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Covid restrictions in Maharashtra leave retailers and restaurants in the lurch

After the Brihanmumbai Municipal Corporation announced that it will make the Rapid Antigen Test facility to take samples for Covid-19 testing compulsory for all malls in the city, footfalls have reduced. (Reuters)Premium
After the Brihanmumbai Municipal Corporation announced that it will make the Rapid Antigen Test facility to take samples for Covid-19 testing compulsory for all malls in the city, footfalls have reduced. (Reuters)

  • Maharashtra has around 10,500 hotels and 210,000 restaurants. The sector has seen a sharp drop in revenue as compared to pre-covid time and with no relief in terms of license fees or taxes, the financial burden has increased

Mumbai: Having suffered losses for over seven months in 2020 following the nationwide lockdown, retailers, hoteliers, and restaurateurs are facing another battle for survival with Maharashtra announcing more stringent restrictions to reign in the covid-19 surge.

To contain the covid-19 surge, Maharashtra Chief Minister Uddhav Thackeray on Tuesday announced curfew-like restrictions on the movement of people in the state for 15 days starting 8pm on Wednesday.

Maharashtra is the most severely hit state in the country, accounting for over 50% of covid-19 cases in the country, as per the union health ministry data.

The state government on Tuesday imposed stricter restrictions, exempting only essential services. The chief minister also announced a 5476-crore relief package for 7.78 crore people in the state, mostly daily wage earners, street vendors, construction workers etc.

"No doubt, the surge in cases calls for stringent measures, but how is the industry going to survive just on delivery and takeaways? How is the Government going to compensate for this? This is a question which the Government has to answer to lakhs of families employed and associated with the industry," said Shivanand Shetty, president, Indian Hotel and Restaurant Association (AHAR).

Shetty added that the sector got no support or relief package for the seven months of lockdown last year and the result was evident with many restaurants shutting down forever. This time it is going to be worse, he added.

Maharashtra has around 10,500 hotels and 210,000 restaurants. The sector has seen a sharp drop in revenue as compared to pre-covid time and with no relief in terms of license fees or taxes, the financial burden has increased.

The sector is also seeing an exodus of labour with most hotels and restaurants operating at 50% capacity. Nearly 30-40% of the labour which left last year never returned.

"With the second wave and another round of night curfews and lockdown and this time we expect more of them not to return," said Shetty, adding that last year’s lockdown forced as many as 30% of restaurants to shut permanently and this time more may follow unless the government steps in with a relief package to rescue the industry from the brink of another financial ruin.

Maharashtra already had a weekend lockdown and restricted movement in the state since April 5 which has impacted the local businesses, resulting in an exodus of migrant labourers.

"I used to make at least 60,000 a month on sales but with the lockdown in place since April 5, I have done business of only 6,800 so far. And with a lockdown during this Navratri, I will suffer losses," said a shop owner of religious items in Navi Mumbai. He added that due to fear of the lockdown, two of his workers have gone back to Madhya Pradesh.

According to Retailers Association of India (RAI), 60-70% of costs for retailers are fixed costs. Rents and salaries to employees make a large part of this cost, along with electricity bills, property taxes, among others.

Besides, with the majority of retailers operating on borrowed capital, such lack of business will leave them in a deep liquidity crisis.

"We have been observing all standard operating procedures with regard to covid-19 but after the Brihanmumbai Municipal Corporation announced that it will make the Rapid Antigen Test facility to take samples for Covid-19 testing compulsory for all malls in the city, footfalls have reduced. Now with the lockdown, the business will be impacted severely," said an apparel retailer from Mumbai.

RAI had appealed to the Ministry of Health & Family Welfare to consider prioritizing vaccination for the frontline retail workers. Nearly 90% of the frontline retail workforce is less than the age of 45 years.

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