Top restaurant associations seek liquidity support amid Covid-19 crisis

Some of India’s top restaurant associations have asked for an interest subvention scheme, working capital support, collateral-free loans and waiver of payment of statutory fees, as the sector battles its worst crisis triggered by the Covid-19 pandemic.

The National Restaurant Association of India (NRAI), Hotel and Restaurant Association of Western India (HRAWI), and The Federation of Hotel and Restaurant Associations of India (FHRAI) have all argued that eateries have been among the worst affected since the pandemic began in 2020.

“Almost 30-35 per cent of restaurants shut permanently after the first lockdown last year. Another 30 per cent will now shut shop because of these localised lockdowns this year. We’ve asked state governments such as in Maharashtra to compensate workers employed in the industry for the loss of income and support restaurant owners by waiving statutory fees, taxes and utility bills,” Gurbaxish Singh Kohli, vice president, FHRAI, said.

NRAI President Anurag Katriar says liquidity support for the industry is a must. “With business barely moving in many places, the challenge is to keep it afloat. We therefore require liquidity support from the government,” he says.

Since March of 2020, the Rs 4.25-trillion domestic restaurant industry has had to contend with lockdowns, curbs, and restrictions on business hours.

The Reserve Bank of India (RBI) announced a moratorium on loan payments between March and August and allowed lenders to undertake a one-time loan restructuring for stressed sectors. Restaurant associations, however, say this is not enough.

“The relief package announced by the RBI and other ministries has been inadequate. There has also been no sector-specific relief to restaurants,” Pradeep Shetty, senior vice president, HRAWI, said.

Restaurant owners argue that formal eating places follow Covid-19 guidelines appropriately and that they should be exempted from night, weekend, and other curbs to ensure business continuity.

“While we understand the government's need to curtail the spread of the virus, I am not sure whether curbing business at eateries will actually help. There is a need to examine who the real super spreaders are,” Kohli says.