With the country under lockdown, and the Government yet to come out with any major support for the apparel industry, the situation is worsening. Notably, 31 per cent of apparel factories producing for domestic apparels may close down.
According to a credible source, around 92 per cent have paid wages and salaries to their workers for March. A survey of The Clothing Manufacturers Association of India (CMAI) says that 67 per cent of companies will not be able to pay wages for April, which could eventually lead to significant unrest.
And now the apparel manufacturers are worried that they may not be able to visit their factories, if wages are not paid.
“Although factories closed down on 18 March, 92 per cent of CMAI members have paid wages and salaries for the whole month of March, while companies have collected only 30 per cent of the receivable for March, leading to significant cash crunch. Many of the members have had to take loans to pay the March wages,” said CMAI.
The Clothing Manufacturers Association of India (CMAI) is the voice of the domestic apparel industry.
The association demands for 50 per cent wage subsidy up to Rs. 5,000/- per month for 5 months from March 2020 to July 2020. It has also requested for PF & ESI contribution of employer and employee to be done by Government for 3 months (March to May 2020) for employees drawing wages not more than Rs. 15,000 with no cap on the number of employees in the company.
Its other demands include interest subvention of 5 per cent on total borrowings and 25 per cent additional working capital to be made available on a mandatory basis (not to the option of the bank), subject to available drawing power on revised norms and moratorium on term loans and working capital loans should be extended to 6 months.
Similarly, apparel manufacturers should get a waiver of minimum demand load charges for 4 months from March 2020 to June 2020. Besides, it’s been requested that the State Government should waive electricity duties for 4 months. The Government has also been requested to allow additional 90 days for depositing GST dues for March and 30 days for GST for May and June 2020.
“Immediate support on direct wage transfer or mandatory disbursement of the working capital loan is required on an SOS basis,” CMAI insisted.
