The Retailers Association of India (RAI) asked Finance Minister Nirmala Sitharaman on Wednesday to extend the benefits of the emergency credit line guarantee scheme to retailers, as well as a 6-month moratorium on principal and interest on all loans, claiming that COVID-19’s second wave has crippled the industry.

According to RAI, about 80% of retail stores are closed due to various restrictions across states, and nearly Rs 75,000 crore could become NPA if the Reserve Bank and the Centre do not take urgent steps to ease the working capital challenges.

“Several states have ordered the lockout of malls and shopping centres where most new stores work, making retail companies among the hardest affected throughout the nation. The industry is struggling to stay afloat in the face of severe financial stress that threatens to derail operations” In a statement, RAI said.

RAI said in a submission to the Ministry of Finance that it has recommended that the ministry and the Reserve Bank of India intervene to relieve the mounting burden on retail businesses in the aftermath of the pandemic’s second wave.

It requested that the ministry expand the benefits of the emergency credit line guarantee scheme (ECLGS) 3.0 to retail companies as well, claiming that the availability of additional funding to qualified retail businesses would go a long way toward helping them revive, protect jobs, and create a favourable climate for job creation.

RAI is seeking a 6-month moratorium on principal and interest on loans, claiming that the retail sector “represents an investment of Rs 2,50,000 crore, and nearly Rs 75,000 crore might transform NPA if the Reserve Bank of India and the Government of India do not take urgent steps to ease the working capital challenges.”

It went on to say, “Almost 3 million jobs in the retail sector would be jeopardised as a result of this. Associated industries that depend on retail will also be affected. Almost 10 million workers are at risk in the textile industry alone, across the entire value chain. Furthermore, it would suffocate the engine that can re-ignite our economy’s consumption-led recovery.”

RAI also requested that the RBI advise banks to raise the working capital limit for retailers by 30% to assist them in paying their employees and suppliers.

“Retailers are also forced to pay overheads such as wages, fuel, and rent despite having no sales. If the government does not provide a timely relief package to alleviate the financial burden, the industry will struggle to survive the second wave” Rajagopalan expressed his thoughts.