Eat Out to Help Out 

#GS3 #Economy 

Since the lockdown began in India, different bodies representing the country’s hospitality sector, including the National Restaurants Association of India (NRAI) and Indian Hotel and Restaurant Association (AHAR), have repeatedly asked the government for financial assistance to help tide over the crisis.

What is the ‘Eat Out to Help Out’ scheme? 

  • The EOHO Scheme is an economic recovery measure by the UK government to support hospitality businesses as they reopen after the COVID-19 lockdown in the country. 
  • Under the EOHO Scheme, the government would subsidise meals (food and non-alcoholic drinks only) at restaurants by 50 per cent, from Monday to Wednesday every week, all through August. The discount is capped at GBP 10 per head and does not apply to take-away or event catering. 
  • There is no minimum spend and no limit on the number of times customers can avail the offer, since the whole point of the scheme is to encourage a return to dining in restaurants. 

How much will the scheme cost the British government? 

  • When presenting the Plans for Jobs update, the Treasury estimated that EOHO would cost GBP 500 million. However, according to the House of Commons research briefing on the scheme, “the final figure will depend on take up of the scheme and could be higher or lower. If take-up continues at the rate shown over the first two weeks of the Scheme, the cost of the scheme would be around £388 million, less than that forecast.” 

Performance of the scheme  

  • As of August 16, GBP 18 million had been claimed by registered businesses, with 35 million covers having been served until that date. In an official statement on the data released, Chancellor of the Exchequer Rishi Sunak said that this was “equivalent to over half of the UK taking part and supporting local jobs in the hospitality sector”. 

Criticism 

  • In its analysis of the summer economic update, the London-based Institute for Fiscal Studies, a microeconomic research institute, argued that the scheme may have been introduced too early, since it was not yet clear whether the problem was on the demand side, with people being reluctant to go out and eat, or on the supply side, with restaurants unable to serve enough people, thanks to social distancing. 
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