Steel manufacturers seek revival of govt distribution system for MSMEs

TNN

Steel manufacturers and MSMEs in Punjab have demanded restoration of govt-supported procurement mechanisms for raw materials.

Industry bodies have sought resumption of distribution through depots of the Punjab Small Industries and Export Corporation (PSIEC), stating that the earlier system enabled small units to procure steel directly at reasonable rates.

At present, they said, MSMEs are forced to depend on private distributors and large players, who source material from public sector undertakings at lower prices and sell it at higher rates.

Industrial representatives claim this has created a market imbalance, strengthening the hold of a few dominant players and affecting engineering units, fabrication industries, agricultural equipment manufacturers and small workshops.

Under the earlier Joint Plant Committee discount regime, PSIEC and the National Small Industries Corporation procured steel in bulk from PSUs like SAIL and passed on price benefits to small units. However, following deregulation of the steel sector, such distribution reduced sharply around a decade ago.

Industrialists said MSMEs have since lost direct procurement access and are dependent on costlier secondary channels.

The Ludhiana Beopar Mandal has written to the Prime Minister, seeking intervention. Its president, Maninder Pal Singh, said MSMEs are now dependent on private networks. “Earlier, PSIEC depots ensured access to steel at fair and transparent rates. After the system ended, small units were left at the mercy of private players,” he said.

He added that cartel-like conditions have emerged due to supply concentration among a few large entities, making it difficult for smaller manufacturers to compete.

Industrialists have also demanded restoration of PSIEC-based distribution and stricter government oversight on pricing by public sector steel companies.

They warned that limited access to affordable steel affects production, employment and competitiveness of Punjab’s MSME sector.

PSIEC godowns, they noted, are now largely vacant. Narinder Bhamra, president of the Fasteners Manufacturers Association of India, said the earlier distribution system was more viable, while current dependence on private pricing is hurting industry.

They urged both the Centre and the Punjab government to ensure equitable access to steel for small and medium manufacturers.