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MSMEs in Vizag fear RINL privatization will badly hit local business


Thousands of people in Micro, Small and Medium Enterprises (MSMEs) units dependent on PSUs like RINL-Visakhapatnam Steel Plant feared privatization will further hit the sector badly. There are industrial zones at Autonagar, Gajuwaka, Atchutapuram, Parawada, Kancharapalem, Pedagantyada, Gambheeram, Gurrampalem and Rachapalle in Visakhapatnam district with around 10,000 MSME units. They are mostly involved in fabrication, lathe work, coir processing, casting and machining. Of these, 1100 MSME units, mostly fabrication units, have mushroomed in Autonagar after commissioning of the Visakhapatnam Steel Plant.

They are largely getting orders through steel plants, BHPV and HSL and HPCL, Refinery and Railways. The MSME units have been under stress due to the reforms like demonetization, GST and the never-before economic meltdown induced by the Covid-19 pandemic. Speaking to Hello Vizag, Visakha Autonagar Small Scale Industries Welfare Association president AK Balaji said that “The revival packages announced by the state and Union governments have somehow helped in increasing liquidity. But lack of demand is a concern. “The public sector can play a crucial role in demand creation, particularly by supporting the MSME sector. The government has already mandated that at least 25 percent of its requirements have to be procured from MSMEs.

The current situation calls for a more concerted effort to increase this percentage as much as possible, keeping in mind the individual needs of different sectors. However, the private unit complying with the mandatory procurement order is always doubted,” he explained, fearing that privatization of PSUs will further weaken the MSME units. The PSUs, MSME and other ancillary sectors have been generating huge employment in Port City in comparison with the private sector. The MSME units have been urging the Union and State Governments to ensure that the public sector units give priority to the local MSMEs while placing orders. Visakhapatnam Steel Plant generates around 3 lakh to 4 lakh employment both directly and indirectly.

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