More than 250 MSME industries of Dhanbad and Bokaro operating from Industrial parks of Jharkhand Industrial Area Development Authority, are in deep crisis due to a sharp rise in raw materials like pig iron and raw plastic. The aggrieved industry owners in turn are demanding immediate intervention by the government in the form of tax relief and subsidy.
Around 150 industries of Balidih in Bokaro dependent on supply of spares like rubber etc, to Bokaro Steel Limited are suffering huge losses for more than a year and some are on the verge of closure.
The situation is similar for over 100 industries of Dhanbad including the plastic industry, electrical gadgets producing industries etc.
Talking to the Telegraph Online, Mahesh Kejriwal, President of Jharkhand Industries Association owner of a rubber roll industry at Balidih said, “We are procuring raw materials at almost double the rate of last year but our end product are static due to stiff competition as result of which we are incurring losses.”
“While there is no competition in the raw material production, we in the spare production sector are huge in numbers including large corporate, medium scale industries, small and micro industries.
“Due to the price war among us, the market of our spare products is slowly getting shifted towards corporate brands,” said Kejriwal.
“The situation of MSME industries of Adityapur is slightly better as their contract with steel industry there has provision ofprice variation clause,” elaborated Kejriwal.
“As per the provisions of price variation clause, the contract is adjusted for both supplier and purchaser as per the increase or decrease in rates and price of labour, cement, steel, plant, machinery, spares, fuel and lubricants and other material inputs, in accordance with the principals and formulae specified,” said Kejriwal.
Rajiv Sharma, General Secretary of Jharkhand Industries and Trade Association owner of an electrical gadget industry at Kandra Industrial area of Dhanbad said, “The prices of iron sheet which was around Rs 55 to Rs 60 per kg till last year have increased to around Rs 110 per kg and similarly the prices of plastic granules have also increased from Rs 40 per kg of last year to around Rs 75 to Rs 80 this year almost doubling production cost.”
“The MSME industries have limited capital thus increase in production adversely affects our cash flow which ultimately affects production,” further said Sharma.
“Government should come forward with a subsidy plan to save these MSME industries on the model of other advanced countries, otherwise the international players will come into the scene affecting our industries affecting employment opportunities too,” said Sharma.
“Both the central and state governments should come forward with some steps that could be like, decrease in the GST rate for the raw material purchase for the MSME industries.
“Last year the Central government had announced some relief in the form of loans but this year there is no such move forward,” said Sharma.