CODISSIA chief meets CM Stalin- Urges control of prices

M.V. Ramesh Babu, President, CODISSIA met the Chief Minister of Tamil Nadu M.K. Stalin in Chennai on Friday and discussed the drastic increase in the prices of all raw materials and submitted a memorandum to the Chief Minister.  

The petition states, “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 the foundries, valves and automobiles sector.  Despite several demands that have been made by industrial bodies requesting the Government to control the increasing trend of all raw material prices, this issue has not been resolved to date. 

The situation is worsening each day and the industries are facing a lot of crises.”  
“Due to the heavy price increase, the industries are unable to cope with the crisis and industries employing 25 – 50 workers are forced to close down their operations and even they are trying to sell their machinery 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,” the petition reads.

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 the organisation has also submitted the following few suggestions to control the prices of the raw materials:

Immediate Ban on export of all raw materials to ease domestic supply and check price rise and implement NIL rate of import duty.

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 a constant price at least for three months.   Large Industries and PSUs producing all raw materials should focus on MSMEs and supply on a priority basis and should allocate at least 50% of their production to MSMEs.

Protection against escalation for some period: 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 marketplace.  

This kind of hedging should be possible for a period of one year (as the 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 the increase in raw material price is a Force Majeure event outside the control of the MSMEs.  Further, all MSMEs under government contracts and suppliers to PSU, should be allowed to revise their prices with fresh quotes. For all finalised government and PSU supplies, MSMEs should be allowed to invoke the price escalation clause / Provision for re-quote.

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 a subsidised price as was done earlier, via SAIL, VIZAG, NSIC, SIDCO and other Nodal Government Distribution Systems.

Minister for Electricity, Prohibition and Excise V. Senthil Balaji, Minister for Industries Thangam Thennarasu, Minister for Micro, Small and Medium Enterprises T.M. Anbarasan, Dr P. Umanath IAS and Anu George, Secretaries to the Chief Minister were also present during the meeting with the Chief Minister.  Office Bearers from sister Associations also participated in this meeting.