In a hard-hitting interview, celebrity chef and restauranteur Ritu Dalmia said the government has done absolutely nothing to support the restaurant industry, that is facing its worst crisis in recent history.
Dalmia said at current count, losses for the industry (as represented within the National Restaurant Association of India ) are higher than the Rs 1 lakh crore estimated, as these figures don’t even take into count the smaller restaurants that are not part of a chain, and don’t have large investment support.
The picture is extremely grim and she estimates the numbers of restaurants that will be forced to shut down will be far more than the 40% feared at this point. That will have an extremely debilitating effect on employment – NRAI warns that even 10-20% job losses among its 7.3 million employees in restaurants across the country would mean up to 15 lakh are left unemployed.
She also said the financial relief announced for MSMEs by Finance Minister Nirmala Sitharaman was of no use, as the quantum of the loan she can take is merely Rs 5 lakh, which doesn’t help at all.
However, Dalmia warned that this was a problem brewing for a long time. “ The first blow was demonetisation, where spending went down dramatically. The next big blow was GST. While the customer thinks it is a 5% GST, we are actually paying 18% GST on several items. And there is no way customers will accept a 15 – 25 % increase in prices, what do restaurants do ?”
A large part of the problem Ms Dalmia believes comes from a misguided set of regulations around the post lockdown plan. “ If you set a 9 pm deadline, it means you expect the last meal to be served by 7:15, after which the restaurant and the kitchen will be cleaned and closed, in time for my staff to get home by 9 pm. Tell me which lawmaker in this country wants to step out for dinner at 6:30 pm.”
Ms Dalmia said there were a number of options available to support the industry, as has been done by governments of countries like Italy, that range from credit offsets on rent, to larger cash support.
She believes if the government is serious about saving and encouraging India’s vibrant tourism and F&B ( Food & Beverages) Industry, it must step up else the future looks very grim. “ I have always learnt to rise like a phoenix in the business setback. But I have never seen anything like this.”