Mumbai eateries take a hit as running cost skyrockets

A BAD RECIPE: More than a hundred eateries in Mumbai shut shop in 2007 alone.

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Mumbai: The restaurant business in Mumbai — one of the most lucrative businesses in the city — has taken a huge hit following spiralling food and running costs. More than a hundred eateries in Mumbai have shut shop in the last year alone.

From your local idli sambar joint to high-end eateries, hoteliers across Mumbai are suffering from some serious indigestion, and the ingredients causing their upset stomachs are high rents, higher taxes, especially VAT at 12.5 per cent, and increasing electricity and cylinder costs — all of which have tripled in the last three years alone.

Vishwanath Rai had to give up his dosa corner in the business district in Fort area, where hotels have been the worst hit.

“The prices kept shooting up so much, that there was no profit, so we had to shut down,” Vishwanath says.

While mid-priced eateries are facing stiff competition from hawkers, many popular high-end eateries in the suburbs too have shut shop due to sky-high rents. Hotel associations are now contemplating a strike if the government does not reduce the VAT.

“We've met the Finance Minister at least 50 times. They just promise but nothing happens,” Vice-President, HARA (Hotel and Restaurant Association) Vasant Shetty complains.