Prime Minister Narendra Modi wants investors to come to India. His government is keen to make the lives of industrialists and entrepreneurs comfortable; in the latest edition of the World Bank's ease of doing business index, India jumped 30 rungs. But there are people in his party who want to make businessmen's lives miserable. The worthies in the Maharashtra government are among those spoilsports.
The state government last month allowed moviegoers to bring outside food to multiplexes. The cinema halls not allowing food have been warned of strict action. Minister of State for Food & Civil Supplies Ravindra Chavan made this announcement in response to a query raised by a Nationalist Congress Party MLC. The move was in response to a public interest litigation (PIL) filed in the Bombay High Court against cinema chains prohibiting personal food and charging high prices for eatables sold inside.
Even before the court could decide over the issue, the Maharashtra government has delivered its own verdict. It is a well-known fact that all manner of people-idealists and public-spirited persons as well as publicity seekers and cranks-keep filing PILs. Any government, Central or state, has to consider every PIL in all seriousness and respond to it keeping in mind the interests of various stakeholders, including businesspersons. But politicians are too willing to succumb to populist pressures, the ease of doing business be damned.
There is a cost to everything-to the spic-n-span environs in a multiplex, to the clean toilets (unlike the stinking ones of the bygone era), to safety and security. And businesspersons also have the right to run their enterprises in the way they deem fit, and to earn profits, so long as they don't violate the law. Besides, there is no compulsion for anybody to visit a multiplex; nor is there any to buy from the in-house eateries. A movie buff can always watch a movie on television for free or buy it online at a much lower price.
Further, watching movie is not something that is essential for living or livelihood. Some justification can be provided for government intervention to keep medicines and medical devices cheap, but why on earth should ministers and bureaucrats should chalk out and implement rules for something as non-essential as cinema watching and that too in multiplexes? Especially as every year they fail spectacularly to keep Mumbai safe during the rainy season.
The Maharashtra government's move, ostensibly pro-consumer, is actually anti-business. The meddlesome diktat, which has the potential of becoming a nationwide abomination, unnecessarily disrupts a sector that is thriving, creating jobs, and contributing to the exchequer. It is like tormenting, if not killing, the goose that lays the golden egg.
The diktat will definitely hurt multiplexes, as the food and beverage segment contributes substantially to their revenue. Take the example of PVR Ltd, a leading player. Out of the total revenue of Rs 422 crore in the nine months of FY16-17, the share of F&B was 27.1 per cent. Moreover, the F&B segment has been showing a rising trend.
"The state government's move to allow cinema-goers to bring food from outside into multiplexes from August 1, could impact operating profit of the industry by 200 bps [2 per cent] or Rs 100 crore, if half of the viewers get their own food and beverages, rating agency Crisil has said," The Hindu reported on August 2.
The state government has failed to foresee the adverse effect its order will have on investor sentiment at large. As it is, Maharashtra, once a favourite of those investing in India, is falling in the ease of doing business in India ranking. Whimsical decisions, in response to frivolous or mischievous petitions, will further erode the attractiveness of the state as an investment destination.
Further, such decisions will encourage anti-business activists to indulge in more petitions. For instance, it can also be argued that luxury hotels allow people to eat home food with some charge for using their restaurant space. By the way, the South Delhi Municipal Corporation came up with a rule some time ago that hotels and restaurants had to let anybody use their washrooms by paying a nominal fee of Rs 5. Why can't a similar rule be extended to using their dining halls?
There will be no end to madness. The least our political masters can do is not avoid instigating insanity.
(Ravi Shanker Kapoor is a journalist and author. He has spent around 25 years in the media. As a freelance journalist, Kapoor has written for a number of leading publications. He has written four books on Indian politics and its associated institutions.)
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)