Home NEWSINDUSTRY NEWS Hon Minister Nitin Gadkari recognises the dilemma of the salon and spa industry and extends support

Hon Minister Nitin Gadkari recognises the dilemma of the salon and spa industry and extends support

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Minister for Road Transport & Highways of India and Shipping Ministry and of Micro, Small and Medium Enterprises (MSME) in the Government of India, Hon Nitin Gadkari attended an online conference with senior the representatives of India’s beauty and wellness industry to chart out the way forward post lockdown

Indian beauty and wellness enterprises comprise over 65 lakh beauty parlours, barber shops, salons, spas, clinics and academies that fall under micro and small enterprises and under the category of ancillary services. The sector employees over 70 lakh professionals, including ones from the lower socio-economic and educational strata as well as migrant workers in particular from regions across the North and North East. Two out of every three professionals in this industry are women. All these facts and statistics were presented to the Hon Minister Nitin Gadkari during the online conference that took place on the 4th of May, 2020, with representatives from across India participating in it.

The focus of the conference was to bring to light key aspects of the industry including its strength in numbers and employment figures that are extremely relevant to the current lockdown situation at hand including:

  • Human resource is the single largest cost amounting to 40% of the revenue.
  • With zero revenues and slow recovery, the small enterprises cannot survive without Govt intervention.
  • Closures would mean massive unemployment and migration of skilled labour.
  • Need of the hour was health and life cover for the employees.
  • Cover 50% of the minimum wages for 6 months.
  • 50% pay back of GST paid by MSM in FY 2020.
  • Employee’s State Insurance Corporation (ESIC) to pay 70% of the salaries to the beneficiaries.
  • Remove cap of 100 employees and enhance Rs 15,000 limit for reimbursement of PF (minimum wage higher than 15000 in metros)

The industry is looking for support on the following aspects:

  • Liquidity to survive
  • Enhancement of working capital/overdraft limits
  • Collateral free loans from Small industrial Development Bank of India (SIDBI)/MSME at softer rates
  • Auto renewal of licenses for 12 months
  • Extension for GST payment for 12 months

Gadkari acknowledged the vastness of the industry going by the number of people employed and agreed that the government will need to give a serious thought to it. He said that he has already spoken to the relevant authorities regarding removing the cap of 100 employees and the Rs 15,000 limit. He recommended opening a skill development and training centre to enable more people to get employment in this industry as well as promotion of Made In India products for the wellness community.

He pointed out that a lot of people do not do MSME registration, perhaps due to fear, and they lose out on the benefits extended by the government. He urged businesses to register themselves under MSME as many schemes are in the making, which will benefit both the business owners and their employees. With regards to the loans that businesses have taken from SIDBI or banks, he said that the Ministry of MSME secures 70% of such loans as it pays insurance worth Rs 15,000 crore and has insured Rs 1 lakh crore worth of loan. So, businesses are required to give collateral for 25% of the loan. However, he said that he would look into any schemes from SIDBI that are relevant to the beauty enterprises especially given its significant contribution to women empowerment.

He informed that his private secretary and the joint secretary were both part of the conference so they were appraised of the situation. Post lockdown, he has invited a delegation from the industry to come to New Delhi where they can consider all the different aspects and work out some concessions. Considering the current level of employment generated by the industry, he is positive that the industry is capable of generating more employment in the future. “We will definitely support you,” he assured.

“We are fighting this war against the coronavirus, and I am positive that we will win this fight,” Gadkari said. He reiterated a changed way of working post-lockdown that involves:

  • Sanitising your hands
  • Social distancing
  • Mandatorily wearing masks

He hopes that Ayurvedic spas and Panchakarma centres open up across the world and that’s why his Ministry and the Ministry of Ayush have signed an MoU. He urged the industry members to not get depressed with the current situation and have a positive outlook. “We will overcome this pandemic, we will win and move forward successfully. We need to move ahead with this belief. We will do our best to act upon the points that you have presented.”

Vikram Bhatt, Director of Enrich Salon and Academy, updated the Minister about the safety and hygiene guidelines released by B&WSSC. Bhatt also urged him to consider the women work force – both entrepreneurs and employees – that are a prominent part of this industry and help and support them as much as possible.

To this he replied with an assurance that his Ministry will do whatever it can to promote the industry. He reiterated that the industry members need to register themselves with MSME. When Dr Rekha Chaudhary, Global Wellness Ambassador for India, brought forth the concern of including barbering under essential services, Gadkari recounted that since he works in the field of innovation, he has put cut hair to use in the production of amino acid in agro business (to aid fast growth of plants). He urged the industry to use and promote Ayurvedic or plant-based Indian products.

Dr Rekha also asked whether some solution can be arrived at before the lockdown ends, Gadkari said that he will share the recommendations suggested during the conference to the right authorities. He said that currently the need of the hour is survival but eventually the expansion and development of this industry will have to be considered. All this can be accomplished once the industry’s delegation reaches New Delhi and meets with him and the right authorities.

When asked about the lifting of the lockdown, Gadkari was positive about the progress that was taking place with the opening of the national highway, import-export and green zones, which have completely opened up. Even in the red zones, activities will resume with implementation of the guiding principles. It is the government’s aim that there’s a balance between the lockdown and regularising the activities. Dr Rekha further urged him to give his guidance to the industry as it falls under MSME and women entrepreneurship, both of which are under his leadership. He ended the session with a positive assurance that he will definitely look into it.

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