Restaurant association writes to FM seeking financial bailout package for industry
The National Restaurants Association of India has written to Finance Minister Nirmala Sitharaman requesting for financial bailout package for the food services sector.
The restaurant industry has taken a severe hit with several states putting cities under lockdown and people being advised against going out. The NRAI too, had issued an advisory to all its members to shut down their dine-in operations till March 31, 2020 in view of the health risk to employees and customers in the Food Service Sector amidst the COVID-19 pandemic in India.
According to Anurag Katriar, President of NRAI and CEO & Executive Director of deGustibus Hospitality, the restaurant industry is currently in a very precarious situation with having to fight for its basic survival.
NRAI has requested the FM for a pay cover for the marginal employees in the sector, deferment of all statutory dues at the central and state level, a moratorium on bank loans, restoration of input tax credit on GST for the sector.
It also asked for a general invocation of force majeure clause in view of this global pandemic. Force majeure is a clause in contracts that protects one from the liability of fulfilling the obligations of a contract in the event of a natural or unavoidable circumstance.
Katriar claims that the industry, with an annual turnover of approximately Rs 4 lakh crore, provides direct employment to over 7 million people in India.
“In these times of unprecedented crisis, the fate of 7.30 million employees in F&B sector is our biggest concern. We don’t want them to suffer but unfortunately, we don’t have adequate resources to support them for long. Hence, we have written to our Hon’ble Finance Minister requesting for financial relief at such a crucial time. While preventing loss of direct jobs is our prime concern, we are also concerned about the dreams of many young entrepreneurs in the sector getting shattered due to this calamity,” he said in a statement.
The restaurant industry operates on a very high proportion of fixed operating expenses which, Katriar says, makes business very high-risk even in case of moderate revenue fluctuations.
“Now we are staring at almost zero revenue in the immediate term and at least drop 50% for months thereafter. We are therefore seeking support from everyone in the ecosystem in mitigating these fixed operating costs so that our losses are contained to manageable levels,” he adds.