Lok Sabha Question No. 4754 (UNSTARRED), answered on 2022-03-31
Subject: Raw Material Prices
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: S.R. Parthiban

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 4754 TO BE ANSWERED ON 31.03.2022

## RAW MATERIAL PRICES

## 4754. SHRI PARTHIBAN S.R.:

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

- (a) whether  the  Government/MSMEs  are  aware  of  the  ever-increasing  prices  of  raw  materials and the difficulties faced by them in honouring the contracts;
- (b) if so, the steps taken by the Government in addressing the raw material prices; and
- (c) the steps taken by the Government with raw material producers to reduce prices?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI BHANU PRATAP SINGH VERMA)

(a)to(c): The National Small Industries Corporation Limited (NSIC) a Public Sector Undertaking  under  the  Ministry  of  Micro,  Small  and  Medium  Enterprises  (MSME)  facilitates MSMEs to meet their raw material requirement by making arrangements with bulk manufacturers for procurement of materials and supplying the same to MSMEs. NSIC also provides financial assistance to MSMEs under their Raw Material Assistance (RMA) Scheme against bank guarantee for payment to  the  suppliers.  The  issue  of  increase  in  prices  of  raw  materials  specifically  post  Pandemic  was regularly  taken  up  by  NSIC  with  the  bulk  producers.  Further,  the  Government  of  India  has  taken several  measures  to  deal  with  the  issue  of  rise  in  raw  materials  including  MSME  sector,  which include:

- (i) To  ensure  enhanced  production  and  availability  of  iron  ore  and  steel,  steps  like  reforms  in mining and mineral policy early operationalization of forfeited working mines of Odisha by the State/Central PSUs and ramping up production and capacity utilization by steel producers have been taken by the Government.
- (ii) In Union Budget 2022-23, Custom Duty exemption on steel scrap has been extended for up to 31 st March,  2023  to  provide  relief  to  the  MSME  secondary  steel  producers.  In  addition, considering prevailing high prices of metals, certain anti-dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel have been revoked.
- (iii) To give boost to the Gems and Jewellery sector, a decision has been taken in Union Budget 2022-23  to  reduce  custom  duty  on  cut  and  polished  diamonds  and  gemstones  to  5%.  Also, simply sawn diamonds were exempted from customs duty. Also, custom duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining has been reduced.
- (iv) To give relief to secondary and MSME sector steel industry engaged in Housing/construction sector, TMT bars below 8 mm have been exempted from the purview of the Quality Control Order, as these are primarily used for non-critical applications.
- (v) Ministry  of  Steel  has  also  issued  clarifications  to  CPWD,  MoRTH  etc.  that  steel  produced through various routes of production using iron ore, steel scrap and DRI should be treated at par if the steel produced conforms to the relevant BIS standards.

*****