The retailer associations have urged the government to announce a wage support subsidy that will help them save millions of jobs in the retail space reeling under COVID-19 stress.
While lauding all government efforts while dealing with the pandemic, the Retailers Association of India (RAI) said this extension will have a disproportionate impact on the sector that directly employs 40-50 million people and they would like to retain this talent.
The Reserve Bank has announced a slew of liquidity-boosting measures for NBFCs and other segments including further easing of bad-loan rules, freezing dividend payment by lenders and pushing banks to lend more by cutting the reverse repo rate by 25 basis points, which has helped in lifting sentiments amid the COVID-19 gloom.
“We appreciate the government’s efforts to safeguard the nation as it grapples with the pandemic. Interventions in the form of relief measures by the RBI or more recently, renewed MHA guidelines in the wake of lockdown 2.0, have offered some relief to the mounting stress on the economy,” Kumar Rajagopalan, CEO, RAI.
“However, we fear this extension will have a disproportionate impact on the retail sector that directly employs 40-50 million Indians and we would like to retain this talent,” he said.
Without an urgent economic stimulus and policy support, retail sector stands to lose about 25 percent of these jobs, he said.
“We, therefore, request the government for a job support subsidy at 50 per cent of the minimum wages as cash support to encourage retailers to continue employment of staff during the extended lockdown and recovery period after the lockdown,” he added.
Apart from this since retailers have several credit lines, RAI requested for a moratorium of 270 days for all principal and interest payments of Cash Credit Lines for more than six months – up to December 2020, with non-fund sources such as bill discounting, letters of credit included in the moratorium, Rajagopalan added.
Clothing Manufacturers Association of India (CMAI) president Rahul Mehta said almost 80 percent of the garments industry falls under MSME business category – more on the micro-business side than any other – and would, therefore, be impacted much harder.
“We hope that the government would help with a wage subsidy to retain workers, providing working capital and an incentive package to restart the industry,” he added.
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