Coronavirus pandemic | Restaurant body seeks relief package, writes to NITI Aayog CEO

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The National Restaurant Association of India (NRAI) has sought relief for the industry from government think-tank Niti Aayog, saying the lockdown had hit the business hard and led to job losses following the coronavirus outbreak.

In an April 9 letter, a copy of which has been seen by Moneycontrol, NRAI has requested Niti Aayog chief executive officer Amitabh Kant that licence renewals, permits and registrations be put on hold for six months. It has also sought a discount in utility rates to manage cash flows as businesses have been closed for more than three weeks now.

“Once a restaurant is set up, all the operating costs are incurred on a credit basis. With zero revenues, there is absolutely no buffer. At this crucial juncture, we need to focus on both, lives and livelihood. I implore the government to share the contagion burden,” said Rahul Singh, founder of The Beer Café, and a trustee of NRAI.

The letter to Kant comes a few days after the industry body wrote to Finance Minister Nirmala Sitharaman, requesting relief measures. Not just restaurants, the food and beverage industry, on the whole, has been upended as restriction of movement and travel a toll on business.

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The three-week lockdown announced to check the spread of coronavirus ends on April 14 but several states have already extended the restrictions by two weeks to the end of April.

Prime Minister Narendra Modi will on the morning of April 14 address the nation once again to spell out the plan for the days ahead, as the number of confirmed cases in India inch close to 9,400, so far, with 324 deaths.

The industry was looking at businesses failing and more people getting unemployed as the lockdown was set to be extended across the country, the letter said. Major cities like Bengaluru, Mumbai, and Kolkata have already announced an extension of the lockdown.

The association claims to represents more than 5 lakh restaurants and 70 lakh employees with a total business turnover of more than Rs 4 lakh crore.

NRAI has also requested the government to declare force majeure, which will help many businesses hit by the pandemic. It would save litigation costs once the business gets normal.

Typically, the force majeure clause is invoked for unforeseeable circumstances, including natural disasters, war or war-like situations, epidemics or pandemics, that prevent fulfilling of a contract.

To protect the employees, the association has requested the government to offer some support in terms of unemployment protection until March 2021. The protection could be in terms of cash and free food grains.

It also said that the government’s support for provident fund contributions should be extended to business establishments with 1,000 employees with 50% of them working at minimum wages level.

“SMEs can at best comply with the request to continue employment during the lockdown, but to expect sustenance is not only unfair but also practically impossible,” Singh said.

To provide a cushion to small business and their employees, the government has said it will pay the employee provident fund contribution, both of the employer and the employee (12 percent each), for the next three months for establishments employing up to 100 people, 90 percent of which earn ₹15,000 per month.