Commerce and Industry Minister Anand Sharma on Tuesday assured the hotel and restaurant industry that the proposed introduction of Goods and Services Tax (GST) will make things better for the industry.
Sharma was speaking at the launch of the Technopak and National Restaurant Association of India (NRAI) report.
The report stated that the Government can generate an additional revenue of Rs 17,000 –Rs 26,000 crore through closer monitoring of tax collection from the unorganized food services industry.
“The government is also looking at making the approval process simpler. Foreign players still find the segment very lucrative. But it is wrong to think that foreign retailers will impact the growth of domestic players. When McDonalds came to the country there were concerns that it will negatively impact Indian food retailing sector but domestic players like Haldiram’s Bikanerwala and Nathu’s have grown not only in the country but also in the West. Domestic players are all over and they are growing,” Sharma said.
The report pegs the current size of the Indian food service industry at Rs 2,47,680 crore and says that the sector is projected to grow 11% to Rs 4,08,040 crore by 2018.
Restaurant chains including McDonalds and licensed standalone industry will contribute about Rs 11,900 crore in 2013. This revenue contribution is set to double to Rs 25,000 crore by 2018.
“Besides bringing the unorganised players in the ambit of organized food services sector, we want the government to look at the high tax that is levied on restaurants and multiple licences and approvals that restaurants have to seek for starting operations. This is dampening the growth of the industry,” said Samir Kukreja, president, NRAI on launch of the report.
In terms of market segment, quick service restaurants (QSR) and casual dine-in formats account for 74 per cent of the total chain market while cafes account for 12 per cent and the balance of the pie is of fine dining and pubs.
Also present at the launch of the report was Atul Singh, president, Coca Cola India who said that his company will partner with NRAI to give assistance to unorganized dhabas in the country. “This will help them in becoming more organized in this competitive industry,” he said.