The Covid-19 pandemic has left the restaurant industry bleeding with an estimated loss of about Rs 1 lakh crore in the last 100 days.
The sector is also witnessing a closure of about 30% of restaurants across India and with the rest 70% seeing a drop of about 60%-70% in business compared to the same period last year.
Anurag Katriar, president, National Restaurant Association of India (NRAI)
In our industry, the proportion of fixed operating expenses by way of rentals, utility expenses and salaries is quite significant and with little or no revenues, it is getting very difficult for restaurants to survive through this pandemic. I won’t be surprised if 30% to 40% of the restaurants close down in the coming days. Closure in bigger cities would be much higher due to higher cost of operations in these cities.
Closure of 30% of restaurants would also mean a huge number of job losses in the coming days as the restaurant sector is the second largest employer of human capital in India after agriculture, providing direct employment to about 7.3 million people.
We have requested two forms of support from the government, one being liquidity support and the other being policy support. On the liquidity front, we have requested for making available easy working capital with six months’ moratorium, lowest possible interest rate and low collateral. We have also requested the government to pay partial salaries of our employees covered under the ESIC Act, using the massive ESIC corpus, so that the restaurants get some respite on cash flow. We have also requested the government to declare this pandemic as an ‘Act of Force Majeure’. On the policy front, we have requested the government to restore the input tax credit on GST for our sector, a robust national e-commerce policy which is fair to all stakeholders. We have also requested the Government of India to create dedicated F&B parks or hubs; we want the concept of Make in India to extend to Serve in India.