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Pre-Budget Reactions By Restaurateurs
Sanjay Vazirani CEO, Foodlink The F&B sector is a big contributor to the economic growth of our country and must be considered a priority in the budget 2023-24. The pandemic has dealt a severe blow to the Sector
Sanjay Vazirani
CEO, Foodlink
The F&B sector is a big contributor to the economic growth of our country and must be considered a priority in the budget 2023-24. The pandemic has dealt a severe blow to the Sector and the government’s support is crucial to restoring normalcy at a faster pace to unleash the full potential of the sector. The two biggest challenges for the sector in the last year have been recovering from the aftermath of COVID and battling rising inflation and food prices. The budget must prioritize growth-oriented measures to stimulate demand and consumption by outlining supportive policies, simplified regulations, skill development initiatives, and simple goods and services tax (GST) norms to aid in the sustenance and development of the industry. Some measures that can help are as follows-
- Provision of 150% depreciation on new investment in capital goods and permitting depreciation charges over an accelerated time frame.
- Reintroduction of “EPCG for Retail Sector”, to create modern infrastructure in the retail sector. Concessional duty benefits under the EPCG scheme to be extended for import or capital goods required by retailers.
- Relief in tariffs and import duties on imported goods and raw materials
- Tax concessions and reduced tax rates
- Simplification of regulatory processes
- Industry status for Catering.
- Allowing set-off of business losses up to 12 years under Section 72 – In view of the monumental losses that occurred to the hospitality industry, it is requested that establishments be allowed to carry forward losses of business for up to 12 years instead of presently allowed 8 financial years.
- Special relief package to be introduced for the F&B industry to disburse in case of any calamity in future.
Sneh Jain
Co-founder and Managing Director, The Baker’s Dozen
Last year, the budget was predominantly inclined towards the masses and promoted a lot of serious aspects starting from prioritising mental health to encouraging the start-up ecosystem. One of the initiatives that we sincerely applaud is the National Education Policy, introduction to new courses & online learning. This year, we hope the new policies drive the Government’s agenda on Ease of Doing Business across the country and encouraging new startup brands. We could therefore expect some tax relaxations for start-up brands by simplifying the tax laws. This is also for lower income individuals so that they have more cash in hand if the standard deduction limit is increased.
Sangram and Prerna Gaikwad
Founders, Zyzzyva – All Day Dining, Pune:
“As a new entrant in the restaurant industry, we have observed that the current tax structure on liquor and food presents a significant challenge for our business. We hope that the upcoming budget will bring in a tax structure that will help new entrants in the restaurant and food and beverage industry as a whole. According to industry data, the growth rate in the industry has almost doubled year-over-year since the easing of lockdown restrictions, making it an attractive option for potential new entrants. Furthermore, with the increasing trend of superfoods and plant-based meats, we hope that the government’s policies will be supportive of this growth, which will not only benefit the industry but also contribute to the overall health of the population. Additionally, with a shortage of trained and skilled workers in the state, we hope that the upcoming budget will address this pressing concern, and bring back the workers who have migrated during the lockdown.”
Viren D’ Silva
Co-founder, GOOD FLIPPIN’ BURGERS
“As the Quick Service Restaurant (QSR) industry continues to grow in India, the government can take several steps to support and promote this sector. One of the key areas that the government can focus on is reducing the overall tax burden on QSR restaurants. This can be achieved by introducing tax exemptions or reducing the GST rate for this sector. This will help to lower the operational costs for QSR restaurants, making it easier for them to sustain their business and expand.
Another area that the government can focus on is providing financial assistance to QSR restaurants. This can be done through grants, subsidies, and low-interest loans, especially for homegrown brands. This will help to provide the necessary capital for QSR restaurants to expand their operations, purchase new equipment, and hire more employees.
The government can focus on providing training and education to QSR employees. This will help improve the quality-of-service QSR restaurants offer and attract more customers.
Overall, the Union Budget 2023 can play a critical role in supporting the QSR sector in India. By introducing policies and programs that focus on reducing the tax burden, providing financial assistance, promoting the sector, and providing training to employees, the government can help to ensure the continued growth and success of QSR restaurants in India.”
Teja Chekuri
Managing Director at Ironhill India.
The f&b industry was one of the hardest hit sectors during the pandemic and though things have improved since then and people have thronged to restaurants, there is still scope for growth.
We are hoping that in this budget, some critical issues such as the introduction of ITC (input tax credit), liquidity focussed credit lines and single window clearance for all restaurant licenses will be looked into.
