Services firms brace for trouble as cases surge. The Indian service industry, which was limping back to normal after suffering from last year’s epidemic, is now once again facing a crisis as a second wave of coronavirus infection passes through the country.
Businesses that provide services such as travel, food, shopping, salons and movies, need more contact or face-to-face contact that they may be avoiding now, preparing for a longer period of struggle, as they thought they had finally emerged from last year’s economic maelstrom.
The rise of Covid’s new lawsuits has prompted a number of national governments to impose new restrictions on economic activity. In Maharashtra, restrictions have been placed on supermarkets, bars, theaters, restaurants, and junk shops by the end of this month.
The Association of India (RAI) is concerned that inflation could cripple the industry. Kumar Rajagopalan, CEO of RAI said that the retail industry will also begin to face the difficult challenges of disbursement due to the closure of shops in the state, while operating costs remain unchanged. Vendors are expected to pay electricity bills, property taxes, among other things, even though they are closed.
The new order will have an impact on the entire shopping environment for the government and the employment of millions, he said. He added saying that about 60-70% of the cost has been fixed. This, along with the low marks, leaves businesses with limited flexibility. Money and taxes for employees make up the bulk of these costs. Operating costs are high, and as most of these are loans, retailers find themselves in dire straits.
At restaurants in Maharashtra, meals will be banned until April 30. Pickup orders, parcels and delivery services will be allowed between 7 a.m. and 8 p.m. during the week. According to the order on weekends, only home delivery will be allowed between 7 a.m. and 8 p.m.
Restaurants have said they can send workers home for a month as they are only allowed to serve the items they pick up and post. They are also considering taking additional costs for vaccinating workers. Pranav Rungta, head of the chapter, in Mumbai at the National Restaurant Association of India said that more senior staff will be asked to go home. Setting limits on delivery until 8pm is also a big problem for the business as most people do not order dinner before 8pm. This could lead to a 50% reduction in meal time orders.
Mall officials said they were closely monitoring the situation. The new guidelines will have a negative impact on retailers, especially small franchisees with individual stores. “It is difficult to reduce short-term costs,” said Rajneesh Mahajan, chief executive officer of Inorbit Malls. On employment, he said the industry would have to work together.
Cinemas are also closed in Mumbai for nearly a month now with a 50% package announced in Karnataka and the closing of the cinema in Rajasthan over the weekend. In April, box office collection will shrink by 200 crore crore as major films delay the release, says film producer, exhibitor and commercial expert Girish Johar.
Kunal Sawhney, vice-president of Carnival Cinemas, is also a bank in southern India to help balance losses from the north.