In a communication to Union Finance Minister Smt. Nirmala Sitharaman sent today, 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, which are having a 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 CAIT has said that if corrective measures are not taken, the basic structure of retail trade in India will be highly distorted.
CAIT National President Mr. B.C.Bhartia & Secretary General Mr. Praveen Khandelwal in communication to Mrs. Sitharaman said that as per advisory of the Government, the traders across Country discharged their responsibilities by paying full pages to their workers for the period of March,2020 despite having much financial constraints however, now it is extremely difficult for the traders across Country 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 the livelihood of the employees. Alternatively, the Government may contribute 50% of the salary, traders may contribute 25% and rest of 25% 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.
Mr. Bhartia & Mr. 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 25 Lakhs. The Non-Banking Finance Companies (NBFCs) should be given the mandate to disburse Mudra Loans and the Banks may be asked to provide loans to NBFC’s at a lower rate of interest.
It was 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 crores 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. The CAIT has 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.
Mr. Bhartia & Mr. 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% 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 beside above steps, an economic stimulus package is awaited by the traders which may take care of the other financial burden of the traders. There is an urgent need for handholding of traders under retail trade as it is the worst sufferer of Corona pandemic and if they are not taken care of, the sector will face numerous challenges which can’t be met by the traders along and not only the retail trade but eve the Indian economy will be hit badly.