The restaurant industry is one among many industries in the country that is currently fighting to survive, with the risk of many small restaurants going under due to the lockdown. The National Restaurant Association of India (NRAI) has now written to NITI Aayog CEO Amitabh Kant, also the chairperson of the empowered group that was set up to coordinate with the private sector and NGOs for response-related activities of COVID-19.
This comes after the restaurant body wrote a letter to Finance Minister Nirmala Sitharaman. With regard to this, NRAI said it has met with partial success.
According to NRAI, the restaurant industry employs over 70 lakh people, and has an annual turnover of Rs 4 lakh crore. It stated that if no interim relief is provided, the situation could lead to social unrest, and that the demand will take 9-12 months to return to stabilise.
NRAI asked for support under three broad categories — for people, operationally and in policy.
People
For employees, NRAI has suggested an unemployment pay cover to all employees under Employees' State Insurance Corporation Act till the end of lockdown, and 50% till March 2021 — which they said can be a mix of cash and food grains. In addition, they want the scheme announced by Finance Minister Nirmala Sitharaman regarding provident fund payment being made by the government to also cover companies with less than 1000 employees, with the salary limit to be in line with the minimum wages paid to skilled labour in the state, and that companies should have at least 50% employees working at minimum wage level.
“With a view to help the finances of its employees, NRAI also recommends enhancing the withdrawal limit from PF up to six month’s gross salary with a max cap of Rs 3,00,000,” NRAI stated.
Another suggestion made by the NRAI was to extend the moratorium on retail loans by employees to help them with their cash flows.
Operational
To sustain operationally, NRAI has asked for a complete waiver of all licence fees and the minimum rent on utilities — for either a period of six months or till the end of the lockdown, whichever is greater.
“All renewals of license, permits and registrations to be put in abeyance for six months. NRAI has also sought a discount in utility rates as a part of the revival package and continues to seek deferment of all statutory payments for managing cash flows,” NRAI said.
They’ve also sought easy availability of working capital without asset collateral, and early settlement of insurance claims.
With regard to policy recommendations, the restaurant body asked for a restoration of input tax credit on GST, a fair e-commerce policy, creation of mega restaurant hubs and encouraging domestic investment into service sector startups.
With regard to e-commerce policies, they said they want a policy that not only protects businesses but gives the opportunity to trade on equitable terms.
“We need a platform where the buyer and seller decide the terms for transaction and not the platform! Greed of a few heavily-funded enterprises cannot be allowed to hurt an entire sector,” NRAI said.
“Our people concern needs first attention while issues around operating needs and policy support also need to be addressed before the lockdown gets lifted for the sector,” NRAI head Anurag Katriar said.
Speaking on this subject, Riyaaz Amlani, Trustee of NRAI; CEO & MD, Impresario Entertainment & Hospitality said: “While our industry is looking at suffering major losses for the next one year; we have to support the government in its fight to save lives of the victims of COVID-19 as well as the brave front-line defenders such as medical workers, police officers, and essential service workers and continue to serve them to the best of the ability. We will have to take the hit on our chin. Our hope now is that the government will step in and save not just hospitality and tourism but the entire value chain from complete destruction.”
NRAI trustee and The Beer Cafe’s founder and CEO said that restaurants operate on a deferred expense model, and there is no buffer without revenues.
“In this crucial juncture, we need to focus on both, lives and livelihood. I implore the government to share the contagion burden. SMEs can at best comply with the request to continue employment during lockdown, but to expect sustenance is not only unfair, but also practically impossible. All stakeholders - employer, employee and the government - will need to make sacrifices and share the financial burden,” he said.