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Amid the coronavirus crisis, a retail industry body has sought a grace period of 90 days to pay statutory dues, a moratorium on payment of loans, instalments, and additional working capital credit, among other things.
The country is virtually in a state of a lock-down. Several state governments have asked shops, malls and public places to close until further notice. With no revenue flow, the impact on retailers, big and small, is significant .
“Amidst a subdued demand environment, the Indian FMCG sector saw a decline in revenue growth for the fourth consecutive quarter of Q3-FY20. Analysis of 101 companies shows sales growth of modest 5 per cent in Q3- FY20, compared with 8.8 per cent in the similar period last year,” a CARE rating report on the FMCG industry suggested.
On Thursday, members of the Retailers’ Association of India’s (RAI) met a government representative to discuss the impact. It has submitted a letter seeking a few immediate relief measures from the government. “There is an urgent need for immediate economic stimulus to ensure continuity of retail stores and consumption in India,” RAI said.
Firstly, it has requested a 90-day grace period for depositing all statutory dues such as Income Tax, Advance Tax, GST, ESIC and PFfor players who are supposed make payments between March 1 and June 30, 2020.
Banks shoud announce a moratorium of 120 days on payment of instalments and interest of term loans, short-term loans, corporate loans, securitised loans, bonds, mortgages, debentures, general purpose loans effective from March 1, 2020, to June 30, 2020.
Additionally, it also wanted the banks to mandatorily provide 25 per cent additional working capital credit lines on subsidised rates, to tide over the shortfall given that revenue was not being generated during the lockdown period.
“It is important to avoid the cascading effect of cash flow in the value chain. Additional Working Capital Credit lines to be made available till September 30, 2020. Additional working capital credit lines to be paid back in 3 instalments between October 1, 2020 and December 31, 2020,” RAI said in a statement.
The industry body also asked for a relaxation on NPA reporting guidelines (accounts under default for more than 90 days are reported as NPA) till December 31, 2020 from the Reserve Bank of India (RBI).
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