MSMEs are Closing due to Price Rise in Steel and Demonetization of the Currency: CICU

Ludhiana, December 29, 2016: Sh.Avtar Singh, President, and Sh.Upkar Singh Ahuja, General Secretary CICU today said that the decision on the demonetization of the currency and prices rise in the steel are the main reasons for closing down the MSMEs. The work force engaged in the manufacturing sector has also been disturbed and not easily available. The migrated labour has gone back to their respective native places. The shortage of labour and price rise in the steel has affected the engineering manufacturing industry at a large.

The industrial units are under panic and they are thinking about the future impact of this price rise. They are also under the fear of the impact of the implementation of the Good and Services Tax (GST).
Moreover, the new decision about the ESI under the Employees’ State Insurance Act, 1948 from Rs.15,000/- per month to Rs.21,000/- per month w.e.f. 1st January 2017 has been introduced by the Government of India, Ministry of Labour & Employment.

Sh. Avtar Singh also added that Minimum Import Price (MIP), imposed on 173 products has also affected the MSMEs engineering industry. This decision has already cut on the production upto 40% and engineering export have been reduced by 15% to 20%.

Sh. Upkar Singh Ahuja, General Secretary CICU said that he appealed to the Government that above big players should be asked to restrict in the increase price rise of steel till the implementation of the GST. The rumors in the steel market that the big companies are going to increase their prices from Rs. 6000 to Rs. 8000 per metric ton in the future. This all panic has been created in the minds of the manufacturing units and they are planning to reduce their production by 40%.

They have sent letters to the Hon’ble Prime Minister of India that immediate steps be taken to control the hike in the steel prices to save the interest of the MSMEs sector. The monopoly of the large industries may not have the lobbying in deciding the price of steel. The win to win mechanism may be adopted for the MSMEs so that they can survive in the global competition.