New Delhi: The Indian Association of Retailers, an industry body, has applied to the Ministry of Finance for redress for the retail sector.

In its communication, the industry association called for relaxations such as a six-month moratorium on principal and interest, seeking ad hoc working capital loans from banks, and reducing the rate burden. of interest to retailers.

As part of its submission, it requested an extension of the benefits of the Emergency Line of Credit Guarantee Scheme or ECLGS 3.0 to retail businesses. “The government has extended the guarantee program of the Rs3 lakh crore emergency line of credit for an additional three months until June 30, 2021, and has also broadened its scope to new sectors, including the hotel industry, travel and tourism. RAI recommends that the Ministry of Finance also extend the benefits of ECLGS 3.0 to retail businesses. The Committee of Experts set up under the chairmanship of KV Kamath recommended financial ratios for 26 sectors in difficulty which could be taken into account by credit institutions when finalizing a resolution plan for a borrower. Corporate Retail Outlets is one of the 26 sectors selected by the Kamath panel as part of the “Resolution Framework for covid19-related Stress”. Although this was explicitly mentioned during the announcement of ECLGS 2.0, it was not clarified in the notification announcing ECLGS 3.0, ”he said.

RAI has also called for a moratorium on principal and interest for 6 months for the retail sector. In his remarks, he also called on the RBI to instruct banks to increase the working capital cap of retailers by 30% to help them pay salaries and suppliers.

“Failure to pay wages could lead to major social unrest in local areas and massive job losses. Freeing up additional working capital will prevent this. In addition to relaunching the supply chain, additional working capital will be freed up for suppliers, who will be able to restart factories and in 8 to 10 weeks, the cogs of the economy can start to move forward, ”he said. -he adds.

Finally, he requested a provision for an interest subsidy to reduce the interest burden on retailers. “To help the industry cope with the higher interest charge, interest rates on all retail loans must be reduced to an effective rate of 6% through appropriate mechanisms such as programs interest subsidy, ”RAI said.

Non-essential retailers are once again tackling a new round of shutdowns in several states that could delay recovery in the sector that employs millions of people.

“Almost 80% of retail stores are closed due to various state restrictions, and the few stores that remain open do not have footfall. Cash inflows to the sector have stalled, while costs have stalled. ‘fixed operations remain intact. With zero income retailers are still expected to pay overhead costs such as wages, electricity and rental. If the government does not provide timely relief to mitigate the financial stress, the sector will struggle to survive this second wave, ”Kumar said. Rajagopalan, CEO, Retailers Association of India.

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