Lack of qual­ity in­fras­truc­ture, in­ad­e­quate skilled man­power ham­per­ing growth of F&B ser­vice industry

FICCI-Grant Thorn­ton Re­port

FICCI Business Digest - - Contents -

While inau­gu­rat­ing the sem­i­nar on 'Un­lock­ing the Po­ten­tial of Growth in Food & Bev­er­age Ser­vice Industry' or­gan­ised by FICCI along with Grant Thorn­ton on May 26, 2015 in New Delhi, Atul Chaturvedi, Joint Sec­re­tary, DIPP, men­tioned that the gov­ern­ment recog­nises the Food & Bev­er­age (F&B) sec­tor's great po­ten­tial for growth and job cre­ation. Hence, it has been iden­ti­fied as a pri­or­ity sec­tor in the Na­tional Manufacturing Pol­icy and is also amongst the top 25 pri­or­ity sec­tors, which are be­ing pro­moted across the globe to at­tract in­vest­ments. Speak­ing about the way for­ward, Chaturvedi cited that the gov­ern­ment is now look­ing at iden­ti­fy­ing po­ten­tial mar­kets and then en­gag­ing with po­ten­tial in­vestors in spec­i­fied and tar­geted in­ter­ac­tions to con­vert prospec­tive in­vest­ments into real ven­tures.

Dr. Arbind Prasad, Di­rec­tor Gen­eral, FICCI, said that the In­dian F&B ser­vice industry is one of the most vi­brant in­dus­tries. Hence un­der­stand­ing the op­por­tu­ni­ties avail­able in this sec­tor, FICCI last year de­cided to cre­ate a sub­com­mit­tee within the Re­tail divi­sion of FICCI. This sub­com­mit­tee as­pires to cre­ate a fo­cused thought-lead­er­ship for this sec­tor. FICCI will en­deav­our to voice the con­cerns of this niche sec­tor to the right author­i­ties.

Piyush Pa­to­dia, Chair­man - FICCI Food Re­tail Ser­vices Task­force & Ex­ec­u­tive Di­rec­tor, Grant Thorn­ton In­dia LLP, said, “For­eign brands need to en­sure that al­though they see In­dia as a large op­por­tu­nity, there needs to be an ap­petite for risk tak­ing. In­dia is a dif­fi­cult ter­rain to op­er­ate out of with mul­ti­ple taxes, com­plex li­cens­ing and high op­er­at­ing costs. In ad­di­tion, tastes and pref­er­ences vary sig­nif­i­cantly based on the lo­ca­tion within In­dia. With cor­rect plan­ning and cus­tomi­sa­tions, com­pa­nies can see ex­plo­sive growth of their con­cept in In­dia.”

Rahul Singh, Founder & CEO, The Beer Café; Zo­ravar Kalra, Founder & Man­ag­ing Di­rec­tor, Mas­sive Res­tau­rants Pvt. Ltd.; Rahul Ku­mar, CEO, Maez One Group Pvt. Ltd and Chetan Arora, De­vel­op­ment Agent, Subway, also ad­dressed the au­di­ence.

The FICCI-Grant Thorn­ton re­port 'Un­lock­ing the po­ten­tial for growth in Food & Bev­er­age Ser­vice Industry' was re­leased dur­ing the sem­i­nar. The re­port fo­cuses on how to im­prove 'Ease of Do­ing Busi­ness' in this sec­tor and make it more at­trac­tive for both In­dian and for­eign in­vestors. The re­port iden­ti­fies the chal­lenges faced by the industry. Lack of qual­ity in­fras­truc­ture and short­age of ad­e­quate skilled man­power are the most crit­i­cal is­sues ham­per­ing the growth of the F&B ser­vice industry in In­dia. The other is­sues faced by the industry are high real es­tate costs, the large num­ber of li­censes re­quired to op­er­ate in the sec­tor and a plethora of taxes, the re­port high­lighted.

The re­port rec­om­mends that the gov­ern­ment's in­ter­ven­tion in cre­at­ing good in­fras­truc­ture and de­vel­op­ing skilled man­power would help boost the growth of the sec­tor. It fur­ther­more pro­poses that real es­tate costs can be re­duced by lob­by­ing with real es­tate de­vel­op­ers to de­velop a bet­ter for­mula of rent shar­ing and de­vel­op­ing in­no­va­tive mod­els for rent. Sim­pli­fied li­cens­ing re­quire­ments with a sin­glewin­dow clear­ance ap­proach and ra­tio­nal­i­sa­tion of taxes levied on the restau­rant industry are a few so­lu­tions pro­posed in the re­port to ef­fec­tively tackle li­cens­ing and tax­a­tion is­sues, faced by the industry.

L to R: Shilpa Gupta, Head - Re­tail / FMCG / Gems&Jew­ellery, FICCI; Deven­dra Chawla, Group Pres­i­dent – Food, FMCG, Brands, Fu­ture Group & Co-Chair, FICCI Food Re­tail Ser­vices Task-force; Dr. Arbind Prasad, Di­rec­tor Gen­eral, FICCI; Atul Chaturvedi, Joint Sec­re­tary, DIPP and Piyush Pa­to­dia, Chair­man - FICCI Food Re­tail Ser­vices Task-force & Ex­ec­u­tive Di­rec­tor, Grant Thorn­ton In­dia.

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