Budget 2024: 6 Key Areas Restaurateurs want Govt to Work upon
Budget 2024: 6 Key Areas Restaurateurs want Govt to Work upon

As we move closer to the Union Budget 2024, like every other sector, restaurant and food & beverages sector have high expectations from the government. And, are looking forward to some changes that they are demanding for long from the government. From prioritizing enhanced infrastructure to policies that will cultivate a thriving economic infrastructure. Meanwhile, as inflation had led to a rise in the cost of products and raw materials, the government allowing input tax credit could prove to be a boon for the sector.

Here are the Top 6 Demands that Restaurant leaders have from the government in the upcoming union budget: 

An Ease in Policies: “Over the past few years, the restaurant industry has not only contributed substantially to economic growth but has also been a steadfast source of employment generation. As we anticipate the upcoming Union Budget, our focus remains on policies that will cultivate a thriving economic environment for sustained growth of our industry,” shared Amit Jatia, Chairperson, Westlife Foodworld Ltd. He also pointed that, they also advocate for policies supporting the comprehensive growth of the restaurant industry. This includes measures to fortify the agriculture sector and enhance the supply chain infrastructure, especially pertaining to freezers. We acknowledge the government's past decisions favoring agriculture and allied sectors and look forward to continued support.

Renew GST Structure: One critical aspect that restaurant owners are keen on watching is the existing GST structure, particularly concerning input tax credit. “The current 5% GST rate on restaurants, bereft of the input tax credit, presents a potential hurdle, especially in capital expenditure where input tax credit is not available. We propose a nuanced approach – offering restaurants the choice between a 5% GST rate and a rate that includes input tax credit. This, we believe, would be mutually beneficial for the government and the industry, fostering a more conducive growth environment,” added Jatia. 

Enhancing Economic Growth: “As industry leaders, we strongly encourage the government to prioritize enhancing infrastructure, alleviating GST and tax burdens, streamlining licensing procedures, and offering accessible financing for the food and beverage sector. This sector employs 7.5 million individuals, and we are dedicated to advancing economic growth and fostering equitable opportunities. We anticipate that the government will engage all stakeholders in pursuing a robust and prosperous future,” pointed Teja Chekuri, Managing Partner at Ironhill India & Global Restaurateur.

Commenting on the same, Singeshwar Singh- Founder, Sinberg Hospitality, said, “Our expectations extend to the budget reflecting a dedicated commitment to a well-supported sector, acknowledging its substantial contribution to the broader economic revival. By prioritizing these facets, we envision a budget that allocates resources and strategically positions the hospitality industry as a key driver of sustained economic recovery. Additionally, we look forward to the budget addressing challenges related to liquor licensing, facilitating a more conducive environment for responsible alcohol service.

Reduction of Interest rate & Income Tax: “The interest rate for MSME sector starts at 7.65% at the recent. This rate of interest can be reduced and loan disbursal must be expanded. Simultaneously, streamlining income tax by reducing it for such sectors can posit a relief to the restaurant industry,” mentioned Debaditya Chaudhury, Managing Director of Chowman, Oudh 1590 & Chapter 2.

Commenting on the same, Dawn Thomas, Co-founder, VRO Hospitality, added, "With demand all-time high in hospitality, we are expecting a transformative year ahead. The upcoming budget holds the key to unlocking innovation and progress. As pioneers in these industries, we approach the budget with optimism, anticipating policies that encourage investment in cutting-edge technologies to enhance guest experiences in our sector and elevate healthcare services. We seek a budget that fosters a collaborative ecosystem, providing support for startups to flourish and contribute meaningfully to the growth of this sectors. A forward-looking budget will not only fuel innovation but also create a resilient foundation for the future of hospitality in our nation."

Streamlining Liquor License: “The budget prioritizes Progressive cuisines and streamlines liquor licensing for culinary tourism and operational ease. However, the hospitality sector grapples with increasing food procurement costs amid rising expenses, commodity price fluctuations, and inflation. Businesses must strategize with alternative sourcing and cost-effective supply chains for profitability. Addressing these challenges requires careful planning and innovative solutions,” commented Saurabh Luthra, Restaurateur, Owner & Founder, Chairman- Romeo Lane, Birch By Romeo Lane & Mama Buoi.

A Need for a Separate Ministry: “The Restaurant Industry is a vital contributor to the national economy, generating over 7.20 million direct jobs and boasting an annual turnover of around INR 4.23 lakh crores. Despite being one of the sectors hit hardest by the pandemic, the industry has displayed resilience and is on a steady path to recovery. In light of this, I would like to emphasise the need for policy and budgetary support in the upcoming budget to propel the sector & accelerated growth. The key areas of focus include the restoration of the GST Input Tax Credit, reinstating the Service Export from India Scheme, establishing a dedicated Food Services Ministry, according to industry status, reducing GST on eco-friendly materials, addressing GST on commercial rentals, rationalising licences and NOCs, ensuring equitable e-commerce policies, extending operating hours, implementing targeted subsidy schemes for SMEs, and introducing an employee welfare plan. These measures will not only boost the overall size of the industry but also generate significant employment opportunities, contributing to the country's economic growth,” pointed Pranav Rungta, Director, Mint Hospitality Pvt. Ltd.

Hence, as we look ahead with optimism, the industry look forward for a budget to recognize the pivotal role played by the restaurant industry in India's economic landscape.

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