NASSCOM seeks financial relief from govt for industry amid crisis

NASSCOM seeks financial relief from govt for industry amid crisis
Photo Credit: Pixabay
9 Apr, 2020

The National Association of Software and Service Companies (NASSCOM) has sought financial assistance and other measures from the government for industry employees during the Covid-19 crisis. 

The trade body has requested that the government pay a partial salary to benched employees, extend the recently-announced provident fund (PF) benefits to include more employee segments and permit units that operate under the Special Economic Zones (SEZs) to work from home beyond the current allowance of April 30. 

The lobby body had earlier asked the government to allow for flexibility in specific policies for information technology (IT) companies working out of SEZs and Software Technology Parks of India (STPI), as it was critical for business continuity. While employees of these companies are typically not allowed to work from home, the government relaxed the rule till April 30, in view of the Covid-19 lockdown.

India-based companies also have large operations in the European market, which contribute about 25% to their revenues, it said. Thus, it was necessary for SEZ rules to be amended to allow employees to work from home as they service customers across the world, it added.

Additionally, NASSCOM said the government could pay a minimum wage along with statutory entitlements to bench employees. The trade body cited a furlough scheme in the United Kingdom as an example. In the country, companies can furlough employees who are not working on projects for three months. “During that period, the government pays 50% of the employees’ salary, with no further contribution from the company. In that period, the accruals of the employees also cease,” NASSCOM said.

It said there could be job losses from April 15 once the lockdown lifts, and that such a move was required immediately in India.

Read: Do startups need a master regulation on the lines of the SEZ Act?

The trade association also said that PF benefits must be extended to all companies where 90% of employees earn less than Rs 15,000 a month. The government had, on March 26, announced that it would pay the employer and employee contribution towards PF for the next three months. However, this was restricted to companies that employed upto 100 people.

NASSCOM said the benefit must be extended to aforementioned companies, especially in the business process management (BPO) and information technology enabled services (ITeS) sectors, where a significant number of employees earn less than Rs 15,000.

As pay hikes seem bleak in the near future, it also asked the government to allow an opt-out option for PF and Employees’ State Insurance (ESI) scheme, as it would result in higher take-home salaries.