Among the sectors worst affected by the prevailing lockdown to combat the Covid-19 is the hospitality industry. Anurag Katriar, a restaurateur and president of National Restaurant Association of India (NRAI), which represents the interests of over five lakh units, speaks to Amin Ali about how the government can help the sector cope:

With restaurants across the country being shut, what is your immediate assessment of the business impact?

There is complete lockdown and we understand and assert that half measures won’t have an impact. Completely shutting down everything is the only way to prevent the present situation from turning into a catastrophe. It is difficult to assess a rupee value impact but just to give a perspective based on various reports, organised restaurant industry does business worth Rs 1.75 lakh crore per annum. If we are looking at three months shut down, we are looking at a loss of Rs 40-50 thousand crore.

How do you plan to tackle the present situation? 

Ours is a business where income has stopped but expenses have not. What we have suggested to all our member restaurants is to maintain the status quo till March 31. My advice has been not to lay off anyone. In case we must reduce the operation cost by 50%, rather than sacking people it is best to cut the salaries by 50%. We are talking about taking care of people right now. Government needs to step in. People working at entry level or earning Rs 18,000 or less need support. These people need to be taken care of. In such challenging times, it is not about intent. It is about lack of funds. We are looking at a very serious situation post March 31.

What kind of help do you expect the government to provide?

The government should immediately announce a couple of things. Defer statutory payments such as GST, advance tax, duties and VAT at state levels. This is time for licence renewals and maybe government can announce extension of licences for a quarter without fee. And most important, restoring input tax credit to industry. Government can give moratorium on bank loan payments so cash flow can be used to make payments to marginal suppliers and workforce.

We need to use money in a way that country stays alive. Taxes can wait at this time. We need to defer everything. Government needs to bring a clause that we must use money [first] for suppliers and workers. A landlord not getting rent for two months may not die, but a worker not getting salary of Rs 15,000 may not have milk to drink. It is needs versus profit right now. We need to purely look at needs now. We need to somehow preserve cash flow to fulfil needs.

Second, in case of loss of business, settlements need to happen fast. Authorities sitting with money need to bring it out fast. Companies have a wage bill every month. These wage bills support families. If I do not take a salary, my kitchen will continue for few months. But we employ lakhs of people and they will not be able to survive. Cash flow is the need of the hour and government needs to ensure that.

What will be the impact on jobs due to this lockdown?

Various reports suggest we employ 7.3-7.5 million people. Even 20% cut would mean over a million jobs lost. This doesn’t look like it’s going away in a week. If government can come up with things like salaries through ESIC [Employees’ State Insurance Corporation], that will be a big help. It will take a lot of time for the industry to come up. We are a discretionary expense. We are the first to fall and last to get up.

While people are looking at industry leaders to step up and set an example, restaurant industry is not seen to be doing enough and expects government to bail it out.

We suffer from an image issue. Restaurants are only seen as an upmarket, debauched drinking space reeking of prosperity. No one realises we have the highest failure rate. 81% restaurants do not last 30 months. This sector was suffering anyway. It is a tough industry to work in. Anyone can go on to the RoC [Registrar of Companies] website and check what we go through.

I am not seeking alms. Government is a stakeholder in the ecosystem. They regulate us. I am seeking help for a sector that employs the highest number of marginal Indians. We are a sector that provides jobs to Indians that many specialised sectors such as banking or IT won’t. Criticism of restaurant industry is not fair. We are only airing our concerns and await directions from government as after March 31 many restaurateurs will be compelled to shut shop.