The Restaurant Industry with an annual turnover of approximately Rs 4 lakh crore and providing direct employment to over 7 million Indians are in a very precarious situation currently, fighting a grim battle for its basic survival.
“As an industry, the business model is such that the proportion of fixed operating expenses is very high, which is a very high-risk model. Now, with the prospect of zero revenues staring at us for a substantial period of time, our fight is now a battle to retain our mere existence as commercial entities that provide jobs to millions. We are also mindful that post the lockdown, it will take us many months to become sustainable again. To achieve these twin objectives, we need to somehow bring down our fixed operating costs and its ratio; there is no other way out and the biggest components of these fixed operating costs are rentals and manpower expenses,” read a statement issued by NRAI.
Speaking on the subject, Anurag Katriar, President of NRAI; CEO & executive director of deGustibus Hospitality, said, “NRAI is extremely thankful to the Government of India & RBI for their recent measures aimed at mitigating some of our woes. Deferment of GST payments, concession extended on PF contribution and permission to employees to partially withdraw from their PF accounts, moratorium on EMIs and easing of interest rates are all steps in the right direction. We further appeal to various state governments to extend similar reliefs on state taxes like Excise and VAT. We once again fervently appeal to the Hon’ble FM and the GST Council to restore Input Tax Credit on GST; this will also help us significantly in bringing down our fixed operating costs. As very critical partners in our business, we further seek similar support from all the Landlords across the country. Some of the big mall owners such as Lulu Group, Lodha Group, Forum and Vegas have already announced immediate interim reliefs and we request other mall owners and independent landlords to do the same. We sincerely appeal to waive off the rentals and CAM for three months and work on a moderate revenue share model for six months post that till the business regains some lost foothold. This appeal is aimed at ensuring our mere survival during such extraordinarily troubled times; we aren’t trying to profiteer at the expense of the landlords. As long-standing business partners of ours, we are hopeful that the landlords will extend their support in these times of unprecedented crisis.”
He further added “The recent measures partially resolve our immediate concern of keeping the kitchen fires in the homes of our employees burning, which looked very difficult earlier with our negligible to limited cash reserves. Moratorium on EMI will also help millions of employees in the sector, who all have availed some loan or the other and have an EMI to honour every month. These are very brave and laudable measures in the immediate term and we welcome them wholeheartedly. We will need a much bigger stimulus package from the Govt whenever we get back to the stage of rebooting our business.”