Lok Sabha Question No. 4940 (UNSTARRED), answered on 2021-03-25
Subject: Supply of Raw Material to MSMEs
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Shashi Tharoor, Lallu Singh, Tapir Gao

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 4940 TO BE ANSWERED ON 25.03.2021

## SUPPLY OF RAW MATERIAL TO MSMEs

4940.

DR. SHASHI THAROOR: SHRI LALLU SINGH: SHRI TAPIR GAO:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether the Government has taken any step to aid manufacturing MSMEs in obtaining  raw  materials  at  a  subsidised  cost  as  rising  prices  of  raw  materials  have severely affected their operations and if so, the details thereof;
- (b) whether  the  Government  has  considered  alternatives  to  help  MSMEs  in obtaining  raw  materials  such  as  allowing  imports  of  certain  raw  materials  to  help supply and if so, the details thereof;
- (c) whether the Government has taken step to ensure that the existing supply  of raw materials such as steel and iron ore are diverted to Indian MSMEs on a priority basis instead of being exported and if so, the details thereof;
- (d) whether  the  Government  proposes  to  assist  investment  in  machinery  to manufacturing MSMEs by offering the same at subsidised prices and if so, the details thereof;
- (e) whether the Government has taken any additional steps to reduce the cost of workers returning to MSMEs or have PSUs renegotiate contracts more leniently with MSMEs and if so, the details thereof; and
- (f) the  steps  taken/being  taken  by  the  Government  to  stabilize  the  prices  of  raw materials so that MSMEs can work to their full potential?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NITIN GADKARI)

(a) & (b): To  ensure  regular  supply  of  raw  material  to  MSMEs,  National  Small Industries Corporation Ltd. (NSIC), a public sector undertaking under the Ministry of MSME,  facilitates  MSMEs  in  meeting  their  raw  material  requirements.    For  this purpose,  NSIC enters  into  arrangements  with  bulk  manufacturers  for  supply  of  raw materials  to  MSMEs.   NSIC also provides financial assistance to  MSMEs under its Raw Material  Assistance  Scheme  against  bank  guarantee  for  payment  to  suppliers. The details of Raw Material Distribution by NSIC during the last & current year are as under:-

| Year                    |   Qty.MT |   Value (Rs. In Lakh) |
|-------------------------|----------|-----------------------|
| 2019-20                 |   243422 |                123549 |
| 2020-21 (upto Jan.2021) |   188082 |                120832 |

(c) to (f): Government  of  India  has  taken  various  steps  to  ensure  continuous supply of raw materials to MSMEs.  Some of the steps taken to meet the raw material demands of MSMEs in the Steel Sector are as under:-

- (i) Guidelines  have  been  issued  on  24.06.2020  by  Ministry  of  Steel  for providing  limited  quantum  of  four  product  categories  of  steel  (hot  rolled coil, cold rolled coil, wire rods and alloy steel bars) to MSME members of Engineering  Export  Promotion  Council  (EEPC)  at  export  parity  price  by domestic producers.
- (ii) Relief  has  also  been  provided  to  metal  recyclers  by  exempting  Basic Customs Duty (BCD) on steel scrap and reducing BCD to 2.5% on copper scrap  as  well  as  revocation/temporary  revocation  of  ADD  and  CVD  on certain steel products.
- (iii) Besides,  production  of  iron  ore  and  steel  by  mining  companies  and  major steel producers has been increased to ensure steady availability of steel for use by MSMEs.

Further, Ministry of MSME is implementing various schemes and programmes for growth and development of MSME Sector in the country.  These programmes are aimed at providing credit support for new enterprise creation as well as expansion of existing enterprises, skill development, technology upgradation, enhancing competitiveness and marketing support to MSMEs.  Under the Aatma Nirbhar Bharat Abhiyan,  several  measures  have  been  taken  for  MSME  sector  which  include  Rs. 20,000  crore  Subordinated  Debt  For  Stressed  MSMEs,  Rs.  50,000  crore  equity infusion  through  MSME  Fund  of  Funds  and  Rs.  3.00  lakh  crore  Emergency  Credit Line Guarantee Scheme for MSMEs.

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