Mindfulness Meditation Therapy

Main Menu

  • Home
  • Health
  • Relaxation
  • Happiness
  • Well-Being
  • Investment

Mindfulness Meditation Therapy

Header Banner

Mindfulness Meditation Therapy

  • Home
  • Health
  • Relaxation
  • Happiness
  • Well-Being
  • Investment
Relaxation
Home›Relaxation›The retail organization calls on the Minister of Finance to intervene in a timely manner; recommends easing measures to avoid NPA situation in retail

The retail organization calls on the Minister of Finance to intervene in a timely manner; recommends easing measures to avoid NPA situation in retail

By Eric Gutierrez
April 29, 2021
0
0


Lockdown: the organization of retailers calls on the Minister of Finance to intervene in a timely manner; recommends easing measures to avoid NPA situation in retail

New Delhi, April 29 (KNN) Following the lockdown due to the second wave of the pandemic, the Retailers Association of India (RAI) appealed to India’s finance minister for urgent intervention to prevent the sector from slipping into a position of irremediable financial damage.

The RAI said retail businesses across the country are among the hardest hit, as several states have imposed lockdowns on malls and shopping complexes where most modern retailers operate.

He also said the industry is struggling to survive the immense financial stress that threatens to derail businesses. It is imperative that the Indian government intervenes with the necessary support to save the retail sector in India.

Speaking about the state of the retail industry in India, Kumar Rajagopalan, CEO of RAI, said, “With the safety of customers and our workforce in mind, retailers appreciate the measures taken by the government to curb the spread of the pandemic. Right now, nearly 80% of retail stores are closed due to various interstate restrictions, and the few stores that remain open do not have footfall. ”

Industry cash inflows have stalled, while fixed operating costs remain intact. With zero income, retailers would still have to pay overheads like wages, electricity, and rents. If a rapid relief program is not provided by the government to alleviate the financial stress, then the industry will have a hard time surviving this second wave, ”he added.

In a submission to the Ministry of Finance, RAI recommended that the Ministry of Finance and Reserve Bank of India (RBI) intervene at the right time to relieve growing stress on retail businesses in the wake of COVID . -19 second wave.

“The immense financial stress facing the retail sector will have a negative impact on both livelihoods and the exposure of the banking sector to the sector as retailers start to become insolvent,” he said. added the agency of retailers.

In the submission, RAI called for the following much-needed easing measures to avoid NPA (non-performing assets) situations in retail:

Extend the benefits of ECLGS 3.0 to retail businesses: The government extended the Rs 3 lakh crore emergency line of credit guarantee program for three months until June 30, 2021 and also broadened its scope to new sectors including hospitality, travel and tourism.

Recommendation: RAI recommends that the Ministry of Finance also extend the benefits of ECLGS 3.0 to retail businesses. The Committee of Experts set up under the chairmanship of KV Kamath recommended financial ratios for 26 sectors in difficulty which could be taken into account by credit institutions when finalizing a resolution plan for a borrower. Corporate Retail Outlets is one of the 26 sectors selected by the Kamath panel as part of the “Covid19 stress resolution framework”.

Although this was explicitly mentioned during the announcement of ECLGS 2.0, it was not clarified in the notification announcing ECLGS 3.0

RAI also recommended that this be clarified immediately and that ECLGS funds be made available to the retail sector. The availability of additional financing facilities for qualifying retail will go a long way in reviving retailing, protecting jobs and creating an environment conducive to job creation.

Announce a moratorium on principal and interest for 6 months for the 26 stressed sectors: The retail sector represents an investment of Rs 2.50,000 crore and nearly Rs 75,000 crore could turn NPA if urgent action to alleviate working capital challenges is not taken by the Reserve Bank of the ‘India and the Government of India. This will jeopardize nearly 3 million jobs directly in the retail sector. Associated sectors that depend on retail trade would also be affected in the same way. In the textile sector alone, across the entire value chain, nearly 10 million jobs are threatened. Plus, it will shut down the engine which can trigger a consumption-induced recovery for our economy.

Recommendation: In light of the above, RBI is expected to announce a moratorium on principal and interest on all loans for up to 6 months.

Mandate banks to make ad hoc working capital loans 30 percent above current limits so that critical payments such as wages and salaries can be made.

There is a strong need to reduce the strain on working capital with respect to sanctioned working capital facilities in the form of cash / overdraft credit. Almost 70 percent of retailer spending is on wages and rents. Banks are unwilling to provide working capital loans to retailers to meet future payroll and rent debts. They have taken the position that working capital can only be provided in return for current assets and retailers have exhausted the working capital limit to which they are eligible based on their current level of current assets.

Recommendation: The RBI is asking banks to increase the working capital limit of retailers by 30% to help them pay salaries and suppliers. Failure to pay wages could lead to major social unrest in local areas and massive job losses. Freeing up additional working capital will prevent this. In addition to relaunching the supply chain, additional working capital will be made available to suppliers, who can restart factories and in 8-10 weeks the cogs of the economy can begin to move forward.

Provide an interest subsidy to reduce the interest burden: In the aftermath of the COVID-19 lockdown, retail businesses must deploy higher levels of capital to survive periods of no income or low income. Retailers operate with very low margins unlike manufacturing companies and have little fiscal space to absorb the increased interest burden.

Recommendation: To help the industry cope with the higher interest burden, interest rates on all retail loans should be brought down to an effective rate of 6 percent through appropriate mechanisms such as programs. interest rate subsidy.

The RAI further said that India will always be a consumer economy and the pressure on the retail sector is crippling the entire value chain, which includes manufacturing, entertainment, down to artisans and others. micro-enterprises, resulting in layoffs and downscaling or even largely shutting down operations.

“The entire retail sector is ready to play its role in the economic recovery, but this will not be possible without the support of the government,” he concluded.



Source link

Related posts:

  1. County eases COVID restrictions | Occasions reporter
  2. The federal government will chill out on the manufacturing sector
  3. Jeffco Public Well being relaxes masks mandate for out of doors actions – Colorado information, climate and sports activities
  4. A restful future awaits Klotz | Information, Sports activities, Jobs

Categories

  • Happiness
  • Health
  • Investment
  • Relaxation
  • Well-Being