CMAI Asks For Govt Support To Pay Wages, Maintain Employment, Prevent Bankruptcies


The Clothing Manufacturers Association of India (CMAI) has written to the Ministry of Labour And Employment, for support in payment of wages and salaries to workers.

The letter to Santosh Kumar Gangwar, Minister of State for Labour and Employment, draws attention to the structure of the domestic garment manufacturing industry, where 90% of the units are in the MSME sector, of which more than half are in the micro segment. The sector employs close to 12 million workers, 40% of which are women.

“COVID-19 has plunged the industry into a crisis of unprecedented proportions, threatening the very survival of many of our smaller manufacturers. In a recent survey conducted by CMAI, it has emerged that at least 20% of our members believe they may consider closing down their business, unless some Government assistance is provided,” the letter states.

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CMAI informed that the revenues of its members have come to a total halt  for the last 30 days and is likely to remain so in the coming 60-90 days. “On the other hand, the government has issued advisories that enterprises must pay full salaries and wages to all workers, and that no employee should be out of employment. This is why the garment Industry with great difficulty managed to pay the March salaries to its employees. However, going forward, in a situation where there is no income for such an extended period, it will be impossible for many of our smaller members to continue paying full salaries and wages, unless we receive some government support,” CMAI has pleaded.

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The letter further states, ”As a representative of one of the most important employment generating industries, CMAI urges both, the Central Government as well as the states, to come up with innovative ways of protecting the interests of the workers without causing irreparable losses to the industry and possibly leading to massive financial bankruptcies in the MSME sector.”

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  1. Recently our bankers IDFC Bank have informed us that the Interest Equalisation Scheme of 5% on Pre and Post Shipment Rupee Export Credit has not been extended by the RBI from 1st April 2020 onwards. The Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit was introduced under RBI Directives – RBI/2015 -16/259 Dated 4th December 2015 amended from time to time and was valid up to 31-03-2020. Hence our Bankers IDFC Bank will now start charging us about 12% interest on Rupee Export Packing Credit Account.
    The Bankers need a proper notification from RBI, without which they shall start charging us about 12% Interest.


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