The Confederation of All India Traders (CAIT) has appealed to the PM to come to the rescue of the business community and to provide them with a financial package.

Street with shops closed as part of lockdownImage for representation
Money Trade Wednesday, June 02, 2021 - 17:20

The Confederation of All India Traders (CAIT) on Wednesday said the country’s domestic trade has suffered massive business loss to the tune of about Rs 15 lakh crore in the last 60 days due to the coronavirus second wave and the subsequent lockdowns by various states. The CAIT also emphasised that for the first time, traders across the country are contemplating reducing the number of employees as they have been forced to cut down on establishment expenses and overheads due to the non-affordability of the recurring monthly expenses. If this happens, it will increase the unemployment figures particularly when retail trade in India has been described as the only source of disguised employment and the only sector which provides exponential streams for self-employment in India, the CAIT noted. 

“Based on the estimated feedback gathered from CAIT chapters and leading trade associations in the majority of states, the loss of internal trade and commerce due to COVID-19 second wave for the country stands at about Rs 15 lakh crore, which is quite a huge and substantial loss as the total value of the domestic trade in the country is estimated at Rs 115 lakh crore per annum,” said BC Bhartia, national president and Praveen Khandelwal, secretary-general of CAIT. 

There are about 8 crore small businesses in the country that are involved in trading activities, providing direct employment to about 40 crore people and various other people who are dependent on the trading community for earning their livelihood. Bhartia and Khandelwal said that out of the total business loss of about Rs 15 lakh crore, the retail format has lost Rs 9 lakh crore while wholesale trade in the country suffered a loss of about Rs 6 lakh crore. It is estimated that Maharashtra suffered business loss of about Rs 1.5 lakh crore; Delhi about Rs 40,000 crore, Gujarat about Rs 75,000 crore; Uttar Pradesh about Rs 85,000 crore; Karnataka about Rs 70,000 crore, Tamil Nadu about Rs 80,000 crore and likewise, the other states have also incurred substantial business loss during the past two months. 

CAIT said that it should be mentioned that lakhs of people are conducting business activities in informal trade and they have also suffered huge business loss on account of the closure of shops and markets. Similarly, lakhs of skilled and semi-skilled workers, popularly known as " karigars" involved in jobs for producing finished goods and supplying to traders, have also been greatly affected.

Both Bhartia and Khandelwal said that due to the severity of the financial crunch this time, traders across India are seriously contemplating releasing at least 30-40% of their workforce as they cannot afford to pay their salaries anymore. Whatever savings traders had, they were consumed in last year’s lockdown and while the domestic trade of the country was on the verge of recovery, the business was attacked by a second wave of the coronavirus pandemic and the traders are now largely eating into their own capital, the CAIT said. Economic theories have taught us that "when you start eating the capital in your business, you must realise that your business is on the way to downfall and immediate preventive actions are needed”, the trade leaders said. Therefore, traders across the country will have no option but to cut down their business expenses, including downsizing the workforce, they added. 

"We appeal to the Prime Minister to come to the rescue of the business community and give us a substantial financial package to restore business activities post lockdown. We are not asking for any loan waiver but the support policies from both Central & state government, temporary relaxations in statutory compliances, and ease of restoring business,” Bhartia and Khandelwal added. However, while drafting such a package, the traders must be consulted, the trade leaders said. The two leaders stated that the traders are not the responsibility of the Union government alone but state governments are also liable for traders of their respective states, and the states should also devise a similar package for the trading community.