Budget 2020: ‘Timely Recovery Of Dues Shall Boost SME Sector’

Budget 2020: Top retail players believe that government must also look at formalising debt collection mechanism to ensure timely recovery of dues which shall be an immense boost to the backbone of Indian economy, i.e. the SME sector.

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New Delhi: Hoping for a revival of the stumbling economy of the country, all the sectors are looking up to the Union Budget 2020, which is to be presented on February 1. The retail industry players are also eagerly waiting for it with an expectation of a major boost to retail operations. The sector which accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) expects the government to revive consumption and increase industrial growth. This year the budget is being presented at a time when growth has dropped to a six-year low amidst a persistent slowdown in the economy and the weak demand. “One of the other factors troubling the retail sector is the recent SC ruling with respect to Provident Fund (PF) & ESIC wherein, for employees drawing salary below INR 21,000/-pm, the added burden of deducting statutory PF & ESIC on the whole CTC & not just basic salary, as was the erstwhile industry practice, is an added cost to the company and does not add to the purchasing power of the employees who are the pulse of the Indian economy,” said Abhay Batra, the Chief Financial Officer (CFO) of Clovia, the premium lingerie brand. “Furthermore, the statutory requirement of liability to pay a bonus to all employees earning below INR 21,000/- pm under The Payment of Bonus Act, 1965, without taking into consideration the actual profits of the company and solely depending upon the number of years of operations of the Company, needs to be restricted to employees associated with the Company for a certain minimum number of years,” said Batra. “Lastly, our kudos to the introduction of the still-evolving yet promising IBC but the GoI must also look at formalizing debt collection mechanism/ time frame from proprietors/ partnerships to ensure timely recovery of dues which shall be an immense boost to the backbone of Indian economy, i.e. the SME sector,” he said.