As per a report by NRAI, about 25 percent of food businesses shut down during the last financial year resulting in 24 lakh job losses. Considering that this sector employs about 73 lakh people, apart from those in ancillaries and the gig economy segment, the sector could do with a high degree of support.
Being one of the highest employment generator segments in the country we would like to work hand in hand with the government to ensure that we tackle the issue on unemployment as well as revenue generation, in every way that we can Considering, the fact that the government has been progressive and is improving the business ecosystem constantly, our hope remains the same this time around – that the ease of doing business in the f&b segment in the country is improved on, and that there are healthy regulations in place so that we may continue to generate employment as well as income for the government. Any measure that helps us become a profitable venture could attract domestic as well as foreign institutional investors to the segment, which could bode extremely well for the economy.
Sangram Sawant
Founder, Pescafresh
We expect that the budget will favour the middle-class by extending concessions on taxes. More large scale projects will induce employment opportunities. From an industry point of view, despite 75% of Indians being non-vegetarians, it still remains a protein deficient country. Increased disposable income for the average Indian will lead to increase in discretionary spending.
Rajat Agrawal
CEO, Barista
The union budget for FY 2023-24 is scheduled soon. Few expectations from the fiscal budget 2023-24 for F&B
- Re-Introduction of Input Tax Credit: Today non availability of input credit is the biggest loss for the F&B industry and has a big bearing on the P&Ls as well as the cash health for the business. Compared to other industries, F&B business stands at a distinct disadvantage. Reintroduction will not only support the F&B business, but will also give a much needed impetus post the pandemic years to cover up on the financial exposures which businesses have gone through.
- Special Incentive schemes and easy credit eco-system for funding growth and on usage of indigenous goods which supports Make in India initiative.
Vicky Bachani
Co owner Farmaaish Vimannagar Pune
Input Tax Credit for restaurants would be the our first and foremost demand, we are probably the only industry without this support and it affects our costs and profits directly, which in turn makes dining out, an expensive affair for the common man. When we talk about restaurants which are on rented premises, there is a huge amount that is paid towards GST and no input is recieved, this gives an unfair advantage to properties that are owned.
Sandeepraj Salian
Co owner Shiv Sagar, Vimannagar Pune
A very important need is to have specialised schemes for the restaurant industry under MSME, we pay heavy electricity and other duties while running this business and there are very few schemes that really help restaurants grow with support during initial set up or even in the developed phase. Restaurants definitely play a major role in the Indian economy, a subsidies should be extended to us at least at the budding stages.
Shikhar Veer Singh
Co-Founder Samosa Singh
The ripple effect of the shutdown presented a significant influence on India’s economy, affecting all business sectors, resulting in low revenue production as a result of the eventual halt/slump in product/service sales. The pandemic forced food start-ups to re-evaluate their management and operation of their businesses, including revisiting their business plans and making several changes to best tackle the evolving business landscape and customer preferences, reduced demand, supply and inventory concerns, etc., to make it simpler and more effective for start-ups to carry out business and bounce back with the new vigour.
With the new impending budget announcement—we are expecting that the government offers some relaxations in eye of the rising costs and reduced margins. The shift in the consumers’ preferences and purchasing patterns, the rising costs and inflation, online deliveries and the change wave induced by the pandemic are further catalyzing the demand for some relaxations in GST percentage and norms by the government to support in the growth and acceleration of this industry and the eventual economic boom—growth of the industry with promising potential and brighter future.
Vinay Maheshwari
Founder & CEO, The Health Factory
The overall F&B Sector is essential to our nation’s growth and development, so it’s critical that the government keeps this sector at the top of the upcoming Union budget for 2023-24. We being pioneers in the industry, we have some expectations from this budget.
- Increased funding under the MSME incubator scheme to support the food & beverages processing sector, as well as measures to connect the MSME sector using the PM Gati Shakti project to leverage the supply chain infrastructure. This will help in increasing the reach to more customers and continue to grow their business.
- Looking forward to changes in Input Tax Credit (ITC) and Special provisions for companies that are committed towards making healthier products under the Make in India initiative. It will give a tremendous boost to companies hit during the pandemic days who are slowly recovering from it.
- Set up a community for young businesses that encourage the consumption of healthier products that are good for one’s overall health, this will boost and promote a healthier lifestyle in the country.
Overall, I am optimistic about the potential for the food and beverage industry in India and look forward to seeing the government’s plans for supporting this sector in the upcoming fiscal budget.
