Virendra Singh Rawat
Lucknow / May 20, 2021
In the backdrop of rising domestic steel prices
and recent diversion of oxygen from manufacturing towards the medical use, the
micro, small and medium enterprises (MSME) sector has urged the Uttar Pradesh
government to notify steel under the Essential Commodities Act.
In a memorandum sent to UP chief minister Yogi
Adityanath, Indian Industries Association (IIA), an umbrella of nearly 5,000
MSMEs, said steel should be notified as an essential commodity in wake of the
recent upsurge in prices and resultant impact on steel-based industries.
The prices of iron and steel, copper, aluminum,
plastic and rubber have increased drastically in recent weeks as compared to
last year, while the entrepreneurs are in dire need of additional capital to
keep their businesses afloat following the Covid-19 induced lockdown matrix,
the Association claimed.
“There is an urgent need for instituting a proper
mechanism in relation to controlling the price increase. Due to the coronavirus
crisis, there has been an unprecedented increase in the demand for oxygen in
the health sector. While, IIA supports the diversion of the commodity for
medical uses, the steel industry is affected by the reduction in production in
the steel sector,” IIA underlined seeking relief.
Despite muted domestic demand owing to Covid-19
lockdown and restrictions on movement, the steel price hike is primarily a
fall-out of the international price movement, which has been ticking northwards
after China restricted its exports.
Meanwhile, industry has also sought relaxations
with regards to the repayment of business loans due to the lack of industrial
activities and demand slump since last year.
“The entrepreneurs are saddled with the lack of
liquidity coupled with fixed regular expenses in the form of salary, tax
liability, interest payments etc. In such a situation, an economic package is
required from the banks, such as offering financial assistance at a lower rate
of interest,” the memorandum mentioned.
Due to weak market demand, muted capital flow and
lack of resources, the repayment of installment of old loans to entrepreneurs
is outweighed. In such a situation, there is a need to provide special
facilities to banks for MSMEs, IIA noted.
Nonetheless, the UP entrepreneurs have expressed
keenness to foray into the segment of oxygen generating plants and other life
saving devices such as oxygen concentrators etc.
“It is suggested that a guideline should be
formulated early regarding administrative and technical approval and clearance
in this respect. Regarding technical support and guidance to the entrepreneurs,
efforts should be made by the government, urging reputed institutions like
DRDO, IIT for research and development,” the IIA memorandum underlined.