The expenses are based on their profit and loss accounts for the first nine months of FY20. Together, these 1,565
and wages during the April-December 2019 period and another Rs 2.96 trillion on interest on their borrowings.
In all, 2,205 companies reported their profit and loss for the first nine months of FY20 out of which only 637 companies (around 30 per cent of the sample) operate in essential categories. These include food processing, banks, insurance, telecom, media, power, oil & gas, pharmaceuticals, chemicals, mining and IT services, among others.
and drying up of revenues have created financial problems for corporate and business leaders as they have to scramble to raise resources to pay to their employees and creditors.
For example, Maruti Suzuki reported zero sales during April. It’s the same story for industry peers such as Hyundai India, Tata Motors, Mahindra & Mahindra, Bajaj Auto and Hero MotoCorp, among others. Consumer durable companies, such as Havells India, Bajaj Electricals, TTK Prestige
and Voltas, face the same situation.
The chief executive officer (CEO) of a large corporate said the company managed to give salary for April by dipping into its cash reserves. But this cannot go on for long. "Without cash flows and revenues, it will not be possible to keep on giving salaries. Sooner or later, we will have to stop this," he said.
“If the Reserve Bank of India (RBI) and the Centre do not act now, Covid-19 in different forms (no jobs, no income and no demand) will kill industry and people associated with it. India will be on sale. The situation is serious,” he said, asking not to be named.
Industry leaders are demanding cheap liquidity to tide over the current situation and fiscal stimulus to revive consumer demand.
The largest numbers of jobs are in the textiles and garments sector with listed companies in the sector employing nearly half a million full-time employees at the end of March 2019. These companies had a combined monthly salary bill of around Rs 1,700 crore during the first nine months of FY20.
They are followed by non-banking lenders which had total employee base of around 400,000 people at the end of March 2019 and reported monthly salary & wage bill of around Rs 3,300 crore in the same period.
Auto makers and their component suppliers, however, top the charts in terms of the overall salary bill. On an average, the auto industry spent nearly Rs 8,000 crore a month on employees during FY20. The industry is followed by metal producers such as Tata Steel, Hindalco and Vedanta with a monthly salary bill of around Rs 4,500 crore during FY20.
Analysts however say that the actual numbers of employee affected by the lockdown
is much larger than what was reported by companies.