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MSME body AICA calls for closure of industries on Dec 20 to protest raw material price hikes

Raw material price increases go unchecked and are a matter of grave concern as they are affecting the production and working capitals of the MSMEs, said the industry body.

December 15, 2021 / 03:47 PM IST
Representational image (Source: Reuters)

Representational image (Source: Reuters)

All India Council of Association of MSMEs (AICA), an umbrella body of 170 MSME associations, has called for closure of industries across the country on December 20 to protest against the spiralling prices of various raw materials.

Addressing a press conference on December 15, AICA further said that industries will also observe a one-hour peaceful demonstration in front of the respective district collectorates on December 20.

R Ramamurthy, member of AICA and past president of Coimbatore District Small Industries Association (CODISSIA), said that a day's closure is expected to result in a production loss of Rs 35,000 crore.

Raw material price increases go unchecked and are a matter of grave concern as they are affecting the production and working capitals of the MSMEs, said the industry body.

Member associations in attendance noted that the original equipment manufacturers (OEMs) are not compensating the MSMEs despite the price increase, which in turn is deteriorating their financial condition.

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AICA members said that it has already made several representations to the Prime Minister and other ministers in the Union government to control raw material prices. However, nothing has happened and the situation is only getting worse, they added.

The members urged that the prices of raw materials should be brought to the level of April 2020 prices.

According to AICA, prices of raw materials such as Aluminium Alloy, Kraft paper and copper have increased by more than 100 percent in October 2021 as compared to the levels in April 2020.

In a statement, AICA also proposed measures to address the issue of raw material price increase.

The industry body has suggested hedging of steel for MSMEs for a period of one year in order to provide protection against escalation. It also suggested that the public sector enterprises must be instructed to accept cancellation of orders from MSMEs without putting a penalty or blacklisting them, as an event of increase in the prices of steel is not within the control of the MSMEs.

AICA also called for the PSUs to publish steel prices on a quarterly basis and urged that the price should be maintained for a minimum of three months at a stretch.

Amid growing concerns of small industries on input prices, the government seems to have taken note of the issues. At a meeting on December 9, Piyush Goyal and Narayan Tatu Rane, the commerce and MSME ministers, met steel industry stakeholders and stressed the need for easier supply of the alloy at lower costs to MSMEs.
Shreeja Singh
first published: Dec 15, 2021 03:47 pm
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