As economy restarts, shut hotels, restaurants await support to survive 

Lockdown relaxations for certain economic activities issued by the Centre came into effect starting Monday, but the hospitality and food and beverage (F&B) industries continue to be indefinitely shut and are awaiting relief from the government.

Operations of restaurants and hotels are nearly halted for around two months now and industry representatives say that in the wake of no revenues, it is high time the government provides support in terms of employee salaries and deferment or waiver of levies.

The Federation of Associations in Indian Tourism & Hospitality (FAITH) has pegged the value at risk (VaR) to Indian tourism at Rs 10 lakh crore, double than its previous estimate. VaR is a statistic that measures and quantifies the level of financial risk within a firm, portfolio or position over a specific time frame.

"FAITH believes this value at risk could go as high as Rs 10 lakh crore, given the way tourism supply chains are breaking down in India across all its key inbound, domestic & outbound markets," a statement from the federation said.

FAITH has also requested the Empowered Group-6 headed by NITI Aayog CEO Amitabh Kant for a COVID-19 Tourism fund with a corpus of minimum Rs 50,000 crore, which can be used by tourism enterprises in India as a 10-year interest-free loan for taking care of their employees.

It has also sought a 12-month full waiver of all banking loans and central and state statutory liabilities, including provident fund (PF), employees' state insurance (ESI), income taxes, GST, fixed power and utilities tariffs, property tax, excise, inter-state tourist transportation taxes and licence fees, without any accumulated or penal interest.

Speaking to IANS, Hotel Association of India's (HAI) Vice President K.B. Kachru said that in the meeting with the NITI Aayog on Monday, discussions were held regarding both the survival and revival of the sector.

"One thing categorically mentioned during the meeting was that at this stage we need to look immediately at the survival process with focus on increasing the moratorium and addressing the issue of statutory liabilities and suspending licences and other related fees," Kachru said.

He said that the association is separately in talks with state governments regarding electricity and power charges and some states are considering the proposal.

Earlier, Kachru, who is also the Chairman Emeritus and Principal Adviser of South Asia, Radisson Hotel Group, had said that the industry is staring at job loss of about 4 crore employees in the absence of immediate support.

Similarly, just like the hospitality sector, the foods and beverage (F&B) industry also has been waiting for government support as no revenue is forthcoming for the last two months, except for the home-delivery orders.

Speaking to IANS, the President of National Restaurant Association of India (NRAI), Anurag Katriar said that the sector is losing the capacity with each passing day to get back on its feet once the lockdown is lifted as no government support is coming.

"If we don't get some relief right now, we will not be in a position to survive. We are not talking about how many businesses may have shut down since we will know that only when we are allowed to reopen," he said.

Stressing that the sector is staring at job loss of 30 per cent of over 20 lakh employees, the industry body chief said that the government should support them in terms of salaries for employees apart from working capital loans at lower rates.

Talking of the home-delivery activity, he said that revenue from this accounts for only around 10 per cent of the total earnings of restaurants and it is not enough for the businesses to survive.

Last month, in a letter to NITI Aayog CEO Amitabh Kant, the NRAI had said that the sector is staring at a 'complete decimation'.

The industry body has sought unemployment pay cover for every employee or at least those covered under the ESIC Act, with immediate effect and till such time that the lockdown is in place.

It has also sought government support to the extent of 50 per cent salary for the employees for the entire financial year 2021, but so far no help has come their way.

"We are almost, in medical parlance, on ventilator support," Katriar said.