“All industries are under pressure and every company has honoured the advice of the authorities to pay to all the contract employees during the shutdown, so I would like to suggest that salaries paid to the contact staff during the shutdown to be taken in the CSR activity as there was no productivity for the companies during this shutdown time,” said Sneha Oberoi.
Suzuki Motorcycle CFO’s comments came in the backdrop of Prime Minister Narenda Modi urging India Inc to not cut salaries or wages of its employees and workers during the lockdown times.
This marks the second week of the 21-day lockdown which began March 25. Companies including Suzuki Motorcycle and others have shut down their operations across the country, with only businesses dealing in essential items, like medicines and groceries running. As per the CSR law, companies are required to spend two per cent of their average last three-year profits in Corporate Social Responsibility related activities. These activities are defined separately under Section 7 of the regulation.
“All industries are under pressure and every company has honoured the advice of the authorities to pay to all the contract employees during the shutdown, so I would like to suggest that salaries paid to the contact staff during the shutdown to be taken in the CSR activity as there was no productivity for the companies during this shutdown time,” said Oberoi.
The economic disruptions faced by the Covid-19 outbreak seems to have aggravated matters for the auto industry, which was already reeling from unprecedented demand woes. The industry witnessed thousands of layoffs, even before the virus pandemic had hit.
‘Relief Packages’
Suzuki Motorcycle India’s finance chief expected from the government “relief packages” for reviving demand. “I believe that there will be definitely some relief packages which will help to stimulate the consumer sentiments and increase demand once India is back to work after the lockdown of 21 days.”
The government, last week, announced a fiscal stimulus worth Rs 1.6 lakh crore for the poor to help them navigate through tough times faced due to the Coronavirus situation. PM Modi has set up a Covid-19 Economic Task Force under Finance Minister Nirmala Sitharaman to deal with the economic impact from Coronavirus.
‘Current Situation like War’
The scenario in the country on account of the pandemic is nothing less than a war, said Oberoi, adding, “nobody has any clues when this fight against Coronavirus will end”.
“Things are very slow and the situation is tense due to the Covid-19 outbreak and this slowdown is unprecedented. Suddenly it’s a war like situation on every front,” the finance executive said. “Nobody knows how long it will last and how soon Indian business will recuperate, right now the sentiment of the consumer is very low,” she added.
The CFO listed out several challenges, including managing costs and ensuring financial reporting compliance for the fiscal ended March 2020. Suzuki Motorcycle is required to close the books of accounts for financial 2019-20 in April itself as required by its Japanese parent, Suzuki Motor Corp.
“In the current situation, there are multiple tasks which need urgent attention. These are March end compliance, treasury operation, managing fixed costs, social responsibilities, well-being and livelihood of the employees. Working from home is adding to problems as it requires more effort. When you are in office, you are able to get the things done fast,” the Suzuki Motorcycle India CFO shared.
Right now, the company is coordinating through calls and video conferencing, she said, narrating her experience working from home. “… As whole India is relying on digital solutions now so the speed of the internet and connectivity of the phone is also sometimes creating problems.” The company is still making decisions but in office this process of decision making is fast, she added.
The positive aspect of the current situation is that the company has time to think of the process improvements and rethinking about the operations, the CFO said.
The government announced nationwide lockdown to stop the spread of the deadly virus which has taken 50 lives in the country so far as of April 2, 2020. The 21-day clampdown continues till April 15.
Article Credit: auto.economictimes.indiatimes.
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