RAI seeks capital support for COVID-hit retail industry
Retailers Association of India (RAI) has urged the government to take steps for capital infusion into the retail industry with ECLGS benefits and loan moratorium.
Kumar Rajagopalan, CEO, RAI, said: “The retail industry in India has been in a perpetual paradox ever since the first set of restrictions began last year in March 2020. The businesses and the workforce in retail need to be cushioned by the government or the local authorities to ease off their hardships.” He further said two most important and immediate steps that can prevent this industry from collapsing are to prioritise vaccination of the last mile workers and to urgently provide financial support.
RAI noted as the days of the lockdown drag on, it is getting increasingly difficult for retailers to retain employees and to keep their businesses afloat. Retailers need to pay salaries, minimum electricity, rentals, property taxes etc, even if the businesses are shut due to the lockdown.
The cash inflow of the industry has come to a standstill, while the fixed operating cost remains intact.
The immense financial stress faced by the retail sector will adversely impact both livelihood and the financial institutions exposure to the sector as retailers start to become insolvent. Millions of MSME suppliers too get no payment from the industry participants.
RAI has recommended that the Ministry of Finance and the Reserve Bank of India step in to bring some relief to the mounting stress on the retail business in the wake of second wave of COVID-19. It noted that corporate retail outlets are one of the 26 sectors, selected by the Kamath panel under the ‘Resolution Framework for COVID- related Stress.’
