Restart terms unclear among owners of retail stores
Owners of retail stores want a coordinated effort between the central and state government on resumption of business if the lockdown is not extended beyond May 3, 2020.
The eastern India members of the Retailers Association of India on Wednesday sought clarity from the government on the operating procedures if businesses are allowed to resume work. “There should be clear guidelines on resumption of operations,” said Tejash Shah, chief financial officer of Baazar Kolkata, in a webinar held by the association.
He added that directions should not come just before lifting the lockdown. A draft guideline should be circulated by the government in advance so that there is adequate time to form a strategy and ensure safety and compliance, he said.
Liquidity being a major concern of many daily cash dependent retailers, the lockdown has presented two major challenges — managing overhead costs such as salary and rents and payment of interest on term loans and overdraft.
The members of the association are in favour of a subsidised rate of interest and not just a plain moratorium. “Managing interest cost is a big challenge at present,” said Siddharth Pansari, director of Primarc Projects.
According to Shah, not all retailers are sitting on surplus cash all the time but statutory expenses have to be incurred. For that retailers may have to either depend on credit lines that raise the interest burden or promoters may have to step in and bring in equity capital at some point.