Food service industry may lose Rs 2 lakh cr

The Indian food service industry, standing at Rs 4.08 lakh crore today, would lose about Rs 2 lakh crore as several bars and restaurants are facing closure.

The Supreme Court had on Friday refused to revisit its order banning liquor vendors within 500 metres of national highways (NH) and state highways (SH) from April 1.

The Hotel and Restaurant Association of Western India (HRAWI), the apex body of bars and restaurants, said it would spell doom for the industry when it gets implemented.

“If figures are to be extrapolated to the whole of India, we are staring at sheer catastrophe, in terms of revenue loss of at least 30% directly for liquor and another 20% on account of food not ordered, relative to alcohol and room guest preferring to stay away from such dry outlets, which are close to the highway.

Excise revenue from alcohol is Rs 12,000 crore per annum which would also become half. The travel and tourism sector contributes 7% of India’s GDP, and generates 37.4 million jobs, but due to this liquor ban, at least 5% or 1 million jobs will be lost,” said Kamlesh Barot, former president, HRAWI.

Maharashtra would face the biggest impact. “An estimated 35,000 restaurants and bars could face closure or downsizing in the Western region alone. This decision may lead to job losses for more than a million employees across India. Businesses cannot be run in an environment of flux or state of uncertainty,” said Dilip Datwani, president, HRAWI.

“Maharashtra alone has 13,655 bars and liquor shops, of which about 290 bars shall be hit only in Mumbai, while in Mumbai Metropolitan Region, 2,000 and in the in rest of Maharashtra 9,925 are at a risk of losing business,” said Barot.

“Only licensed bars will stop serving liquor. Unlicensed bars that operate illegally across the national highway may continue liquor service. Travellers who are really keen on consuming alcohol will find ways and means to procure it, and these steps may not turn out to be sufficient deterrents. Drunken driving is a problem across the world and most countries have evolved more efficient and less harsher measures to counter the menace,” says Bharat Malkani, former president, HRAWI.

Closure of hotels would not only hit tourism in a big way, as India is still considered to be a tourism infra deficient nation, but would also cause huge revenue loss to the exchequer. “Hotels in India are one of the most taxed in the world. The hotels pay an aggregate of direct and indirect taxes to the tune of 38% overall, compared to 5-7% taxes in countries like Japan and China.

Women attack liquor shops in UP

As women take to the streets and attack liquor vends in different parts of the state demanding total prohibition, the new BJP regime in Uttar Pradesh finds itself in a fix, DHNS reports from Lucknow. Several attacks, mainly led by women, on liquor shops have been reported from across the state in the past few days,  triggering law and order concerns. Such incidents have been reported from Hapur, Amroha, Agra town, Kabulpura in Budaon and Varanasi, which is Prime Minister Narendra Modi’s Lok Sabha constituency.