5 lakh small, medium restaurants plead govt; seek immediate relief to survive Covid-19

By: |
Published: April 13, 2020 7:41:09 PM

Ease of Doing Business for MSMEs: Restaurants have sought easy availability of working capital without major collaterals at low-interest rates, concessions on utility payments, quick settlement of insurance claims against business loss due to the current crisis, and a direct tax holiday for a year.

“We are probably looking at 15-20 per cent of the restaurants in organized sector shutting down,” said NRAI President Anurag Katriar.

Ease of Doing Business for MSMEs: Over 5 lakh restaurants in the country, almost all of which are MSMEs, have asked the government to fully waive of all renewal fees for licenses and registrations for banquets, bars etc. and also defer all statutory dues by at least next six months to survive the Covid-19 impact. National Restaurant Association of India (NRAI) representing these restaurants in a letter to NITI Aayog CEO Amitabh Kant recently appealed for multiple relief measures to help the restaurant sector, which is “staring at a complete decimation.” “They might somehow survive April but beyond that, it will be very tough. Restaurants have already defaulted. They cannot pay salary for May. We are probably looking at 15-20 per cent of the restaurants in organized sector shutting down,” Anurag Katriar, President, NRAI told Financial Express Online.

Among other key operational relief measures, the association has also sought easy availability of working capital without major collaterals at low-interest rates, concessions on utility payments, quick settlement of insurance claims against business loss due to the current crisis, and a direct tax holiday for a year. Given the livelihood challenges faced by over 7 million people in the restaurant sector due to liquidity crisis at restaurants, NRAI requested Kant to provide for unemployment pay cover for every employee via DBT, 50 per cent salary support for such employees throughout FY21, extending the provident fund contribution scheme to businesses employing up to 1,000 people.

Also read: Covid-19: MSME loan portfolio of NBFCs, MFIs likely to see collections drop post moratorium as well

Finance Minister Nirmala Sitharaman had last month announced that government would contribute 24 per cent of both employee and employer share to the Employees’ Provident Fund for the coming three months. However, this is currently applicable to businesses having up to 100 employees and 90 per cent of them earning less than Rs 15,000 per month. “The overall impact is still unknown. People issues are immediate and more humane than commerce. Operational support is like giving ventilator support so that restaurants don’t die. The third is to give us the opportunity to fight and try to get something out of the whole industry that we run,” said Katriar.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Uber India lays off people as coronavirus lockdown eats up revenues; lets go of this many employees
2Major industries, govt agencies owe about Rs 5 lakh cr in outstanding dues to MSMEs: Nitin Gadkari
3Want to bypass Covid containment zones? Try this technology-backed solution