Last week, just a day prior to finance minister Pranab Mukherjee reading out the Budget speech, we sat down at our neighbourhood restaurant to the comfort of an Indian-Chinese meal. Between two adults and one child, we ordered, not sparingly, but not immodestly either?two appetisers, two main courses, some rice, a cold drink and a bottle of water?and ran up a tab of about R 2,600, of which almost R 600 comprised taxes; a 10% service charge and the rest, the state VAT (we were eating in Noida, just outside Delhi, for the record).
That?s about 25% of our spend in taxes. With this Budget?s proposal to include air-conditioned eateries (and which restaurant isn?t really, at least in the metros these days; even Purani Dilli?s famed Paranthewali Galli has an air-conditioned parantha joint!) in the service tax ambit, the spend will go up even higher and not because we are necessarily indulging in fancier food. That, combined with inflation and the increase in food prices, including those of imported food stuffs like cheese, will mean that we will be paying more for eating out in India than we do in most places in Europe or America (bar, a couple of cities).
A ?good? meal in Europe, which would include a glass of wine, for instance, comes in the vicinity of about euros 20 per person. That?s about R 1,200. In India, where the cost of eating out has risen sharply in the last few years, the average restaurant spend per person at a mid-priced, standalone restaurant in Mumbai and Delhi (Bangalore is still a little cheaper) is R 1,000, sans alcohol and taxes. Even a takeaway meal for a single person, ordered, for instance, to satiate Moti Mahal butter chicken cravings can set you back by a cool R 1,000. A get-together of about ten friends in a slightly trendy place can easily cost you R 20,000. A working lunch of takeaway pizza, plus garlic bread and a cold drink is not exactly loose change, forget speciality restaurants like Wasabi at the Taj, where R 5,000 per person would be what you would set aside for lunch or dinner (and where a single portion, in fact, of say Waghu beef steak can be much more).
On an average, a meal in a five-star hotel comes to about R 2,500 plus per person, without alcohol. But these are 2010 prices. And these figures are zooming up fast. In 2011, these costs are going to go up, but not just thanks to rising taxation. For one, several restaurants, which had not passed on rising food costs (we all know how the prices of veggies, for instance, went through the roof last year) because supplies are contracted out at a fixed price for specific time frames will have to do so now. But demand and supply economics are not the only reason for eating out to be so expensive in India.
Hospitality graduates are often taught a simple formula of arriving at menu costing: Multiply the cost price of any dish by at least three. That becomes the selling price. But that logic usually operates for relatively expensive, non-vegetarian dishes. In fact, if the food cost of a particular dish of truffles or New Zealand lamb chop works out to be high for a restaurant given its foreign sourcing, it is sold at a slightly lower mark up to encourage more diners, making it in reality a value-for-money proposition! Conversely, diners have every right to feel ?cheated? while paying for many salads, most soups, desserts, dals and breads, not to mention starters and mains, where two-four pieces of potatoes or paneer costing R 500-700 constitutes a rip-off. The cost price of most of these dishes is low and they subsidise the fancier things on the menu.
On an average, restaurants operate at food costs ranging from 18-30% of their expense. The rest comprises real estate, staff costs and sundries like breakage and so on, with quite a tidy profit of about 30% that a smart eatery can look forward to at the end of the month after the initial trying phase is over. Or, at least that?s how food consultants project their figures. With rising rentals and staff costs (a waiter with minimal English language skills, for instance, takes home a monthly salary of at least R 10,000 these days),the pressure is always on the kitchen to keep food costs down to the minimum. And it?s not merely a question of using cheaper cooking oil, mushroom, butter or coffee fragrance (instead of the real, more expensive stuff) or gram flour to thicken the gravy instead of cashew paste that cheaper restaurants may do.
Instead, at swisher ?lifestyle? restaurants, chefs, for instance, are in a race against each other to find the most competitive sourcing for their ingredients. If the Vietnamese basa is cheaper than Indian fish(so much so that a kilogram of basa fillet costs less than a kg of Indian surmai, for instance), or if scallops from our neighbouring waters are less expensive than Canadian ones, restaurants will hasten to include the ?exotic? dishes on their menus, not quite passing on the price benefit to ignorant consumers.
Which means that when we eat out, you and I don?t necessarily pay just for what we eat. But then as savvy restaurateurs point out and upwardly-mobile, middle-class perhaps realise, eating out in India today is more about entertainment, a larger lifestyle really than the consumption of mere food. And, tax or no tax, eating out prices are also rising in India because of our nouveau-ness, if you like. Having come into larger disposable incomes than were available to our parents, we are now willing, indeed keen to spend?and be seen spending. Ordering foie gras, or having an expensive bottle of wine, or taking our guests through a special, seven-course degustation menu is all about cultivating an image. And that costs money.
?The writer is a food critic.