The Retailers Association of India has sought a relief package to ease the financial stress as the cash inflow to the industry has come to a standstill while fixed operating costs remain.
Claiming that the Indian retail industry employs 46 million people and contributes 10 per cent of the GDP, the RAI CEO, Kumar Rajagopalan said it is a question of survival for the industry.
Shiba Prasad Panda, MD, Panda Retail Pvt. Ltd., Bhubaneswar, said retail is a people intensive industry where 90 percent of the employees work at stores earning minimum wages. With shops shut, the employees are at risk of being retrenched as retailers will not be able to manage salary payments, rentals and fixed overheads without any income.
Jaspal Singh Arora, Managing Partner, Kalamandir Fashions, Bhubaneswar, further added, “With no or low business coming, retailers are unable to make payments to suppliers most of who are MSMEs. The entire supply chain will be under stress. Distributors, C&F, Manufacturers, Raw Material suppliers, the entire value chain will have order cancellation and loss of income, which may lead to permanent closures of business, loan defaults or NPA situations.”
RAI has recommended that the Ministry of Finance and the Reserve Bank of India step in to bring some relief to the retail business.
List out some of their demands, the RAI said the ECLGS funds must be made available to the sector and additional funding to eligible retail businesses will help revive the industry.
A moratorium on principal and interest for 6 months for the sector, banks need to provide ad-hock working capital loan of 30 percent more than current limits, interest subvention with the interest not exceeding six percent were some of the other demands voiced by RAI.