New Delhi: Industry body Confederation of Indian Industries has asked its member companies not to lay off their employees, its president Vikram Kirloskar said Thursday amid the coronavirus outbreak causing economic slowdown globally.
Kirloskar’s remarks come against the backdrop of mounting concerns that companies, including in India, could resort to retrenchment due to sluggish demand and various restrictions in place to curb spreading of the coronavirus infection.
Observing that ‘times are challenging’, Kirloskar said the industry has sought a moratorium on all loan repayments and urged the Reserve Bank of India (RBI) to cut interest rates and increase liquidity in the system.
“We are requesting our members to hold on to their staff and not do layoffs as far as possible and take care of small service providers as far as possible,” Kirloskar said Thursday.
CII had 9,325 companies as members at the end of 2019.
Among other sectors, the airline industry is one of the worst hit by the outbreak. GoAir has asked many employees to go on leave without pay on a rotational basis and has also terminated services of expat pilots. The country’s largest carrier IndiGo has announced pay cuts and debt-laden Air India too is considering a similar step.
“If I compare with the rest of the world, I think our government has done a wonderful job,” Kirloskar said, and suggested that the government should do more to support the economy as India’s supply chains have been hit, impacting exports.
Elaborating on what the industry wants from the government, Kirloskar said: “We have requested for support such as moratorium on loan repayments. Besides, both central as well as state governments should clear pending dues to micro, small and medium enterprises as fast as possible.”
Earlier this week, RBI hinted at a rate cut but stopped short of a decision, belying market expectations at a hurriedly called presser, even as it announced some liquidity enhancing measures to contain the economic fallout of coronavirus.
Kirloskar further said to deal with the contagious virus, industry has started talking about virtual board meetings so that business could go on without taking any health risk.
Meanwhile Indian Chamber of Commerce (ICC) said it has conducted a quick survey among its members and various suggestions were offered by the industry have been shared with the government for consideration. It said at this time, a stimulus is needed which can increase the spending power of consumers.
According to ICC, the suggestions include allowing all firms to restructure loans for one year without any additional charges by banks for provisioning etc. The industry has also recommended that the RBI may relax NPA (non performing assets) norms for six months, so that no default will be eligible for being termed as an NPA account.
PTI