This is apropos a Business Recorder op-ed 'Healthcare, social security systems needed' carried by the newspaper yesterday. The writer, Rashed Rahman, has presented the plight of workers in an effective manner. But he seems to have exaggerated certain "facts" perhaps with a view to maligning or undermining businesspeople at large. According to him, for example, "the government's directives to industry and commerce to retain employees and pay their salaries during the lockdown have largely been practiced in the breach."
I totally reject such flawed assertion or claim. To best of my knowledge, almost all businesses-big and small-made payments against salaries of March to their employees or workers. They were able to do so because the lockdown came into effect only in the second half of March; it did not start in the first week of that month. Insofar as the payment of salaries of month of April to employees is concerned, they are finding it extremely difficult to do what they have successfully done in the last month mainly because of the fact that the protracted lockdown has woefully disrupted, among other things, the liquidity flows, badly affecting businesses' ability to collect receivables or organise funds that they require to clear payables or make payments against rents, inputs, utility bills and of course salaries.
In my view, not only does government's decision of directives to industries to continue to make payment of salaries lack rationality, it also does not enjoy the legal sanction or constitutional propriety. The scheme offered by State Bank of Pakistan (SBP) through which it has asked banks to provide lending to businesses on 4-5 percent interest rates on the condition that no layoff shall take place during the three-month period of disbursement of employees' salaries for the establishments that are granted loans is hardly a solution to the problem. What will each and every business be achieving in terms of output and its supplies by retaining its pre-lockdown workforce strength in the days and nights of strict and 'smart' lockdowns? Will the situation come back to normal or pre-Covid-19 position after three months? How will the businesses be ultimately repaying loans to the banks in a period of deepening recession?
The governments-federal and provincial-must tone down their fiery populism in view of some unprecedented challenges facing the businesses in the country or elsewhere. SBP must therefore allow businesses to rationalize workforce through job cuts and reduced salaries in the most judicious manner possible even if they are extended lending by banks in the head of employees' salaries. In this regard, SBP may itself explain what should actually constitute "most judicious" way for businesses or to what extent each establishment can be allowed to rationalize its workforce and carry out cuts in salaries in the midst of coronavirus outbreak.
Comments
Comments are closed.