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Restaurant industry seeks relief package from Centre
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SME Times News Bureau | 23 Mar, 2020
The National Restaurant Association of India (NRAI) has written to Union
Finance Minister Nirmala Sitharman to seek economic relief for the
restaurant industry in view of the disruption caused by the coronavirus
scare in the country. Anurag Katriar, President of NRAI, said on
Monday that the restaurant industry with an annual turnover of around
Rs 4 lakh crore and providing direct employment to over 70 lakh people
was in a very precarious situation, fighting a grim battle for its
survival. "We have written to the Finance Minister and urged 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. The demand of the industry include pay
cover for its marginal employees, deferment of all statutory dues at
central and state levels, moratorium on bank loans recovery, restoration
of input tax credit on goods and services tax (GST) for the sector and a
general invocation of force majeure clause. The letter to the
FM read: "Total and immediate deferment of all statutory dues, whether
GST, advance tax payments, PF, ESIC, customs duties at the central
government level and state excise and renewal of liquor licences, and
VAT at the state level for a period of 12 months. This will leave
businesses with some cash flows to take care of more pressing
expenditures like wages, payment to contractual labour and small
marginal suppliers such as vegetable growers etc." It further
sought an "unemployment pay cover" for those employed in the sector,
"especially the ones who are at the lower end of the spectrum, and are
covered under ESIC scheme". The NRAI also requested that
employees covered under the ESIC to be facilitated by the government
through a corpus available with the Employee State Insurance Corporation
or any other welfare scheme such as MNREGA. "Immediate and
urgent settlement of claims by both public and private sector insurance
companies for covers taken by businesses on loss of business due to such
unforeseen circumstances. We also request an immediate freeze on any
increase in insurance premiums for a period of one year," said the
letter dated March 21. Katriar said that the food and beverages
industry operates with a very high proportion of fixed operating
expenses which makes the business prone to high risk even in case of
moderate revenue fluctuations. He added that the sector is now staring
at almost zero revenue in the immediate term and at least drop 50 per
cent 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 said. Last
week, the industry body -- which represents over 50 lakh restaurants
across the country -- advised all restaurants to shut operations till
March 31. Several states, including Delhi, have announced
lockdowns to control the spread of novel coronavirus, and these
developments would take a toll on the finances of restaurants along with
other sectors of the economy. About 415 people have been tested positive with the coronavirus infection in India and seven deaths have been reported so far.
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