Nasscom suggests relief measures for hard-hit IT startups and SME sector

The suggestions will benefit the employees, especially the junior-level ones, who will be hard hit by the slowdown.


The current pandemic has threatened to disrupt businesses and organisations are worried about continuity and timely payment of salaries. This will particularly affect the startups in India, as they will struggle with delays in project deadlines, and business costs.

The incoming problems that these small and medium enterprises may possibly face in the upcoming months are that of liquidity crunch, adherence to deadlines, such as tax payment/filing, and payment of monthly salaries to employees.

To counter the above problems, the IT industry body, NASSCOM, has suggested few relief measures that the Government can take to help these organisations tide over the business disruption and losses they are facing.

The measures include provision of rental subsidy for workspaces used by these startups, which are managed by government agencies; extension of tax-payment deadlines and temporary refund of GST collected. Moreover, NASSCOM has requested a blanket suspension on deadlines for payment and filing of taxes for four weeks past lifting of the lockdown.

Timely payment of salaries and yearly increments are also at stake, considering the state of business at the moment. To help navigate this scenario, NASSCOM has suggested banks should provide an interest-free overdraft facility, which will cover the salaries of employees for a period of three months.

To overcome the increment hurdle, NASSCOM suggests a one-time PF opt-out option for employees to be provided for the next financial year, so that PF collected from both employer and employee can be transferred directly into the accounts of the employees, thus enabling them to take home a higher pay. This move will be particularly beneficial for the junior- or lower-level employees, who will be the worst hit due to business slowdown.

In addition, the pandemic has hit an already stressed out SME sector. Nasscom has said that all pending invoice receivables and payments should be disbursed with immediate effect, as a relief measure.

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