Apparel exporters body AEPC on Monday urged the government to pay wages of workers, engaged in the sector, for April and May as the community is battling to deal with the lockdown due to Covid-19.
In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the government can pay wages from the funds available in the Atal Bimit Vyakti Kalyan Yojana (ABVKY) Scheme, which has, "as understood, huge reserves of about Rs 91,000 crore, as contributed by employees and employers".
"We humbly wish to inform that we are not in a position to pay wages for the months of April and May despite our best intention, as there is absolutely no production and no revenue stream," Sakthivel said, adding the industry has cleared all the wages for March.
He also said the apparel exporting industry, which is the largest employer after agriculture, has been badly impacted due to Covid-19 as principal export markets of the US and Europe are under lockdown since the past several weeks.
"The sector urgently needs a big stimulus package from the government," he said, adding "buyers have not paid us for goods shipped months ago. On top of that they have cancelled/ postponed deliveries of current orders. Overall, we estimate a loss of export of over USD 4 billion".
He said global buyers are either not paying or asking for hefty discounts for merchandise already shipped.
Sakthivel said that the industry is highly labour-intensive where the wage bill is about 30 per cent of product cost, whereas in other sectors it ranges around 5 per cent.
"Our members are not only facing an acute fund crunch, like many other industries, but are also incurring huge losses due to cancellations and discounts. This, coupled with the fact that there is no revenue generation during the lockdown, will lead to the closure of many factories and consequently result in huge job losses. The industry is collapsing and looking for the much-needed ray of hope and support to survive and sustain," he added.
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