Covid lockdown: Can’t pay salaries, say labour-intensive sectors

NEW DELHI: Labour-intensive sectors such as garments, powerloom, handicraft and sports goods have said that they are in no position to pay their employees the salaries for April and May, and suggested the government use funds available in the Atal Bimit Vyakti Kalyan Yojana (ABVKY) Scheme, Employees’ State Insurance and labour funds to pay wages. Manufacturers and exporters say small units may end up shutting shop as many states prohibit salary cuts and dismissal of employees.

While there are around 5 million direct workers in the powerloom sector, the direct employment in handicraft is around 400,000 and overall around 4 million.

“While we agree with the government that wages should be given, the minimum wage of Rs 8,000-9,000 per worker will be tough to sustain as we don’t expect business to resume for the next two months since orders have dried up and there is no production neither are there buyers,” said Purushottam K Vanga, director at Powerloom Development and Export Promotion Council.

Of the country’s 2.4 million powerlooms, Maharashtra alone has 1.3 million, of which 70% are small units with 8-12 workers.

The Garments Exporters and Manufacturers Association (GEMA) has said it is not in a position to pay wages for April and May to workers engaged in the apparel sector following a disruption caused by coronavirus forced lockdown in the country.

“We humbly wish to inform that we are not in a position to pay wages for the months of April and May despite our best intention,” said GEMA president Vijay Jindal, adding that the garment industry is labour intensive and 30- 35% of revenue forms the salary part.

Manufacturer exporters say the recent advisory of the government that wages must be paid by employers even during the lockdown period will push the labour-intensive industry deeper into the crisis and many would close the units citing inability to pay wages.

Source Article