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Is it the death knell of SMEs and MSEs in India?

11/05/2016 | 01:38:00 | Daanish Ellias

Times are exceedingly difficult for the steel user industry particularly in the SME and MSE sector. Thanks to MIP steel supplies have dwindled and prices are sky high making their products and very existence unviable. Already lay offs are happening as companies reduce manufacturing and support staff. Adding to the woes are BIS requirements which are simply not practical for most mills and for requirements that are sporadic. Further are the constant barrage of news of further impending anti-dumping and new steel items being identified creating an environment of fear and uncertainity 

 

It is ironical that while every country protects and encourages SMEs and MSEs, in India the reverse is happening. Once the ecosystem breaks down SMEs and MSEs will disappear taking away lakhs of jobs. You don`t get welders and machine operators overnight. They only happen with experience which is gradual and over a period of time. 

 
This complete clamp down on steel imports is even worse than during the licensing Raj period SME/MSEs could apply for licenses based on consumption and cover their requirements.
 
In the name of China, the back of the SME and MSE sector has been broken. For make in India to happen, raw materials have to be reasonably prices and globally competitive otherwise many steel towns will become ghost towns as industrial activity disappears.
 
This will further add to the NPAs as the SME and MSE sectors default on the loans they took from banks with the good intention of paying them off over the years through the businesses they were building with their hardwork, prudence and toil. And instead of a thousands of boats rising the likely scenario is of them sinking and taking with them innumerable jobs and livelihoods.

 

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