Businesses in India face issue in movement of raw materials

Although Centre has allowed operations in several sectors, although partial for some, and state governments have also communicated the resumption guidelines for economic activities, businesses are facing difficulties in movement of workers and raw materials to commence their operations, according to a nationwide survey by CII.

Chandrajit Banerjee, Director General of Confederation of Indian Industry said: “The Confederation of Indian Industry (CII) survey indicates that permits for enterprises, passes for workers and supply chain movement are the key hurdles for industry in exit from lockdown.

He said that the industry body has suggested that in non-containment zones, businesses should be allowed to function without requirement of permits and only through intimation to local authorities.

Workers can be permitted to commute on the basis of a letter issued by the employer organisation, with the facility to travel on their own vehicles, Banerjee said.

CII conducted the survey to determine the effectiveness of the exit from lockdown in specified zones and sectors and elicited responses from across the country, covering many sectors and enterprises of all sizes.

The survey showed that as many as 39 per cent of respondents claimed that there was disruption and delay in movement of inputs and finished goods for operations, whereas 23 per cent stated that materials were not available at all. Only 15 per cent businesses in the sample felt that the movement of goods was timely.

The survey was carried on respondents from across sectors, states and scales, a CII statement said.

Regarding movement of workers, as many as 42 per cent of respondents in the survey stated that passes for employees are delayed or not available. Similarly, two-thirds of those surveyed pointed out that transportation of employees between the workplace and home is an issue.

As a result, the employee strength of 58 per cent of enterprises was below 25 per cent, with less than one-tenth respondents having an employment strength of more than half. This also indicated that social distancing norms are being followed, according to the statement.

“The CII survey confirms that return of workers is critical to commencing business operations. Timely and effective transport and safety strategies are imperative to ensure that workers have the confidence to return to workplaces as well as commute on a daily basis,” said Banerjee.

A majority of respondents stated that guidelines issued by the Ministry of Home Affairs on April 15 and 16 on operational zones in rural and urban areas are clearly communicated by state governments.

Around 57 per cent respondents agreed that they had clarity, while 28 per cent noted that partial information was available. Only 15 per cent stated that incomplete or no communication was made available, noted the CII survey. For sectors allowed to function, 46 per cent of the Confederation of Indian Industry surveyed enterprises said that permits are either not provided or are delayed.

Over two-fifths of respondents received permits smoothly. Confederation of Indian Industry recommended that approvals of applications must have clear mandated deadlines with a provision for automatic permits after the specified time.

The survey also showed that that the majority of firms are operating at less than 25 per cent of their full capacity, with just 10 per cent having plant utilisation of over 50 per cent.

The Confederation of Indian Industry is an industry association in India. CII is a non-government, not-for-profit, industry-led and industry-managed organisation.

Meanwhile the Indian Revenue Service Association (IRSA) has suggested the imposition of wealth tax on the super rich, with net wealth at least Rs 5 crore and a one-time COVID relief cess of 4 per cent.

Titled Fiscal Options & Response To COVID-19 Epidemic (FORCE), the report of recommendations on revenue mobilisation amid the coronavirus crisis said that in times like these, the so-called “super richa have a higher obligation towards ensuring the larger public good”.

The tax officers’ body said they can be taxed through two alternative means, for a limited, fixed period − 3-6 months. It noted that the super rich enjoy a higher capacity to pay with significantly higher levels of disposable incomes compared with the rest. Also, they have a higher stake in ensuring the economy springs back into action, and their current levels of wealth itself is a product of the social contract between the state and its citizens.

Agencies