs to several thousands of people.
From January 2023, the price of raw materials started to increase after stabilising in 2022. From Rs 47040 per tonne in the month of November 2022, the pig iron price has risen now to Rs 50000 per tonne. In March 2022, the price touched the maximum and was at Rs 65150. Not only pig iron, but also the prices of casting steel, aluminium and copper etc have also become more now.
As per Mr. D. Vignesh, president of SIEMA or Southern India Engineering Manufacturers Association, the prices of raw materials are increasing to their maximum just like it happened in March and April in 2022. The lack of orders have made many pump manufacturing units to function with just 50% capacity now. He hinted that another hike in the prices of raw materials would lead to the downfall of the MSMEs.
Many MSMEs undertook protests to bring down the cost of raw materials also and due to that the TN govt waived import duty on some raw materials for the steel industry. Export duty on iron ore was increased in May 2022 to bring down the cost of raw materials.
It must be noted that after some months the TN govt cut the export duty on the steel and iron ore and hiked the import duty on some raw materials. Despite representing the issues for more than 2 years, no action has been taken till now and this was according to Mr. V. Ramesh Babu, former president of CODISSIA.
If value added products get exported rather than as mere raw materials, then the economy would grow and generate more employment opportunities. It is noteworthy that the majority of raw materials from India are now procured by China and China delivers them as value added products at competitive prices that are lesser than India.
