Public Sector Enterprises must accept cancellation of orders from MSME with no penalty
The All India Council of Association of MSMEs on Wednesday said that Public Sector Enterprises must be urged to accept cancellation of orders from MSMEs with no penalty/blacklisting as the steel price increase is a Force Majeure event outside the control of the MSMEs.
It further added that the Goods and Services Tax (GST)-based funding is needed for all MSMEs at very marginal rates which will encourage MSMEs to purchase raw materials.
“MSMEs are the backbone of this economy, contributing to 30 percent of GDP, 48 percent of exports and creating job opportunities for 12 crore people, which translates to about 40 crore people of India (one-third of our population approximately) who are dependent on these MSMEs,” said the statement.
It must be noted that the steep hike in price of raw materials across all sectors, despite low consumption, and subsequent drop in the production by MSMEs is directly leading to loss of employment, it added.
Reining-in prices
“Government should allow the import of all steel materials based on cost and quality requirements at a nil import duty (no anti-dumping) and also ban the export of iron ore and steel products. It may be noted that better GDP growth can be realized if value-added products are exported rather than raw materials. This will generate employment too,” added the statement.
It further said that the government has always advocated strongly for the development of entrepreneurship. However, if MSMEs get crippled and choked due to the spiraling price rise of raw materials, it will only discourage entrepreneurship, ultimately leading to failure of the government’s objective of Atmanirbhar Bharat.
“Representations made by all associations on this steep hike have yielded no response from the concerned ministries till date. We, therefore, urge the Government to take concrete steps to rein in raw material prices at once and save the MSMEs before they get extinct,” said the statement.
