NRAI writes to FM, seeks relief package for restaurant industry

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.