National Restaurant Association of India (NRAI) has written a letter to the Finance Minister Nirmala Sitharaman Asked for support for industry in the Union Budget. The letter said the restaurant industry is a significant contributor to the national economy and one of the highest employment generators in India, with the sector currently directly employing over 7.2 million Indians. The industry body claims to have an annual turnover of around Rs 4.23 lakh crore. The restaurant industry is the third largest industry in the service sector, behind retail and insurance. It argues that if the sector gets a certain amount of policy and budgetary support during the upcoming budget, it will propel the sector towards a faster pace of growth.
NRAI has highlighted some issues which, if addressed in the budget, will help in the development of the sector. The important demands raised in the letter are the restoration of GST. input tax credit (ITC) argues that this is the only industry on which 5% GST has been imposed without the availability of ITC. “The lack of ITC not only significantly reduces the operating margins of the business, but it also significantly increases the capital budget for a new project. The letter argues that this increased project cost slows down expansion plans, which has a cascading effect on the overall development of the region.
The second demand of the industry is to restore the Service Export from India Scheme (SEIS). NRAI states that the industry generates substantial amount of foreign exchange for the country through foreign currency denominated credit/debit cards. The SEIS scheme has been discontinued recently, the letter said and requested that it be reinstated with a duty credit of 10% of the foreign exchange earned by restaurant entities to promote the growth of the industry.
The long pending demand of the restaurant industry has been a separate food services ministry/department. “We strongly believe that this can change the face of the industry and provide tremendous impetus to the organic growth of this sector. One of the biggest hurdles for the sector is the lack of a single ministry that can help it grow in a planned and focused manner. It is a highly regulated industry with policy and procedural interventions at levels ranging from local municipal authorities to the central ministry. This not only goes against the ethos of ‘ease of doing business’ that the government espouses, but it also gives rise to problems arising from conflicting instructions coming from different authorities. This significantly increases the compliance burden, which has a negative impact on growth,” claims NRAI. It further argues that there are other sectors which contribute much less to the national exchequer and employment generation but have dedicated ministries for themselves.
Due to the size of the revenue and job creation, the restaurant industry has requested to be granted industry status. The letter argues that “in view of the immense contribution of the food service industry to the country’s economy, it should be given industry status. This will bring many benefits including easy finance, special schemes, subsidies, fast track clearance process etc. through central or state industrial policies. This will encourage enterprise as well as entrepreneurship.
Other demands raised in the letter include reduction in GST on bagasse and other eco-friendly materials, reduction in GST on commercial rentals (revenue share), rationalization of licenses/NOCs. Equitable and fair e-commerce policy and longer operating hours.
NRAI also suggested that targeted subsidy schemes and access to debt financing for small and medium enterprises be made available for the restaurant industry and an employee welfare scheme as there are no special packages or welfare funds or pension schemes for employees in this industry. Are.
Kabir Suri, President, NRAI and Co-Founder and Director, Azure Hospitality Pvt Ltd, says, “There is immense potential in the growth of the food service industry in India. The industry not only plays an important role in contributing to government revenue but is also one of the largest employers in the country. The balanced, fair and equitable policies of the Government with respect to GST input tax credit, rational licensing norms and e-commerce policy will not only benefit businesses and consumers but will also significantly contribute to the overall economic growth and employment opportunities. Suri said, “I hope that the Honorable Finance Minister will give favorable consideration to our requests to promote the growth of the industry. I believe that our suggestions for a dedicated ministry/department for the restaurant industry can be a game-changer, and will lead to rapid growth in the sector.”
NRAI has highlighted some issues which, if addressed in the budget, will help in the development of the sector. The important demands raised in the letter are the restoration of GST. input tax credit (ITC) argues that this is the only industry on which 5% GST has been imposed without the availability of ITC. “The lack of ITC not only significantly reduces the operating margins of the business, but it also significantly increases the capital budget for a new project. The letter argues that this increased project cost slows down expansion plans, which has a cascading effect on the overall development of the region.
The second demand of the industry is to restore the Service Export from India Scheme (SEIS). NRAI states that the industry generates substantial amount of foreign exchange for the country through foreign currency denominated credit/debit cards. The SEIS scheme has been discontinued recently, the letter said and requested that it be reinstated with a duty credit of 10% of the foreign exchange earned by restaurant entities to promote the growth of the industry.
The long pending demand of the restaurant industry has been a separate food services ministry/department. “We strongly believe that this can change the face of the industry and provide tremendous impetus to the organic growth of this sector. One of the biggest hurdles for the sector is the lack of a single ministry that can help it grow in a planned and focused manner. It is a highly regulated industry with policy and procedural interventions at levels ranging from local municipal authorities to the central ministry. This not only goes against the ethos of ‘ease of doing business’ that the government espouses, but it also gives rise to problems arising from conflicting instructions coming from different authorities. This significantly increases the compliance burden, which has a negative impact on growth,” claims NRAI. It further argues that there are other sectors which contribute much less to the national exchequer and employment generation but have dedicated ministries for themselves.
Due to the size of the revenue and job creation, the restaurant industry has requested to be granted industry status. The letter argues that “in view of the immense contribution of the food service industry to the country’s economy, it should be given industry status. This will bring many benefits including easy finance, special schemes, subsidies, fast track clearance process etc. through central or state industrial policies. This will encourage enterprise as well as entrepreneurship.
Other demands raised in the letter include reduction in GST on bagasse and other eco-friendly materials, reduction in GST on commercial rentals (revenue share), rationalization of licenses/NOCs. Equitable and fair e-commerce policy and longer operating hours.
NRAI also suggested that targeted subsidy schemes and access to debt financing for small and medium enterprises be made available for the restaurant industry and an employee welfare scheme as there are no special packages or welfare funds or pension schemes for employees in this industry. Are.
Kabir Suri, President, NRAI and Co-Founder and Director, Azure Hospitality Pvt Ltd, says, “There is immense potential in the growth of the food service industry in India. The industry not only plays an important role in contributing to government revenue but is also one of the largest employers in the country. The balanced, fair and equitable policies of the Government with respect to GST input tax credit, rational licensing norms and e-commerce policy will not only benefit businesses and consumers but will also significantly contribute to the overall economic growth and employment opportunities. Suri said, “I hope that the Honorable Finance Minister will give favorable consideration to our requests to promote the growth of the industry. I believe that our suggestions for a dedicated ministry/department for the restaurant industry can be a game-changer, and will lead to rapid growth in the sector.”
