Restaurant Industry that has been waiting for the budget seeking some sector specific relief is again left disheartened with no specific budget allocated for the growth of the sector. While, it was for the first time in history that hospitality sector did get a mention in the finance minister’s speech when she announced the extension of Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 which will allow one-year moratorium extension for loans availed under the ECLGS Scheme.
“I think it's a little disheartening for us, the restaurateurs, that our industry did not reserve any mention in the Union Budget 2022-23 declaration. With the massive blow of pandemic, we were hoping to get some relief and were expecting to avail the GST input credit. We seem a bit neglected. Hoping next time, we might be brought into focus,” said Debaditya Chaudhury, Managing Director of Chowman, Oudh 1590 & Chapter 2.
The restaurant industry has been requesting restoration of Input tax Credit on GST, Ease of Doing Business that includes over licensing and regulation hurdles in the smooth operation of the sector, and also a fair and equitable eCommerce policy for the survival and revival of the restaurants from last 2- years.
“While the Hospitality Sector was mentioned for the first time by Smt. Nirmala Sitharaman when she announced the extension of Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 which will allow one-year moratorium extension for loans availed under the ECLGS Scheme but it may ease current liquidity issues only for some businesses which have existing credit lines or outstanding sanction available loans. It was very disappointing to see that no specific announcements were made for the Restaurant Industry and we are yet again left to fend for ourselves,” shared Kabir Suri, President, NRAI by pointing that in FY21, Indian Food Services Industry contracted severely leading to permanent closure of over 25% of Food Business Operators which resulted in job losses of nearly 24 Lakh people.
Also, the food industry in India declined by 53% and was estimated to be worth INR 2,00,762 Cr, compared to INR 4,23,624 Cr in FY2020.
"The government has been supportive towards the F&B sector and did announce some steps to help the sector bounce back by shifting the GST compliance onto online food delivery partners on behalf of the restaurants. However, some relief in terms of ITC (Input tax credit) would have further catalyzed the recovery of the sector which otherwise is on the bleeding end. Currently, when the industry is struggling to manage the fixed cost with GST, it requires immediate boost, and cutting down ITC would have worked wonders,” added Farman Beig, Co-founder & CEO of Wat-a-Burger
Also, as we have seen e-commerce emerging as a very critical arm for the overall economic growth of the nation, the industry is also requesting an equitable e-commerce policy in the food service sector as delivery has become a major source of recovering sales amid the pandemic.
"Indeed the food & beverage industry in India was bleeding, and it required a lifeline to recover. Though the government certainly announced a number of steps for its resurgence, the Budget announcement of extension ECGL service for the sector will play a significant role to empower the vertical once again and get it up and running. Additionally, a slight consideration on the investors front on funding the F&B startups could have further accelerated the recovery of the industry. We further expect fundamental policies to revive the vertical in the country,” pointed Kushang, Co-founder & CEO of SupplyNote.
Sharing his view on the same, Kabir Jeet Singh, CEO and Co-founder, Burger Singh, mentioned , “The hospitality sector has been hard hit by the lockdowns and seating regulations due to the pandemic. The extension of the Emergency Credit Line Guarantee Scheme (ECLGS) by one more year, with an additional amount being earmarked exclusively for the hospitality and related enterprises is a big boost to the sector.”
He also added that the hospitality sector accounts for 39 million jobs or 8% of India's total workforce, and this move will strengthen investments and create millions of additional jobs.