FICO demands ban on export of steel to save MSME Industry 

Ludhiana: A delegation of Federation of Industrial & Commercial Organization (FICO) under the leadership of Mr. Gurmeet Singh Kular President FICO met Mr. Varinder Sharma, Director, MSME -Development Institute, Ludhiana; and discussed the major issued faced by the industry and demanded immediate solution. The issues discussed were as under:

Rationalization of Steel Prices: Ludhiana is a manufacturing hub powered by the MSME(s). Steep hike in raw material prices along with the impact of Covid-19 has hit the industry hard. The price of steel, CRCA Steel has shot up 40-50 percent between August and now, is expected to move further in the coming weeks. Making it unviable for the MSMEs to operate. Due to the increase in steel prices, it is not possible to run the industry after a few days. Prices in export orders are not increasing, whereas in the domestic market, prices will have to increase drastically and the MSMEs are on the verge of closure. The government is requested that unless the availability of steel is sufficient, the export should be banned. Steel is currently at an all-time high.

We urge the government to intervene by subsidizing the prices or impose price control, in order to ensure prices are reigned in. This sudden spike in raw material prices has made it impossible for MSMEs to meet confirmed orders and exports are in serious danger of loss of markets to competitors with long term negative consequences.

CLCSS (Credit Linked Capital Subsidy Scheme): Credit Link Capital Subsidy Scheme has been introduced to facilitate technology up-gradation in MSMEs by providing an upfront capital subsidy of 15 per cent (on institutional finance of up to Rs.1 crore availed by them) for induction of well-established and improved technology. Government of India has suspended the scheme, and reintroduced till 31st March 2020 only, which should me made permanent. Also, the CLCSS Subsidy limit should be enhanced from 15% to 50% & investment limit from 1 Crore to 25 Crore.

TUF for Bicycle & Sewing Machine Industry: Bicycle Industry in the mother industry of Punjab which makes India the 2nd Largest Manufacturers of World, where as China is the Largest Manufacturer of Bicycles, but the Gap between the Manufacturing quantity of both is very high, China produces 20 Crores Bicycle Per Year, whereas India only manufactures 1 Crore 30 lakhs bicycles per year. the Technology Upgradation Fund scheme should be introduced for the bicycle industry, so that the bicycle industry gets the benefits up to 40 Crores. So, Bicycle Industry can upgrade themselves to compete with the world & to become India largest Manufacturers of Bicycle in the World. Similar is the case of the Sewing Machine Industry, which also needs the TUF Scheme for competing the global standards. 

MSME Bank: The government of India, should introduce a Banking System that will cater only the MSME Sector of the industry, and provide them with Loans & Credit at the Annual Interest Rate Not More than 8 % with a simplified procedure & documentation and the same should be linked with the MSME Development Institutes. As MSME sector needs funds, the process of getting credit from the current banking system is very cumbersome and the rate of interest is also on higher side. So, there should be a MSME Bank with simplified approach, so as to facilitate the MSME Sector.

Waiver of Interest for Lockdown Period: No interest should be charges for the period of lockdown as Industry have CC limits which wholly depends upon sale purchase as there was no sales. So, no income then how can industry give interest. Industry needs the deferment of the all interest on all loans for the period of lockdown.

Amongst Present were Mr. Gurmeet Singh Kular President FICO, Mr. Rajeev Jain General Secretary FICO, Mr. Kundan Lal Assistant Director MSME DI, Mr. Gurmukh Singh Rupal Head FICO Sewing Machine Division, Mr. Mandeep Chowdhry Media Advisor FICO, Mr. Ram Kumar Singla Executive Member FICO.