Monday, April 06, 2020, Mumbai : All India Manufacturers Organisation, ( AIMO ) today announced the results of their survey conducted over the weekend , across the Country with Traders/ MSMEs on the status and payment of wages/salaries for the month of Marchs due now. According to the survey, 71% of the surveyed Establishments are unable to pay either partially or fully the wages due as of Monday Morning.
Explaining the scope of the study ,Mr.K.E.Raghunathan , Past President of AIMO said , “ The Survey, conducted with over 5000 Establishments over the last few days , comprising of Traders , Micro , Small and Medium Establishments mostly employing Informal employees and wage earners situated at traditional manufacturing hubs in the country like Raipur , Surat, Raigarh, Vijaywada , Firozabad , Panipat , Tirupur , Kharagpur , Sivakasi , Salem, Channapatna, Hosur, Dibrugarh including some of the
industrial hubs in the bigger cities like Pune , Chennai , Bengaluru and New Delhi among others which are NOT dependent on the IT and ITES industries service establishments indicates that over 71% of the surveyed establishments are unable to release the Salary and wages for March , normally due by 5th of the April, for various reasons such as Computations issues, Logistics issues , Distribution issues for cash payments and Cash flow issues ”
According to the survey conducted by AIMO , an Apex trade body focused on the interests of the MSME sector , over 52 % of the Entrepreneurs are finding it very difficult to assess and determine how much to pay as some of their staff have worked from home and some of them have been idle at home. It would bring about a salary parity issue for the organization if people who do not work also get paid fully . This will also impact morale and create other issues within the labor unions. Also, almost 63% of the entrepreneurs cited Cash Flow issues as their inability to make wage payments , as the receipts from their customers have almost dropped to zero and there has been no advance received during March for fresh orders. The cycle of ‘circulation or rotation of money’ has come to a standstill.
Over 47% of the establishments are also finding it difficult to determine how to pay salaries to employees who may not have a bank account or do not access a bank account or those who may have gone back to their villages despite working for about 20 days duration of the month.
AIMO has had made several pleas to the Government in the last 10 days and highlighted that if the right support Packages, Incentives and measures were not provided to the MSME’s the Lockdown could well turn into a Shut Down India. The warning signs indicated are becoming more alarming today.
“The key sectors like Ancillary Manufacturing , Automobile spare parts , Small Hospitality Business , Apparel, Non Corporate Consumer Durables , Electronics, Tourism , Restaurants And Bars , The Entertainment Industry , Seafood and Livestock, Construction And Real Estate , Travel and Transportation are among the worst hit by this epidemic. All the MSME’s / Self Employed Individuals / Entrepreneurs associated OR whose revenues depend either directly or indirectly on these sectors have been on the verge of a Collapse situation.” Emphasized Raghunathan
The good news is that certain sectors which provide Necessities like basic food ( including packaged products like soups, snacks , water etc) , sanitizers , detergents , Pharma companies and toiletries have seen an increase in their Net growth over the last 15 days due to the panic buying and increase demand. However transportation and trans state border trade issues have curtailed the huge demand. “ he said.
“AIMO understands the predicament of our Hon’ble Finance Minister in ‘balancing act’ of walking over a thin rope of availability of resources and the need to please every sector. It is not easy at all but at the same time, every step and announcements she makes, need to be precise in providing right support and the timing is vital for the survival of every human being. AIMO is willing to assist the Finance Ministry in formation of such policy and announcements so as to avoid – error or shortfalls or need for clarifications and amendments – as minimal as possible to provide the last mile connectivity to the MSME community in India “ K.E.Raghunathan concluded.