Several entrepreneurs are unable to pay their staff pageant advance and bonus
With the festive season drawing close to, businessmen and entrepreneurs within the Micro Small and Medium Enterprises (MSME) sector are dealing with a new challenge: paying their staff pageant advance and bonus.
With commerce but to revive and attain pre-COVID-19 ranges, businessmen are frightened. While some units are requesting their staff for extra time, the others are giving a fraction of the quantity.
Ok.E. Raghunathan, convener of the Consortium of Indian Associations, mentioned two issues occur within the sector throughout Ayudha Puja — a bonus is given, virtually one-month wage, and a request for wage advance, which is one other one-month wage. The cash given varies from firm to firm and is dependent upon the variety of years an worker has labored.
“Currently, almost 70% of MSMEs have no additional cash left. EMI pressure is quite high. Most of the entrepreneurs paid money during non-working days during the lockdown,” Mr. Raghunathan mentioned. With no aid from the State or the Centre, fee of bonus and wage advances are going to be a giant challenge…,” he added.
The head of an MSME unit in Coimbatore mentioned he would be capable of give solely 50% of the bonus. Only 60% of his workforce resumed work, whereas the others have been but to return from their respective States. “I’m already paying salaries (a certain amount) to the migrant workers who are yet to return. If I don’t pay, they will not come back,” he mentioned, including the order influx was but to select up.
“Being a small-scale industry, we want to retain our staff. So we are planning to give 50%-60% bonus,” mentioned Ok. Baskaran, secretary of the Kakkalur Industrial Estate Manufacturers Association. He mentioned enterprise was selecting up, however there was an enormous manpower scarcity.
R.G. Chakrapani, secretary of the Thirumazhisai Industrial Estate, mentioned just some segments have been doing pretty effectively. Among them have been two-wheeler, small automobile, tractor-based units. Some have been exporting spill-over orders. “The companies which are catering to these segments are planning to pay 8.33% (one-month salary) in bonus. Other companies are planning to pay 50% of the 8.33% for Deepavali and 50% for Pongal.”
A. Shanmugavelayutham, who runs electrical transformer manufacturing units in Guindy Industrial Estate and Thirumudivakkam, mentioned, “Many units are wondering how to pay bonus. But I have decided to pay my employees and I’m working on a formula.”
Mr. Shanmugavelayutham mentioned uncooked materials prices had elevated abruptly, casting a burden on the sector.
At the Ambattur Industrial Estate, the enterprise is best since many units are supplying to the car sector. Orders are coming in for these firms, however funds are getting delayed.