New Delhi, May 6 (KNN) The National Steel Policy was recently approved by the Union Cabinet, while it claims to be a step in revolutionizing the sector, there are concerns over its utility for the MSME sector.

Talking to KNN, D. Gandhikumar, MD of Gandhikumar Foundry and also the Former President of Coimbatore District Small industries Association (CODISSIA), said that the New Steel policy does little for the MSMEs. 

He explained that already the steel prices in the country are 25-30 per cent more than the global prices of steel. The New policy proposes procurement of basic raw material from domestic manufacturers; this is likely to increase the cost.

He further said that despite the global prices coming down to 64 dollars per ton of the iron ore, the material that we get in India is very costly already.

“We are nowhere close to the International market, especially the MSMEs suffer in such a scenario as the input costs for them per unit remains much higher than the large manufacturers” said Gandhikumar

He lamented that limiting the inputs for the industry to be derived from local manufacturers would further harm the industry.  The quality of steel that is required to manufacture supplies for the auto-mobile industry is not available in the country. Maximum business the MSMEs get is from the auto-mobile sector. Therefore it is going to have a direct negative impact on the units.

Gandhikumar informed about the other allied problems that leads to a situation like this. There is the problem of credit crunch for the small units. 

It is not possible for them to stock the raw material in advance, therefore the cost of production for these units continue to be higher that the large scale industry which possess the capacity to keep the raw material piled up.

Sceptical about the newly introduced policy, the former CODISSIA president emphasized for appropriate amendments keeping in mind the interests of various stakeholders and not just the large players. 

Earlier, The Engineering Export Promotion Council (EEPC)  pointed out similar shortcomings and said that the new policy will shoot up the price of steel and result in an uncompetitive environment for the Indian Steel industry. (KNN/ DA)