MSMEs, already laid low, run into price rise hurdle December 11, 2020, 3:22 PM IST
It has been a case of surmounting one hurdle after another for the micro, small and medium enterprises (MSMEs), the backbone of Tamil Nadu’s strong manufacturing base in engineering and automobile sectors, throughout 2020. As the year draws to a close, the segment is facing fresh trouble over surging raw material prices.
If the general economic sluggishness marred the sector at the beginning of the year, the Covid-19 pandemic and the subsequent lockdowns brought the operations to a near standstill in the March-May period along with the exodus of guest workers. “Most MSME units were in despair in March when they had to shut due to Covid lockdown. While the Centre’s financial package, which permitted a 20% increase in the existing borrowing limit of the units from banks, the money that came in was used to manage running costs of sustaining operations of the companies rather tha
Sharp increase in raw material prices hit MSME units hard
December 11, 2020
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The MSME units in the foundry and engineering space are in a fix, caught between abnormal increases in the price of raw materials on the one hand and order enquiries coupled with labour shortage on the other.
“The last three months have been terrible. The situation is worsening by the day; we are unable to schedule production,” say unit owners, urging immediate government intervention to bail them out of their present imbroglio.
“Both the Centre and State should step in without further delay. If the situation persists for another month or so, we will have to shut operations,” said K V Karthik, Managing Director, Deccan Industries and president, the Southern India Engineering Manufacturers’ Association (SIEMA).