Why Not 'Serve in India' if We Have 'Make in India'

RAHUL SINGH, Founder & CEO, The Beer Café, recently took over as the new President of the National Restaurant Association of India after Riyaaz Amlani, CEO & MD, Impresario Entertainment & Hospitality Pvt. Ltd. resigned from his duties due to health reasons. In a conversation with BW Hotelier, Singh told us about his plans with his new position.

Q. As the President of NRAI, what are the new developments you are planning for?

NRAI represents over 1,00,000 restaurants. As the President, my primary role is to advance the mission of our association.  We dedicate our time and effort towards our members on what matters most for their success and growth – whether that’s protecting their economic interests or sharing best practices and innovation.

I am honoured to carry forward the 35 year legacy of our Association. I will strive to lead the Indian restaurant industry into a new era of prosperity, participation and positive perception which advances and safeguards the entrepreneurial spirit.

I would be also be focusing on network events and research resources which will move our industry forward by finding answers to the tough questions and distilling complex information into practical knowledge.

Q. With the new development news on GST, what is the approach of NRAI towards it?

We applaud the reduction of GST slab to probably the best in the world. This will bring more players into the formal economy as well as create consumer demand. However, the very concept of ITC is central to and is in fact the raison d’être of GST, which is to prevent cascading of taxes (tax over tax). Any increase in cost due to denial of ITC does get passed on to the consumer and is also discriminatory in nature.

There are three B2B service industries closely linked with us, which are banking, insurance and real estate. Post GST, they have been allowed ITC on any supply of goods including capital goods. Banks have not lowered their merchant commissions nor have rents been reduced while they have taken full ITC benefit. In fact, certain markets in India are feted for charging high rents with media articles celebrating how they are among the top 10 rentals in the world. Nobody seems to be questioning their profiteering. If they lower the cost to us, we will be more than happy to pass the benefit on to consumers. Paradoxically, we do operate in an environment with first world rentals and third world sales.

ITC also makes us a quasi-gatekeeper for the government. In order to claim tax credit, we were ensuring that everyone from our landlords, supply chain, even the unregistered vendor, to transporters complied with GST to be able to avail tax credit. Now we are the only industry without ITC and hope that the taxes we pay our vendors actually reach the exchequer.

Q. Having said that Restaurant Sector in India is growing rapidly, where and how do you see the Government should intervene?

We are an industry worth Rs 3,52,000 crore which is expected to grow to Rs 5,52,000 crore by 2022. For an industry of this size and generating over 8 million jobs, there isn’t any dedicated ministry. It takes over two dozen licences and permissions to be able to serve a sandwich. All we want is a single window clearance and certainty of business.

Rather than serving our customers, most of our time is spent in running around departments. We have dedicated ministries and policies for IT and every other sector. ‘Serve in India’ does sound less enticing than Make in India, Invest in India or Digital India, but doesn’t it make sense if development and employment are key national priorities?

Q. What is your expectation from the new designation?

Restaurant sector is the third largest industry after retail and insurance in the service sector. Currently, only a third of the restaurant industry is organised. I expect this share to increase, which will naturally see the balance shift towards formalisation, compliances to food safety and taxation.  I believe that there is strength in numbers. When we come together as an industry, our collective voice is stronger and our impact is greater than when any of us stands alone. I expect a larger membership base so that our entrepreneurial dream is safeguarded and advanced. 

Unlike other service sectors, ours is under-emphasised and under-promoted by the government. As automation is likely to hit most of the service industries, I expect the restaurant sector to be the dominant employment generator of the nation.