RAI urges govt to extend ECLGS benefits to retailers

RAI urges govt to extend ECLGS benefits to retailers [ad_1]

Retailers Association of India (RAI) on Wednesday requested Finance Minister Nirmala Sitharaman to extend benefits of emergency credit line guarantee scheme to retailers whereas looking for a moratorium on principal and curiosity of all loans for up to 6 months stating that curbs due to the second wave of COVID-19 have crippled the sector.

Putting ahead a sequence of calls for, RAI stated round 80 per cent of the retail shops are closed due to numerous restrictions throughout states and virtually Rs 75,000 crore may flip NPA if pressing measures to ease the working capital challenges usually are not taken by the Reserve Bank and the Centre.

“Retail businesses across the country are among the worst hit as several states have mandated lockdown of malls and shopping complexes where most modern retailers operate. The industry is finding it hard to survive through the immense financial stress that is threatening to derail businesses,” RAI stated in a press release.

In a submission to the Ministry of Finance, RAI stated it has really helpful that the ministry and the Reserve Bank of India step in to carry some aid to the mounting stress on the retail companies within the wake of the second wave of the pandemic.

It requested the ministry to extend benefits of emergency credit score line assure scheme (ECLGS) 3.0 to retail firms as effectively, saying the provision of further funding facility to the eligible retail enterprise will go a good distance in contributing to their revival, defending jobs, and making a conducive surroundings for employment technology.

Seeking a moratorium on principal and curiosity on loans for six months, RAI stated the retail sector “represents an investment of Rs 2,50,000 crore and almost Rs 75,000 crore could turn NPA if urgent measures to ease the working capital challenges are not taken by the Reserve Bank of India and the Government of India.”

It additional stated,”This will put at risk almost 3 million jobs directly in the retail sector. Associated sectors that depend upon retail would also be similarly impacted. In the textile sector alone, across the entire value chain almost 10 million jobs are at risk. Further, it will extinguish the engine that can kick-start a consumption led recovery for our economy.”

In order to assist the retail business take care of the upper curiosity burden, RAI stated rates of interest on all loans to retail business should be diminished to an efficient fee of 6 per cent via appropriate mechanisms resembling curiosity subvention schemes.

RAI additionally requested RBI to instruct banks to enhance the working capital restrict for retailers by 30 per cent to assist them pay salaries and suppliers.

Commenting on the problems confronted by the retail business at current, RAI CEO Kumar Rajagopalan stated, as of now, virtually 80 per cent of the retail shops are closed due to numerous restrictions throughout states, and the few shops that stay open would not have footfall.

The money influx of the business has come to a standstill, whereas the fastened working prices stay intact, he added.

“With zero revenues retailers are still expected to pay overheads such as salaries, electricity and rentals. If a timely relief package is not provided by the government to ease the financial stress, then the industry will find it hard to survive this second wave,” Rajagopalan stated.

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