COVID-19: Nasscom seeks govt help for BPM, GCCs

New Delhi, Apr 9 () IT industry body Nasscom has sought a relief package from the government, including allowing bench employees to be paid only minimum wages, to prevent job losses in business process management (BPM) and global capability centres (GCC) sectors.

Nasscom said BPM, GCC and parts of IT industry are operating at maximum 70 per cent capacity utilisation in wake of the lockdown imposed to contain the spread of the coronavirus infection in the country.

Assuming that 20 per cent of the industry is idle, salary costs would be huge for companies that employ lakhs of workers, it added.

Nasscom urged that they should be allowed to pay bench employees only minimum wages along with statutorily entitlements.

"In the absence of work, it will be difficult for companies to pay regular incomes to the employees on bench. This will ensure such employees are paid as per the statutory requirements along with other entitlements," it added.

Employees on bench are those who aren't working on any project for the time being but remain on the rolls and receive regular salary from the company.

Nasscom suggested introduction of a furlough scheme, like one in the UK where for the period of lockdown, employee stay on the rolls of the companies without salaries.

During this period, the government pays 50 per cent of the employees' salary (no further contribution from company) and during that period, the accruals of the employee also cease.

This is required immediately to prevent job losses which will be the case after April 15, Nasscom argued.

It has also asked the government to expand its scheme for bearing employer and employee contribution towards Provident Fund for the next three months.

"This (present scheme) is for those establishments which have up to 100 employees and 90 per cent of them earn less than Rs 15,000. Suggest that this be extended to all establishments without the cap of 100 employees and 90 per cent of them earning less than Rs 15,000.

"Government may, however, cap the contribution of 24 per cent up-to a wage amount not exceeding Rs 15,000," it said.

This will provide a significant benefit particularly to BPM/IT-enabled services/GCCs companies, it added.

The industry body suggested that an option be provided to employers for a one-time PF/ESI opt-out option to reduce the costs, without affecting take home salary presently.

This, it said, will enable greater take home salary for employees as pay hikes are difficult.

The coronavirus outbtreak across the globe has had a disruptive impact on businesses, demand and supply of products, services as also cash flow of firms due to slowing economic activity.

There are widespread concerns that this could result in companies slashing jobs and resorting to salary cuts to tide over the crisis.

In an unprecedented move, Prime Minister Narendra Modi on March 24 announced a complete lockdown of the entire country for 21 days to try halt the spread of coronavirus, shortly after which the Centre said road, rail and air services will remain suspended during this period.

As on Thursday, the pandemic has claimed 166 lives in the country and the number of COVID-19 cases stand at 5,734 in India. SR MBI RVK