Over 70% small businesses look at cutting jobs to sustain themselves: AIMO Survey – The Economic Times

Clipped from: https://economictimes.indiatimes.com

On the issues likely to be faced during the Unlock 1.0 period which began this week , the survey covered various aspects such as visibility of demand, collection of pending dues , raw materials , future EMI payments along with present interest burden and salary issues.

NEW DELHI: More than 70% of micro, small and medium enterprises (MSMEs) and 40% corporates intend to cut back on their workforce in order to get their business back on track, a survey by All India Manufacturers Organisation (AIMO) has revealed.

Only less than 20% of all the categories said they would continue with the same headcount, said the survey which had over 46,000 respondents.

“The extent of the job loss will be more clearer by the end of August’20 , as most of the respondents were in process of gauging how many of their labour will return and also they are currently gauging the optimum employee strength required to sustain their business in the near future,” said K E Raghunathan, immediate past president, AIMO.

On the issues likely to be faced during the Unlock 1.0 period which began this week , the survey covered various aspects such as visibility of demand, collection of pending dues , raw materials , future EMI payments along with present interest burden and salary issues.

India went into a complete lockdown for three weeks on March 25, in a bid to tackle Covid-19. Businesses have been allowed to open with restrictions since, but have struggled to fully get back in action, even as the lockdown rules continue to remain in force.

The biggest concern of 36% of self-employed were their ability to pay EMIs as they had issues with pending collections for work done earlier and also the receipt of new orders and profitable prices for the business, said Radhakrishnan, Treasurer of AIMO.

“The job market has also tanked with most companies freezing their recruitments for the near term. The future of their livelihood and the existence of the families that depend on them is in a very precarious position for most of the MSME entrepreneurs” Radhakrishnan said.

The Corporate respondents however had manpower concerns, raw materials sourcing and price management, and demand in terms of new orders dominating their set of challenges for the next three months.

“One of the prominent suggestion from the respondents are offering Raw materials under Ration card like PDS to MSME through the government of India undertaking National Small Industries Corporation ( NSIC) on credit and reasonable price immediately and also allow banks to accept bill discounting facility for all sales invoices raised in the next 3 months , irrespective of the party being billed “ Raghunathan said.

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