Govt must protect salaries, wages of workers: P Chidambaram

Senior Congress leader P Chidambaram on Wednesday urged the government to announce a scheme to protect salaries and wages of 12 crore workers as their employers are facing a financial crunch in the wake of COVID-19-induced lockdown.

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The former finance minister also said the government should do everything to avoid a financial emergency and hoped the country is not pushed into that.

He also called upon the government to provide generous financial assistance to states to fight the novel coronavirus pandemic and urged it to announce a financial package for the MSME sector, as proposed by his party.

Chidambaram asked the government to also announce an exit strategy in view of the lockdown and look into the issue of migrants stranded at different place due to it.

"Time is of the essence. In the absence of a clear signal of assistance from the government during these extremely difficult times, the private sector will be forced to resort to large scale retrenchments and layoffs, which will devastate livelihoods of hundreds of millions of people," he said.

Chidambaram also proposed a 'paycheque protection programme' for workers in the non-MSME sector, on the lines of that announced in the United States.

"We urge the prime minister to step in urgently and announce an assistance package to protect the wages/salaries and pay cheques that are due in the next few days," he said at a press conference through video conferencing.

The April salaries of 12 crore employees working in the MSME and non-MSME sector must be protected and the government should do something about this, he said.

Asked whether the country was headed towards financial emergency in the wake of lockdown due to COVID-19, he said, "Even to utter those words at this point of time would be inappropriate. I hope we are not pushed into that."

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"If the government acts promptly, wisely and boldly by taking into account the advice of eminent economists, I think we can avoid a financial emergency. We should do everything to avoid a financial emergency. Because, financial emergency would mean that whatever little financial powers are there with the state governments would be taken away," he said.

He said the Congress party also suggests a waiver of employers' contributions to the employees provident fund (EPF) and employees state insurance (ESI), on a temporary basis, for the next three months.

"This will assist in reducing the payroll costs of employers and retaining the workforce," he said. Stressing that the the centre is non-committal on giving financial assistance to states, Chidambaram asked: "How can we have a non-committed centre in this time of grave crisis?".

Talking about the plight of workers in the MSME and non-MSME sector, he said Thursday is the last working day of the month and more than 12 crore people of India are waiting with bated breath.

"They want to know if they will be paid their salaries/wages for the month of April," he said noting that there is palpable tension and rising uncertainty among them.

Chidambaram said around 11 crore people are engaged in 6.3 crore MSMEs and since most of them have not worked a single day in April due to lockdown, how will these people feed themselves and their families without an income.

These 11 crore people's livelihoods are in danger now because most employers are unable to pay wages/salaries, he said, adding that businesses have had no sales and payments to their vendors are stuck while large swathes of private sector are faced with what economists call an extreme liquidity shock.

These businesses, he said, are unsure about their future and don't know if they can continue their businesses or will be forced to shut down permanently.

"The time to make bold decisions to save the MSMEs is now. If businesses do not see hope, they will decide to close," he said.

The Union government has to step in today to protect 11 crore Indians and give hope to MSMEs, he said noting that it is bewildering that there has been absolutely no financial package or assistance announced for businesses since the onset of COVID-19.

The government may have the luxury of time but the MSMEs do not. They need to know whether they will be helped to stay afloat and thereby pay salaries/wages to those dependent on these businesses, he said.

The Congress party has submitted a proposal with concrete suggestions for MSMEs, he said, urging Prime Minister Narendra Modi to immediately announce Rs 1 lakh crore wage protection assistance to help MSMEs pay wages and salaries for the month of April and a Rs 1 lakh crore credit guarantee fund for MSME.

For the non-MSME sector, he said, we urge the government to announce a paycheque protection programme, similar to the one announced in the United States, which is not a legislation but a financial assistance package.

Chidambaram said this would entail a total cost of Rs 15,000 crore for April month, which is not a large sum to protect livelihoods of 1 crore people who filed tax returns and paid taxes.