AS E-COMMERCE becomes a reality in the post-COVID times, Piruz Khambatta, chairman & managing director, Rasna says the distributor model and the informal FMCG model has been killed. In a conversation with The Indian Express, he suggests that the government should have given the industry a paycheque protection programme. Edited excerpts:
Our soft drink business has been badly impacted because this is not like noodles or biscuits which is consumed at all times. There are no guests, no parties, so no welcome drinks being offered. There is a dent in the welcome drinks business, but our other health drinks, like aampanna, shikanji and Rasna Honey, are doing well. We also launched a sanitizer which is on trial now.
As far as personnel is concerned, we have given them PPE suits, masks and cars so they can safely travel, which is standard now. Besides, our foundation has done well — we provided ventilators to hospitals, distributed sanitizers and food to the needy.
What would be the three basic aspects on which government can support your company and industry in these times?
Firstly, I think the government should have given us a pay cheque protection. It is not legal to pay employees who haven’t worked. We are not a charity organisation. Second, the government could have paid 50 per cent (of salary) to employees directly, it has the ESI and PF accounts, at least to employees earning Rs 6 lakh per annum. So if the government pays Rs 25,000, the employers can pay the same share and there would be lesser lay offs. As far as moratorium is concerned, its interest cost is so high that it is of no use.
As far as social security is concerned, I feel that instead of bearing the EPF costs for employees earning up to Rs 15,000 a month, it should be up to Rs 50,000 and the cap of firms employing up to 100 people, should also go. refers to the decision to pay EPF contribution of both employer and employee, i.e. 12 per cent each, for the next 3 months, applying to those establishments that have up to 100 employees and 90 per cent of whom earn under Rs 15,000 monthly wage).
Also, this was a good opportunity to rationalise GST by which it could have collected more. The government should also have refunded the input credit. I think the government has not come out with a simple solution for companies that are stressed, say for instance, a business like restaurants — there has been no business, how do I pay (the employees)?
What are your expectations on the performance of your company and the industry in the current financial year?
Business is never going to be the same again. The distributor model, the informal FMCG model just got killed. Post Covid, e-comm is become a reality. Everything now comes on Flipkart and Amazon. Even I got my own product Rasna Honey on Flipkart. Distribution dynamics will change. Post Covid, there will be no face-to-face selling, our boys are no more welcome in stores — this is the reality. We will have to cut down on sales manpower. People also want to spend less on things they can avoid. Also, media has changed in terms of advertising — there is social media and television. In television also, Doordarshan is the new star.
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