Allow traders to pay 30% salary to employees: CAIT
   Date :12-May-2020

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Business Bureau ;
 
In a letter to Union Finance Minister Nirmala Sitharaman sent recently, the Confederation of All India Traders (CAIT) while urging for an economic package for the trading community, has drawn her attention towards some of the core issues being confronted by the trading community. CAIT highlighted that the issues are having tremendous financial burden on the traders at a time when the inflow of the business is totally stopped and the capital outflow is continuously increasing. The national-level traders body said that if corrective measures are not taken, the basic structure of retail trade in India will be highly distorted.
 
CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said that as per advisory of the Government, the traders across country discharged their responsibilities by paying full wages to their workers for the month of March despite having much financial constraints however, now it is extremely difficult for them to pay salary for the month of April to their employees due to acute financial crunch and if the salaries are paid, the basic financial foundation of the retail trade will be shaken and destroyed. In this context, the CAIT has suggested the Finance Minister to reconsider the earlier decision and allow traders to pay the salaries as per mutual agreement between the employer or employees or allow traders to pay 30% of the salary which is quite sufficient for livelihood of the employees.
 
Alternatively, the Government may contribute 50 per cent of the salary, traders may contribute 25 per cent and rest of 25 per cent to be borne by the employees. “Under the current scenario, when there is no business and traders are overburdened with several financial obligations, a needy intervention from the Government is required to meet the end of justice,” CAIT observed. Bhartia and Khandelwal further suggested that the Mudra Yojna may be amended in a manner that traders can borrow loans from banks at a reasonable rate of interest and the cap of Rs 10 lakh under Mudra Yojna may be increased to Rs 25 lakh. The Non Banking Finance Companies (NBFCs) should be given a mandate to disburse Mudra Loans and the banks may be asked to provide loans to NBFCs at a lower rate of interest. CAIT further suggested that Trade Receivables Discounting System under Reserve Bank of India, the Bills of the traders raised against any buyer entity having a minimum turnover of Rs 300 crore are discounted by various agencies. However, the average traders are unable to avail this scheme since most of their respective buyers are having turnover much lower than the above threshold limit.
 
CAIT suggested that for one year, the requirement of Rs 300 crore should be brought down to Rs 10 crore which will enable most of the traders to get their bills discounted and they will be having some amount of working capital. Bhartia and Khandelwal also said that in order to provide traders the requirement of their working capital post COVID-19, it is suggested that banks may be advised to provide “Corona Finance Loan” to traders in an easy way with 3 per cent rate of interest and the first instalment of the said loan may be counted from January, 2021 to be paid in 60 equal instalments. They further said that apart from these steps, an economic stimulus package is awaited by the traders.