India’s small businesses struggle to pay wages amid coronavirus lockdown
Hundreds of thousands of cash-starved Indian small businesses have either deferred or cut their workers’ wages this month, say industrialists and union leaders, amid a 21-day nationwide lockdown to stem the spread of the coronavirus pandemic.
All India Manufacturers Organisation an industry body representing some 100,000 small manufacturers – said more than two-thirds of its members faced problems in paying salaries on Tuesday, the usual day for paying monthly wages.
“We have no funds to pay wages,” said K.E. Raghunathan, former national president of AIMO, who runs a solar parts’ manufacturing unit in the Southern Indian city of Chennai.
“Our first priority is to pay electricity bills, rent, bank loans and social security contributions of employees,” he said, adding that they faced delays in payments from clients, including the government.
Federal and state governments and state-owned companies owe more than $66 billion to small businesses, the government told parliament last month.
India’s nationwide lockdown, set to end April 14, has left millions of migrant workers stranded without any other source of income. And officials have warned that some states may extend the lockdowns as coronavirus cases rise.
India has so far recorded more than 4,200 coronavirus cases a death toll of 114 people.