Hotels, restaurants may ‘succumb’ by end of the year

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Indian hotels and restaurants are likely to “succumb” by using the end of the year due to the lockdown impact if instant action is not taken through the government, Federation of Hotel Restaurant Associations of India (FHRAI), which represents five lakh restaurants and 55,000 hotels, advised Finance Ministry’s Principal Economic Advisor Sanjeev Sanyal recently.

Ever since lockdown the hotel and restaurant owners have been seeking essential help from the government to assist overcome the COVID burden. The sector, which largely has small and mid-sized businesses, accounts for 12.75 percent of India’s employment out of which 5.56 percent is direct and 7.19 percent indirect employment.

Importantly, the weekend lockdown or partial lockdown imposed in 15 states and union territories, has hit the overall retail sector. Uttar Pradesh, Tamil Nadu, Punjab, Nagaland, Madhya Pradesh, Thiruvananthapuram in Kerala, Jharkhand, Jammu, and Kashmir, Haryana, Chandigarh, Assam, Andaman & Nicobar had imposed weekend lockdown in unlocking 3.0 while Uttarakhand and West Bengal had been partly locked down and Maharashtra’s Thane district had shut shops. Under Unlock 4.0, multiple states such as UP, Punjab, etc have persisted with the weekend lockdown. “Almost 95 percent of retail is MSMEs and they are suffering. All kinds of retailers see around 45 percent in their enterprise at the weekend. Despite protection norms, clients are not willing to come back to the shop,” Kumar Rajagopalan, CEO, Retailers Association of India (RAI) had told financial express online.

Sanyal, but, informed the hoteliers and restaurateurs that “appropriate motion” might be taken towards the banks not following the RBI or the government’s directive. “If something isn’t working, the government will intervene and discover the reasons for it not operating. I would ask the industry to flag unique cases and details of the banks so that we can take measures to address and resolve the troubles,” Sanyal stated including that the 100 percent guarantee that is given to MSMEs is also applicable for the hospitality sector.

The association also informed Sanyal about interaction with the commerce Ministry for “rationalizing and cutting down the variety of licenses under ease of doing business policy. We also apprised him on the unscrupulous licensing laws consisting of copyrights problems,” stated Pradeep Shetty, Joint Secretary, FHRAI. Even as Sanyal asked the association to reconnect on the issue of rationalizing licenses, he urged the members to “focus on available things and try to resolve troubles inside present choices that are not working” The simplest way could be to take examples from the rest of the world where the systems are working effectively. So rather than looking to perfect things, we have to goal at minimum movements for the most outcome, Sanyal added.

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