Salaries amid coronavirus: The question of industry, when there is no income, then how can you give salary? – industry in distress says, how do we keep paying salaries with no cash flow

Sujata Kushwaha | Economic Times | Updated:


  • Companies say that their income is decreasing or not earning at all
  • It is not even being compensated by measures like loan waiver
  • Companies said, difficult to follow government directive amidst very low cash flow
  • The industry says that the problem may not be solved by this step.

New Delhi / Gurugram / Mumbai / Bengaluru

It is becoming increasingly difficult for companies to comply with the instructions given by the government not to stop workers’ wages during the economic crisis emerging from the effects of the Corona virus. In some cases, companies are no longer in a position to follow it. Companies say that their income is decreasing or not earning at all and it is not even being compensated by measures like loan waiver.

Industry is seeking government help

People associated with the industry say that they need more help from the government. The Labor Ministry plans to increase the employment benefit through the Employees’ State Insurance Scheme, but the industry says that the problem may not be resolved by this step.

There is no legal basis!

The industry is also questioning whether the government’s directives have any legal basis or not. For example, the Disaster Management Act does not provide any legal basis for continuation of salary payments. With this, the problem of workers not coming to work has also been added. The government had directed that whether the worker came to work or not, his salary payment should not stop. Labor shortages in some product categories may soon lead to supply constraints.

Will you get help from the government?

ET spoke to industry executives, entrepreneurs, MSME owners and business organizations for the story. Many of them responded on condition of anonymity. Most companies agree with the government’s opinion that workers should not be allowed to suffer in this crisis, but they are also questioning whether they will get additional government assistance in terms of cash flow to fulfill this responsibility of welfare.

Need a ‘big fiscal package’

Assocham Secretary General Deepak Sood said, “pressure on working capital is increasing” and the industry is hoping that “banks can help by going beyond the concessions given by RBI”. Sood said the industry also wants a ‘big fiscal package’. CII President Vikram Kirloskar said in a statement, ‘It is very important that we do not lay off’ but the cost issue is a matter of concern.

Will the government pay salary?

Small companies struggling with cash flow are talking more frankly. S Singla, who runs a plastic tank factory in Baddi, Himachal Pradesh, said, ‘The government can say anything. Will she pay salary? We operate on very small margins. We have to lay off 20% of the workforce. ‘

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