On December 23, the Parliament had passed the Bill amending the Payment of Bonus Act, by which more employees have become eligible for bonus.
Micro, Small and Medium Enterprises (MSME) chamber, Indian Industries Association (IIA), claimed that although the amendment was in the interest of workers, the employers, especially MSMEs, would find it difficult to implement it as they had not provisioned for this expense.
IIA President Manish Goel warned that a retrospective implementation would have ‘disastrous consequences’ on MSMEs as they would be required to pay additional bonus to those who had already been paid by way of ex-gratia or performance bonus.
While the government could afford to pay retrospectively by imposing taxes, the industries have no such means to collect money, especially the MSMEs, which are 26-30 million in India, he underlined.
The IIA has written to Prime Minister Narendra Modi seeking roll back of retrospective implementation from April 1, 2014. Besides, similar letters have also been written to the President and the concerned Cabinet Ministers.
Meanwhile, the association is networking with industry chambers in other states to put pressure on the Centre to roll back its decision for the retrospective clause.
The industry has also pointed towards unanimity amongst political parties in passing the amendment as the government had not discussed and sorted out the issue of the cut-off date of implementation, although it had held tripartite meetings with the representatives of the government, industry and central trade unions.
The IIA maintained that the passing of amendment on the last day of the Rajya Sabha’s Winter Session also indicated that no party could consider the practical aspects and consequences of retrospective implementation for industries, especially MSMEs.
Source: Business Standard