AEPC urges Centre to pay April, May wages of apparel sector workers, Retail News, ET Retail

New Delhi : The Clothing Export Advertising Council (AEPC) on Monday wrote to the Prime Minister urging the governing administration to pay out the wages of staff engaged in the clothing exporting marketplace for April and May well to bail out the sector amid the coronavirus disaster.

AEPC Chairman A. Sakthivel wrote in the letter: “We humbly desire to inform that we are not in a position to pay out wages for the months of April and May well in spite of our most effective intention, as there is totally no output and no profits stream.

He also knowledgeable Prime Minister Narendra Modi that the marketplace has cleared all wages for March dutifully.

According to Sakthivel, the governing administration can pay out wages from the funds obtainable in the Atal Bimit Vyakti Kalyan Yojana (ABVKY) Plan, which has reportedly substantial reserves of about Rs ninety one,000 crore, as contributed by employees and employers.

Sakthivel mentioned that the clothing exporting marketplace, which is a important employer, has been quite badly impacted owing to COVID-19 as principal export marketplaces of the US and Europe are less than lockdown due to the fact the past a number of months.

The sector urgently wants a huge stimulus bundle from the governing administration, he mentioned.

“Potential buyers have not paid us for goods shipped months ago. On leading of that they have cancelled or postponed deliveries of existing orders. Total, we estimate a reduction of export of around $4 billion. Coupled with this, the lockdown in our region has also resulted in full stoppage of perform,” Sakthivel mentioned.

Clothing items exported to the style shops of the globe have a shelf everyday living of two-four months only and thereafter they provide at deep bargains, as for every the marketplace overall body.

The letter knowledgeable that the potential buyers are either not paying out or inquiring for significant bargains for merchandise previously shipped. Some have cancelled confirmed orders and some have postponed with bargains, it mentioned.

Sakthivel mentioned that the clothing exporting marketplace is highly labour-intense where the wage invoice is about thirty for every cent of the products price tag, whereas in other sectors it ranges around five for every cent. He also mentioned that the clothing sector performs on quite very low margins of 4-five for every cent.

Sakthivel mentioned that sector players are not only struggling with an acute fund crunch, like a lot of other industries, but are also incurring substantial losses owing to cancellations and bargains.

This, coupled with the simple fact that there is no profits generation in the course of the lockdown, will guide to the closure of a lot of factories and for that reason outcome in substantial career losses, he mentioned, including that it has come to be incredibly tough to economically survive in these hoping periods.

“A issue of immediate worry is payment of wages to staff. We have been conveying to our users the require to pay out wages as for every statutory/moral obligation. On the other hand, the feedback we have received from the the vast majority of exporters is that in spite of most effective intention to pay out there is just no liquidity obtainable to pay out,” Sakthivel wrote.