Union Budget 2024: Restaurateurs Seek Industry Status, Reforms, 24x7 Operations
The Rs 5.7-lakh crore restaurant industry has also demanded a separate ministry to push for policies that will drive growth.
The food services industry advocates are calling on the government to grant "industry status" to restaurants and hotels in the upcoming Union budget. They are also seeking formation of a separate ministry to push for policies that will drive growth in the industry, which is worth Rs 5.7 lakh crore in India.
"All our ask is to be recognised," said Kabir Suri, president of the National Restaurant Association of India. Given that the restaurant sector contributes 2% to GDP, about Rs 33,000 crore in taxes and is one of the largest job creators in the country, it must be accorded an industry status so that it can reap the benefits in the form of subsidies, cheaper loans, and fast-track licence clearances, said Suri, who is also the co-founder and director of Azure Hospitality, the company behind Mamagoto and Sly Granny.
"Presently, the food services industry has to deal with multiple government agencies and licences," he pointed out. "We are also hoping to get a specialised ministry that would enable advocacy for faster growth, while gaining a deeper understanding of the challenges the sector faces today."
Some of the other key recommendations are:
A dual tax regime, which would include a 12% GST rate with input tax credit, as well as maintaining the current 5% GST rate without ITC.
A simplified and standardised licence and permit policy enabling ease of doing business. Currently, a restaurant needs at least 15–25 licences and no-objection certificates to open and operate an outlet.
Equitable e-commerce policy to promote fair competition.
Longer operating hours nationwide, replicating the Haryana model.
"The introduction of 12% GST rate will not only lead to better compliance, but also increased revenue for the government," according to Nitin Saluja, founder, Chaayos. The lack of input tax credit has increased the cost burden for entrepreneurs. "The need for higher capital expenditure has resulted in slowdown of expansion plans," he said, adding that restoration of input tax credit has been a long-standing demand from the government.
On the e-commerce policy, the apex body for restaurants and eateries said the online platforms, while bringing convenience, have also created concerns regarding fair competition and equitable growth. "There are apprehensions about potential overreach through exclusionary tactics, misuse of data and restaurants' profit erosion due to high commissions," the NRAI stated.
The restaurant industry is among the sectors that suffered the most during the Covid-19 pandemic, but showed great resilience to survive, it said.
The fifth edition of the India Food Services Report, released by the NRAI, expects the food services industry to grow 8.1% annually to reach Rs 7.8 lakh crore in the next four years. The organised sector, however, is expected to grow much faster at 13%. From close to 44% market share, the organised sector is projected to grow to close to 53% by 2028, according to the NRAI.
