MSME Exporters Have No Liquidity To Pay Wages For April: FIEO
People hold Indian rupee banknotes in India. (Photographer: Dhiraj Singh/Bloomberg)

MSME Exporters Have No Liquidity To Pay Wages For April: FIEO

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The Federation of Indian Export Organisations on Tuesday said the small and medium enterprises do not have adequate liquidity to pay wages to their employees for April as they are unable to conduct any business activity during the lockdown.

The apex exporters’ body reiterated that the government should immediately announce an incentive package and give permission for the partial resumption of operations in manufacturing units.

"The exporters, particularly MSME exporters, have no liquidity to pay wages for the month of April as they are unable to conduct any business activity during the lockdown," FIEO President Sharad Kumar Saraf said in a statement.

He also expressed disappointment on deferment of the decision to allow selective opening of the manufacturing sector, particularly export units.

"We were expecting some announcement in this regard in the Prime Minister's address to the nation this morning. Non-adherence to the delivery schedule for exports will result in cancellation, penalties and market loss, besides the business loss to enterprises, he added.

Also read: Motherson Sumi Board Gives Nod To Raise Rs 1,000 Crore To Enhance Liquidity

Prime Minister Narendra Modi on Tuesday announced that the current lockdown will be extended till May 3, saying it is very necessary to contain the spread of the Covid-19 pandemic in the country.

Saraf also said that the shifting of the goalpost will not help in avoiding the stark realities which exporters have to face whenever "we open".

The start of selective manufacturing units will be a long drawn battle due to the unavailability of labour, raw material, transport, Saraf said adding that even countries such as Spain, one of the worst affected nations, have started opening the economy to bring it on track.

Also read: Modi Says India Has Been Able to Reduce Impact of Coronavirus

Saraf demanded that a comprehensive economic package may be announced to help the economy, with interest-free credit to cover six months of wages, rent and utilities along with a moratorium to repay in instalments after six months.

"Without such support, the government should not expect the industry to pay wages during the lockdown and any coercive action to bring about the same will only be counterproductive," he said.

Saraf said that export community, despite facing loss, is providing groceries, mask and medical help to needy people.

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