High rents of mobile retail shops on main roads and employees salaries is becoming a big challenge as the month end is approaching near. Most of the mobile retailers tensions are increasing as they are not able to take the right decision at this time when shops are closed and earnings are zero. If the salaries are not paid then there is a question of survival for employee and looking to another side if salaries are paid then firms will come under trouble.
The payment of salaries, rent, and clearing of stocks, are issues that need to be addressed one-by-one. Most of the retail mobile shops have paid March salaries but the challenge is to pay the April salaries. The retailers are approaching their landlords to defer rent payment. If firms are struggling to pay the rent while the shops are kept open, how will they pay the rent when the shops are closed is a question.
Looking to this, The All India Mobile Retailer Association (AIMRA) has urged the government to offer a stimulus package including support of salary, relaxation in rent, bank credits and other fee waivers to rescue 30,000 sellers from bankruptcy at a time when business is closed for the segment which already runs on thin margins. AIMRA representing more than one lakh mobile retailers across the country approached the Minister of finance for India Nirmala Sitharaman for package to survive in this crisis related to COVID-19 by avoiding job losses as mobile industry is is already affected with unethical competition from e-commerce players.
The letter to the finance minister on 23rd April stated “To waive off the interest on loans for the lockdown period with a 3 months postpone till 30th September and no penalties or there should be no interest collected while filling of GST compliance on June 30th. Banks should extend a credit facility of Rs.10 lakh @ 5% annual interest without collateral for two years to every mobile retailer who is registered under GST, and credit of Rs.25 lakh to Rs.1 crore to those who have been in business for more than five years @ 5% with 50% of the collateral should be allowed.
The credit rating should also not get affected due to the bouncing of post dated cheques during the lockdown. AIMRA also requested a waiver of fee levied on merchants while executing card payments and zero-cost EMI for buyers to boost cashless payments post lockdown. NBFC’s and Banks should waive off digital payment charges i.e DBD (dealer by down) and MDR (merchant discount rate) charges on paper finance and on digital transactions for at least 6 months post lockdown. Retailers are paying DBD charges of 1.5% to non-bank companies on financing mobiles and MDR commission of 1.5% to 3.5% on different credit cards for digital transactions.
Association also requested to bring a government advisory for landowners to refrain from declaring force measures for rental agreements. Landlords should be assured that for not taking rent during the period of lockdown, they will be reimbursed by the government from GST subsidy over a span of 3 years” .
So, definitely there is a need for mobile retailers, associations as well as government to act immediately for the well being of the entire retail community, and without government intervention it could be too difficult to handle.