: Garment sector MSMEs fear more drop in demand, says CMAI survey #FinanceIndia #StockMarketNEWS New Delhi, Mar 31 (KNN) Despite several measures announced by the government, domestic garment industry,

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Garment sector MSMEs fear more drop in demand, says CMAI survey #FinanceIndia #StockMarketNEWS
New Delhi, Mar 31 (KNN) Despite several measures announced by the government, domestic garment industry, especially its Micro Small and Medium Enterprises (MSME) fear more drop in demand, said the Clothing Manufacturers Association of India (CMAI) in its survey.

CMAI conducted a survey amongst its members to get a sense of how the Members were facing up to the current circumstances and how they were forecasting the period after lock-down is lifted.

As per the survey, demand in apparels may shrink by almost 40 per cent in 2020.

Over 1500 CMAI members with sales of about Rs. 60,000 crores and employing 400,000 plus people, have reported that there could be more than 40 percent drop in demand after the lock down. Based on this, CMAI which has close to 4000 members primarily in the Domestic Branded Apparel Manufacturing, believes that the Domestic Apparel Industry could take a hit of almost 1 lac crores due to the lock down and the expected significant slowdown in economic growth once the lock down is lifted, said the survey.

CMAI in its survey also mentioned that only a comprehensive support package from Government can cushion the potential collapse of the Industry.

Wage subsidy and Working capital support for the long working capital cycle is the need of the hour, CMAI added.

The survey further indicates that there could be job losses upto 1 crore.

The estimated drop in sales would mean that almost 50 lacs jobs in the Apparel Industry are at risk. With a global slow down, and the cascading effect on other sectors of the Textile Industry, almost 1 crores job may be lost in Textiles and Apparels alone, survey added.

Eventually, the clothing body, appealed to government to consider the following in order to deal with the current scenario.

-- (1) 50 percent Wage Subsidy up to Rs. 5,000/- per month for 5 months from March 2020 to July 2020

-- (2) PF and ESIC Contribution of Employer and Employee to be done by Government for 3 months (March to May 2020) for employee drawing wage not more than Rs. 15,000 with no cap on number of employees in the company.

-- (3) All Banks to offer Interest Subvention of 5% on total borrowings.

-- (4) 25 per cent additional Working Capital to be made available on a Mandatory Basis (not to the option of the Bank), subject to available Drawing Power on revised norms.

-- (5) While RBI has already allowed 3 months Moratorium on Terms Loans and Working Capital Loans, considering the long working capital cycle, this needs to be extended to 6 months. Further, Purchase Bills Discounting and Letter of Credits dues must also be given the 90 days Moratorium.