Food services firm Elior India on Wednesday said the food service sector is expecting up to 70 per cent drop in revenue which will have a cascading effect on various other things amid lockdown extension.
"The food service sector essentially faces the same challenges as the hospitality sector and even somewhat like the aviation sector. Being a USD 7 billion industry in India, it is going to see the most severe impact imaginable," Elior India CEO and MD Sanjay Kumar told PTI.
The sector expects a revenue drop of not less than 60 to 70 per cent, which is going to leave a cascading impact on a host of different things, he added.
"Currently, we employ 5,200 workers and don't believe that going forward, even 25 or 30 per cent of them will be possibly remain employed because the industry is reeling from a huge hit. In the West, the government has reimbursed wages for employees, we don't see that happening here," Kumar said.
Businesses will not be able to afford such large wage bills, he added.
"Shortage of working capital in the food industry is something we have all been mindful of. The removal of GST and the input tax credit has added to the woes of this industry," Kumar said.
Going forward, this industry is going to be reeling for a very long time from the impact of COVID-19. Whether the player is small or big, they will have to take a hit and it will not be a surprise if a third of the companies in this sector close down, he added.
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