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23/05/2022 03:24pm

MSMEs welcome duty cuts on petroleum; but skeptical about impact on prices of metals & polymers

image MSMEs welcome duty cuts on petroleum; but skeptical about impact on prices of metals & polymers

New Delhi, May 23 (KNN) The move by the Finance Minister Nirmala Sitharaman to slash excise duty on petrol and diesel to contain inflation has gone down well with Micro Small and Medium Enterprises (MSMEs).

“It is a move in the right direction and will help ease the inflationary pressures in the economy,” says Prashant Patel, President of Federation of Indian Micro and Small & Medium Enterprises (FISME). 

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But FISME is skeptical of reduction in surging prices of metals and plastics raw material in India.

According to FISME whenever the issues of high prices was raised with metal and plastics raw material manufacturers, they passed the buck on higher prices of their inputs. 

FISME has been opposed to protection given to the large producers through high import duties and other duties such as anti-dumping. They have no issue with Government reducing duties on their inputs but according to FISME producers will only benefit from the move and may not reduce their prices.

“While Government has moved to reduce duties on the inputs of these large producers, given their collusive and monopolistic behaviour in the past, we are unconvinced that large producers will reduce prices on their own,” he added.

FISME President further said that “To have a real deflationary impact on runaway prices of metals such as steel, copper and aluminum as well as plastic raw material, which are the building blocks of industries especially MSMEs, Government should bring down the import duties to zero to force producers to reduce their prices and pass on the relief granted by the Government.”

During last twelve months, the prices of raw material have jumped from 30 to 120 per cent. The inflation has choked MSMEs finances on the one hand as more working capital is needed to buy the same amount of raw material, and on other hand it has forced them to meet past commitment at losses.  (KNN Bureau)

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