Small and medium units face new chal­lenge

Sev­eral en­trepreneur­s are un­able to pay their em­ploy­ees fes­ti­val ad­vance and bonus

The Hindu - - FRONT PAGE - Sangeetha Kan­davel

With the fes­tive sea­son draw­ing near, busi­ness­men and en­trepreneur­s in the Mi­cro Small and Medium En­ter­prises (MSME) sec­tor are facing a new chal­lenge: pay­ing their em­ploy­ees fes­ti­val ad­vance and bonus.

With the fes­tive sea­son draw­ing near, busi­ness­men and en­trepreneur­s in the Mi­cro Small and Medium En­ter­prises (MSME) sec­tor are facing a new chal­lenge: pay­ing their em­ploy­ees fes­ti­val ad­vance and bonus.

With trade yet to re­vive and reach pre-COVID-19 lev­els, busi­ness­men are wor­ried. While some units are re­quest­ing their em­ploy­ees for more time, the oth­ers are giv­ing a frac­tion of the amount.

K.E. Raghu­nathan, con­vener of the Con­sor­tium of In­dian As­so­ci­a­tions, said two things hap­pen in the sec­tor dur­ing Ayudha Puja — a bonus is given, al­most onemonth salary, and a re­quest for salary ad­vance, which is an­other one-month salary. The money given varies from com­pany to com­pany and de­pends on the num­ber of years an em­ployee has worked.

“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 said. With no re­lief from the State or the Cen­tre, pay­ment of bonus and salary ad­vances are go­ing to be a big chal­lenge...,” he added.

The head of an MSME unit in Coim­bat­ore said he would be able to give only 50% of the bonus. Only 60% of his work­force re­sumed work, while the oth­ers were yet 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 said, adding the or­der in­flow was yet to pick up.

“Be­ing a small-scale industry, we want to re­tain our staff. So we are plan­ning to give 50%-60% bonus,” said K. Baskaran, sec­re­tary of the

Kakkalur In­dus­trial Es­tate Man­u­fac­tur­ers As­so­ci­a­tion. He said busi­ness was pick­ing up, but there was a huge man­power short­age.

R.G. Chakra­pani, sec­re­tary of the Thiru­mazhi­sai In­dus­trial Es­tate, said only some seg­ments were do­ing fairly well. Among them were two-wheeler, small car, trac­tor-based units. Some were 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, said, “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 said raw ma­te­rial costs had in­creased sud­denly, cast­ing a bur­den on the sec­tor.

At the Am­bat­tur In­dus­trial Es­tate, the busi­ness is bet­ter since many units are sup­ply­ing to the au­to­mo­bile sec­tor. Or­ders are com­ing in for these com­pa­nies, but pay­ments are get­ting de­layed.

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