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05/08/2020 12:10pm

Public sector Steel companies harming MSMEs: AITF

image Public sector Steel companies harming MSMEs: AITF

Ludhiana, Aug 5 (KNN) All India Trade Forum (AITF) has accused public sector steel companies of harming Micro, Small and Medium Enterprises (MSMEs)  in the steel sector.

In this regard, AITF dashed-off a letter to Prime Minister Narendra Modi apprising him of the poor condition of MSMEs and how these policies by public sector steel companies are proving to be obstacles in the growth of MSMEs engaged in the steel sector. 

Badish Jindal, president, FOPSIA, and national president, AITF in the letter written to the PM said the MSME sector is the backbone of the nation’s economy and under the leadership of Modi, it was growing at the fastest speed as compared to other sectors. It has become the second largest employment provider after the agriculture sector.

''However, public sector steel companies are allegedly conspiring to destroy the sector,'' he added.

Since 1960 the Small-Scale Industries Corporations of the state were supplying the material to the MSME’s. There was a provision of commission under Joint Plant Committee and these SSIC’s were getting the JPC discounts against this activity. From here the Steel Ministry started the conspiracy to kill the MSME’s by scraping the Joint Plant Committee Discounts to state level small industries corporations and this resulted into the de-functioning of SSIC’s in many states.

The letter further stated that due to slab discount policies, with a difference of over 10 per cent between small and large consumers, large-scale companies started getting the same material at heavy discounts and micro and small units were either forced to shut down their industries or get the material from these large manufacturers or traders for their survival.

Since 1960 the then governments established the warehouses in all the major industrial cities so that the small consumers can get the material from these warehouses at their door steps. But to put a final nail in the coffin of MSME’s the companies under the instruction of the steel ministry have stopped the supplies to these warehouses and are promoting the direct dispatch policies.

''The minimum order can be one wagon which costs around 30 to 40 Lakh rupees. The MSME’s are unable to order such huge quantities so around 80% of the steel consuming MSME’s are forced to shut down their productions after this policy of the Ministry of Steel,'' the letter read further.

The mastermind of the whole conspiracy is the large-scale private steel producers and Chinese companies. The large-scale producers were supplying the material to the traders and the policy of supply to actual users by the Public Sector Steel Companies was creating trouble for their trader-based sale strategy. The MSME manufacturers of India were the biggest challenge for Chinese exporters. So, the companies such as Steel Authority of India (SAIL) and Rashtriya Ispat Nigam (RINL) have scrapped their original policies and formed these policies to give the benefit to private steel producers and Chinese exporters.

''Through this letter we demand a CBI enquiry against the concerned officers of the Ministry of Steel & officers of RINL and SAIL to unearth this scam. We further request you to immediately transfer the officers of the ministry of Steel and other concerned officers to give a relief to this sector,'' Jindal asserted.

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