
Restaurant body NRAI writes to FM seeking support for the industry in upcoming budget
National Restaurant Association of India (NRAI) has written a letter to the finance minister, Nirmala Sitharaman seeking certain policy and budgetary support, which it claims, will accelerate the pace of growth of Indian restaurant industry.
Despite its vibrant growth trajectory, letter states, the sector faces several challenges, including rising input costs, denial of input tax credit, complex regulatory compliances, delivery dynamics and limited operating hours. NRA lists a few recommendations for the upcoming budget which it states will be a tremendous help towards the development of the sector.
Some of the key suggestions include long pending demands of restoration of GST input tax credit, grant of industry status and a dedicated ministry for service industry. NRAI has also requested for simplified and standardised licence policy applicable across the country that cover issues related to food safety, hygiene, environment, human safety, labour and taxation. It has also suggested considering the current lifestyle requirements of the citizens at large, the industry should be permitted longer or 24x7 operating hours across the country.
Some other requests include review of notification for GST on commercial leases through RCM, reduction of GST on bagasse and other eco friendly material, reduction of GST on commercial rentals, subsidies on essential ingredients, utilities, and waste management to reduce operational costs for struggling restaurants, particularly in smaller towns and cities.
Restaurant body has also requested to have some innovative welfare plans funded by the central and state Government for their employees to help during employment and after and stresses on an equitable and fair e-commerce policy where restaurants, delivery partners and consumers are protected from potentially exploitative practices.
The restaurant industry, the letter states, is a significant contributor to the nation’s overall economy, helps generate employment, increases tax revenues, drives consumption, promotes tourism, and buys goods and services from from several other industries and sectors which are dependent on it and are positively affected by it. Apart from contributing significantly to the direct and indirect tax revenues, NRAI asserts, the restaurant industry is also one of the highest employment creators in India, currently employing over 8.50 million Indians directly in the sector. With an annual turnover of approximately INR 5.69 lakh crore, expected to reach ₹7.8 lakh crore and grow at an 8.1% CAGR by 2028, the restaurant Industry is the third largest after retail and insurance in the services segment, the letter states.
Sagar Daryani, NRAI President says, “The food services industry is critical to India's economy, providing significant revenue to the government, employment, and consumption. Despite its potential, the sector faces challenges which restrict its growth and expansion. To address these challenges, timely support and reforms are required.”
He further adds, “Balanced and fair policies will not only unlock the industry's maximum potential but will also ensure long-term growth, benefiting millions of employees, consumers, and businesses while reinforcing its position as a key economic driver.”
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