A cross-section of the representatives of the Micro Small and Medium Enterprises (MSMEs) said the announcements made by Union Finance Minister Nirmala Sitharaman in the Union Budget will not solve any of the problems facing the sector for several years now.
Ms. Sitharaman said the government would reduce the customs duty uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steel. To provide relief to metal recyclers, mostly MSMEs, she extended duty duty exemption on steel scrap till March 31, 2022.
She announced that the anti-dumping duty (ADD) and the countervailing duty (CVD) on certain steel products would be revoked. Also, to provide relief to copper recyclers, duty on copper scrap would be reduced from 5% to 2.5%.
‘Control steel prices’
“MSMEs, which are badly affected by the increase in raw material prices, are dependent on local manufacturers and the reduction in import duty on iron and steel may not trickle down to help this sector,” M. Balachandran, president, Ambattur Industrial Estate Manufacturers’ Association, said. “MSMEs hope the government will take firm steps to restrain local steel companies from arbitrarily increasing the prices,” he added.
‘No specifics’
“There is no favourable specific announcement for MSMEs such as bank loan interest rate and GST reduction,” said R. Selvam, secretary of Thirumudivakkam Industrial Estate Manufacturers Association. “We were expecting the import duty cut for plastic raw material and export ban on specific plastic raw material till domestic demand is normalised,” he said.
After the COVID-19 lockdown norms were relaxed, MSMEs and other user industries had been severely hit by a sharp rise in iron and steel prices. The plastic industries had severely been impacted due to a spike in raw material prices.
K.V. Kanakambaram, president of The Industrial Estate Manufacturers Association, Guindy, said: “Though the government made tall claims of helping the MSMEs in the last six months, nothing happened on the ground. There has been no support from the State government as well as the Centre,” he said.
‘Representations ignored’
Tamil Nadu Small and Tiny Industries Association (TANSTIA) president S. Anburajan said despite a detailed representation to finance and MSME Ministries, none of the suggestions were considered and the sector had been overlooked. “We hope and request the Finance Ministry to consider our request favourably and issue a special order to support the revival of MSME industries,” he said.
Mr. Anburajan said the reduction in customs duty of import of iron and steel and copper scrap would help bring down prices marginally. However, major policy decisions were required to protect the MSMEs from the rising prices of commodities in the domestic market, he added.
