PANAJI
Since the announcement of a nationwide lockdown last year on March 24, it is the retail sector that is the worst hit. After a year, as it was now barely managing to revive, when the second wave of the pandemic hit, making survival difficult for the retail sector. As the Covid is more intense this time, strict curfew restrictions are being implemented, with the daily essential outlets allowed to remain open from 7 am to 1 pm only.
Pointing out these facts, the Goa Chamber of Commerce and Industry (GCCI) has appealed to the State government to offer some relief to the retail sector. In a letter to Chief Minister Pramod Sawant, Manoj Caculo, president, GCCI, has recommended a ‘retailer relief package’ to the small retail businesses, offering exemptions/waivers from all applicable levies, taxes levied by the State government.
The letter suggests that the government should issue instructions to corporations, municipalities, panchayats and other similar entities, which collect taxes like house tax, property tax, sanitation tax, trade occupation licences, to exempt/waive such taxes from April 2021 to August 2021, as immediate relief. This relief can be offered till normalcy is attained, requests the GCCI president.
“A notice regarding this to be issued soon and a suitable processing mechanism should be put in place and declared. The credit adjustments to be done in case these are paid in advance,” demands GCCI.
The second recommendation is for the Economic Development Corporation (EDC) to work out special loan packages to assist retail businesses. “Such loans should be collateral-free and at maximum secured against the inventory/debtors. Such loans should be given at a lowered rate of interest and longer-term. If possible, these loans could be provided with a guarantee by the government of Goa so that other banks could participate as well,” suggests Caculo.
Pointing out that the retail sector works on margins and volumes which inherently makes their business model fragile, and to remain afloat, it needs consistency of business hours, a certain number of footfalls, conversions and spending power and optimism from the consumers, GCCI president states, “On the other hand it has to pay wages, rent, taxes, corporation levies, interest on borrowing, cash flow for purchases, credits, huge maintenance cost.”
All these are almost constant irrespective of business, which implies that with the current curfew and its extension the cash inflow of the retail sector has come to a standstill, while the fixed operating costs remain intact, states Caculo.
“With zero revenues, retailers are still expected to pay overheads such as salaries, electricity, taxes and rentals. If a timely relief package is not provided by the government to ease the financial stress, then the retail sector will find it hard to survive this second wave factoring that they have barely managed to survive the first wave,” fears GCCI.
With retailers and malls facing various restrictions across States due to the second pandemic wave, there is a pressing need for urgent intervention to prevent the sector from slipping into irretrievable financial damage, concludes GCCI letter.
