More than 250 MSME industries of Dhanbad and Bokaro operating out of the industrial parks of the Jharkhand Industrial Area Development Authority, are in deep crisis due to a sharp increase in raw materials like cast iron and raw plastics. The aggrieved industry owners in turn demand immediate government intervention in the form of tax breaks and subsidies.
About 150 industries from Balidih to Bokaro dependent on supplying spare parts like rubber etc. to Bokaro Steel Limited have suffered huge losses for over a year and some are on the verge of closure.
The situation is similar for more than 100 industries in Dhanbad, including the plastics industry, industries producing electrical gadgets, etc.
Speaking to the Telegraph Online, Mahesh Kejriwal, president of the Jharkhand Industries Association, owner of a rubber roller industry in Balidih, said: “We are buying raw materials at almost double that of last year, but our end product is static due to the resulting strong competition. from which we suffer losses.
“Although there is no competition in the production of raw materials, there are many of us in the spare parts production sector, including large companies, medium-sized industries, small and micro-industries.
“Due to the price war between us, the market for our aftermarket products is slowly shifting towards corporate brands,” Kejriwal said.
“The situation of Adityapur MSME industries is slightly better because their contract with the steel industry provides for price variation clause, ”Kejriwal explained.
“In accordance with the provisions of the price variation clause, the contract is adjusted for both the supplier and the buyer according to the increase or decrease in tariffs and the price of labor, cement, steel, plant, machinery, spare parts, fuel and lubricants and other material inputs, in accordance with the principles and formulas specified, ”Kejriwal said.
Rajiv Sharma, general secretary of Jharkhand Industries and Trade Association, owner of an electric gadget industry in Kandra industrial zone in Dhanbad, said: per kg and likewise, the prices of plastic pellets also increased by 40 Rs per kg last year to around Rs 75-80 this year, almost doubling the cost of production.
“MSME industries have limited capital, so increasing production negatively affects our cash flow which ultimately affects production,” Sharma added.
“The government should come up with a subsidy plan to save these MSME industries on the model of other advanced countries, otherwise international players will come into the picture, affecting our industries and also affecting employment opportunities,” said Sharma.
“The central government and state governments should come up with measures that could look like a reduction in the rate of the GST for the purchase of raw materials for MSME industries.
“Last year the central government announced some relief in the form of loans, but this year there is no such progress,” Sharma said.