ICT sector’s proposals to President to revive sector
View(s):The Federation of Information Technology Industry (FITIS) in a letter to President Gotabaya Rajapaksa on Thursday has presented a set of recommendations as part of a business recovery plan to revive the ICT sector.
FITIS said that the ICT industry represents a workforce of over 100,000 with a vision to uphold its contribution to 200,000 direct employment and US$5 billion exports and enabling the launch of 1,000 start-ups by 2022.
It recommended the following measures to help the sector help the country:
1. Amendments to the labour laws as an interim solution: The liquidity position of businesses has fallen short. Today, we witness many firms across the globe resorting to staff lay-offs to mitigate the losses. Yet, it is our belief that lay-offs would create social unrest resulting in higher unemployment rate in the country. Hence, we are determined that at least a contribution by way of retrenchments (reduction) would help our people secure their employments, whilst contributing to help spearhead (the sector) during this turbulent time. Hence, it is our humble request to take immediate measures to offer interim amendments to the labour laws to allow for retrenchments whilst ensuring an acceptable amount of pay is received by employees. This will cater to the need of salary/income reductions, pay cuts, reductions and/or non-payment of allowances.
2. Amendments to the Laws on Social Security: With our proposal to allow for retrenchments, a certain percentile of the cash in hand of our people will inevitably reduce. We propose to waive all EPF/ETF contribution from both parties until end financial year 2020-21 and that the ‘employee’ would receive the full benefit of the employer contribution value as well to help mitigate deficiencies experienced in salaries.
3. Government to reimburse 50 per cent of the gross salary bills of companies who were in operation as at March 16, 2020 until the next normal working day. This will support companies to recover a certain amount of funds to their working capital encouraging business continuity and reducing stress on cashflow.
4. 40 per cent reduction in electricity (rates) during the current financial year (2020-21): For ICT businesses, electricity consumption is a significant cost component.
5. The Rs. 25 million per bank per borrower threshold to be increased to Rs. 40 million.
6. Signing of the World Trade Organisation Information Technology Agreement where technology becomes more affordable and available to people.
7. Revision in prices and extension of delivery deadlines: The impact of the sudden increase in the exchange rate and conditions of liquidated damages that will have a huge impact on the cost for award / proposals / tenders already received and pending implementation, especially with the factories shutting production particularly affects the IT Hardware and Peripheral Solution Suppliers. Therefore, we appeal that the Government allows a revision in prices to accommodate the increase in exchange rates and be flexible on the extension of delivery deadlines in order to ensure uninterrupted supply and execution of pending / upcoming projects.