Unlock-2: Small businesses pin hopes on tax sops, free movement of people to boost sales

Rutam Vora Ahmedabad | Updated on June 25, 2020 Published on June 25, 2020

Hit by thin foot-falls, restaurants seek GST relief for home-deliveries, takeaways

Small businesses, shop owners, traders, restaurants and hotel owners have eagerly pinned their hopes on the government’s support in the next round of opening up of the economy under ‘Unlock-2’ after over two months of lockdown.

Earlier this month, the Prime Minister Narendra Modi had clarified that there will be no further nation-wide lockdowns and that the country will move ahead for “further unlocking” of the economic activities. But even under ‘Unlock-1’ many businesses were left out from the benefits because of restrictions and lack of government support.

The experience of Unlock-1 (since June 1), for Gujarat-based businesses has been a mixed one. While many saw the economic activities, business engagements and transactions gradually returning on track, a significant number of businesses struggled to survive and stay afloat amid stressed finances, operational restrictions and witnessed a sharp decline in customers.

Unlock 1 redundant for many

Speaking to Businessline, Rohit Khanna, co-founder of Food Entrepreneurs’ Alliance - a Gujarat-based association of over 1,000 restaurants brands, voiced his dissatisfaction. The “night curfew” (between 9 p.m and 5a.m) killed the peak business hours for the sector. Most of the city’s hustle-bustle would come to end by 7 p.m as people would ensure returning to their destinations before 9 p.m. So there was no business in evenings, while day time generated only thin business for them. This made unlock-1 redundant for restaurants.

“The stress levels have increased among the restaurant players. We fear nearly half of the restaurants may eventually shut down permanently because of the operational and financial issues. Unlock-2 should provide extended hours for restaurants at least till 11 p.m,” said Khanna, adding, “The dine-in business has taken a hit due to norms of social distancing and reduced seating capacities. So the home-deliveries and take-away businesses should be incentivised with GST concessions.”

Echoing similar sentiments, traders representatives mentioned that the consumers’ spending priorities have changed and their shopping pattern has changed, too. Trade bodies are making representations to the governments at local level and Central level to implement more open policies during Unlock-2 and allow free movement for people.

Spending on essentials

“The economic crisis has pushed consumers to spend more on essentials than on discretionary items. And this has killed the spirit of small businesses of non-essential items. Retailers are just desperate to sell off his stocks, and not making new orders from wholesalers. We want Unlock-2 to remove all restrictions and let people freely move around by taking safety precautions for themselves. Night curfew had hampered not just restaurant businesses, but also overall small businesses,” said Jayendra Tanna, National President, Federation of All India Vyapar Mandal - a national body representing trade organisations across the India.

On Thursday, the Gujarat Deputy Chief Minister Nitin Patel clarified that the State government is not working on any special concessions or relaxations for Unlock-2. “Prime Minister Narendra Modi has given indications that there will be more and more relaxations going forward. In this regard, the State government will follow the directions give from the Centre. We have not worked out anything separately for unlock-2,” Patel said.

Published on June 25, 2020
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