Credit and Finance for MSMEs: Internet and Mobile Association of India (IAMAI), which represents companies within the web and cellular industries, has advised the federal government to postpone statutory funds comparable to Tax Deducted at Source (TDS), Employees’ Provident Fund (EPF), and Employee State Insurance (ESI), amid Covid-19 outbreak, for six months for SMEs within the providers sector. This will assist small companies “continue to retain employees while giving maximum cash salaries to them,” mentioned IAMAI. MSMEs in commerce and different providers employed round 7.5 crore individuals as per FY19 annual survey by the MSME Ministry.
Majority small companies are dealing with acute liquidity crunch amid lockdown and have exhausted their financial savings in salaries and Covid-19 associated bills comparable to masks, sanitizers and so on. at factories and workplaces. Consequently, whereas they someway managed to pay March salaries to staff however for April and following they could need to make wage cuts whilst lots of them could have to scale back their workforce. “Considering the current health crisis and lockdown, many of these companies may have to resort to salary cuts, which will have a larger impact on the employees,” an announcement by IAMAI mentioned.
“Instead of putting a time period to the relief under the lockdown, the government should provide relief for six months post lockdown is lifted completely as nobody knows how much time the current situation would take to settle down. Post lockdown is lifted, there would be labour issues for at least one-two months, banks would ask for payments, there would be pending bills like electricity, telephone and other statutory payments. So the relief is required post lockdown for MSMEs businesses to come back to the normal level of business operations,” Mukesh Mohan Gupta, President, Chamber of Indian Micro, Small & Medium Enterprises (CIMSME) advised Financial Express Online. The affiliation has round 1.10 lakh MSME members.
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However, suspending TDS deductions from staff’ salaries and contributions by each worker and employer in direction of ESIC and EPF will assist the workforce to make use of the complete wage a minimum of within the present interval. The Finance Minister Nirmala Sitharaman had diminished the rate of interest to 9 per cent from 18 per cent earlier on delayed deposit of TDS whereas tax returns deadline was prolonged to 30 June 2020. The minister had additionally introduced final month that the federal government will bear the 24 per cent contribution of each worker and employer mixed to the EPF for the approaching three months to assist MSMEs with higher money flows and liquidity.
The affiliation, which has Amit Agarwal — Amazon India head as its Chairman, additionally urged the federal government to permit e-commerce companies to renew providers following the Home Secretary notification on Sunday clarifying that e-commerce firms can be allowed to promote solely important items. This had stunned firms comparable to Amazon, Flipkart, Snapdeal others who had been planning to restart their full providers following the federal government’s order final week that famous e-commerce firms might be allowed however didn’t particularly have talked about that non-essentials would even be allowed.
In a tweet not too long ago, Commerce minister Piyush Goyal had known as the clarification necessary for sustaining stage the taking part in subject between on-line and offline retailers. “The debate of online Vs offline is an incorrect portrayal of the ground reality. There are lakhs of sellers from the physical markets across India who also sell online. In fact, it is these medium & small offline enterprises that are powering the online e-commerce in a significant way,” IAMAI had mentioned.