Welfare corporation explores alternative business models
LUCKNOW: With the new tax regime bringing an end to tax exemptions on goods bought by state government employees and pensioners at its outlets, the UP Employees’ Welfare Corporation has begun exploring alternative business models to save the jobs of its 850 employees.
These employees are engaged in running the corporations’ 160 depots and 17 family bazaars across the state to sell tax-free consumables and other goods of daily use to government employees and pensioners.
The corporation, a self-sufficient body established in 1965, has been writing to the state government before the new tax came into being, requesting it to make efforts aimed at allowing the corporation to continue purchasing tax-free goods and sell the same to government employees at subsidised rates through its depots and family bazaars post- GST.
“The government is yet to take a call on our request,” corporation’s executive director Ashok Srivastav said.
“But, in the meantime, we have begun looking for alternative business models to keep our depots and family bazaars going, thereby saving the job of the staff engaged in running them,” he said.
“The alternative models could be many wherein the companies/ dealers could provide us with subsidised goods under a mutual agreement and we could make the same goods available to government employees and pensioners at a rate below the market price as many stores like Big Bazaar do,” he said. “Discussions with some companies are on in this regard,” Srivastav said.
What makes it even more urgent for the corporation to find an alternative business model at the earliest is the fact that the 850 employees engaged in handling corporation’s depots and family bazaars get their salary as a share from the profit that the corporation earns from selling the subsidised goods. “We are managing to pay the salary for July anyhow though our depots and family bazaars are doing no business since the new tax became effective from July 1. But it will become difficult for us to reimburse salaries from next month if alternative arrangements are not made,” said another official.
The state, on its part, has forwarded the corporation’s proposal seeking exemption on sale and purchase of goods to the GST Council. “There is little possibility of the Council agreeing to the proposal more so when even army canteens have been deprived of the facility, even if partially,” they said.