Need for a new Tourism Policy; Grant infrastructure status to the hospitality sector, Create a separate Tourism fund 12-month waiver of statutory dues, Lending to Tourism sector MSMEs to be treated under ‘Priority Sector lending’
The COVID-19 has severely affected all sections of the economy. Travel and Tourism has been severely impacted due to the lockdown with the restriction on movement, operations of hotels and an overall fear of travelling. As a major part of the economy, India’s travel and tourism industry contributed USD 194 billion to the Indian economy in 2019 which helped it gain the 10th spot globally, in terms of contribution to the global industry GDP. The industry also created around 40 million jobs, i.e. 8% of its total employment, according to WTTC. FICCI urges the government to support the Indian Travel & Tourism industry which is critical in the revival and survival of this sector.
Dr Sangita Reddy, President, FICCI said, “Travel and Tourism Industry is one of the most affected sectors due to the pandemic as everything came to a standstill and will take longer to revive. The industry needs major support from the Government to survive and revive. It is critical to keep the sector alive as they serve as a critical infrastructure in the development of an economy.”
Dr Jyotsna Suri, Past President, FICCI & Chairperson, FICCI Tourism Committee & CMD, The Lalit Suri Hospitality Group, said, “The support by the Government is critical to help the Travel and Tourism Industry to get through this crisis. A waiver for twelve months of all statutory dues is urgently required with respect to license fees, property tax and excise fees. Bars in hotels should be allowed to open and liquor should also be allowed to be served in restaurants as well. As per the recent MHA order on unlock 4.0, there is no clarity on this. Moreover, banqueting/meetings should be permitted as per the size of the hall.” She added, “A national tourism policy should be issued by the Ministry of Tourism, Government of India which covers common protocols for entry of a tourist into a state. This will act as a uniform guideline for all states to follow.”
Mr Dipak Deva, Co-Chairman, FICCI Tourism Committee and Managing Director, SITA, TCI & Distant Frontier said, “The Service Exports from India Scheme (SEIS) scrips which is due to the tour operators for the financial year 2018-2019 must be paid at the earliest. This is only possible if the Government starts accepting the forms. This amount of SEIS will help all destination management companies in tiding over this crisis period with the much-needed working capital.” “India is a large country and a bilateral travel bubble for international travellers should be done on a regional basis for example Russia with Goa. This will help create demand for this winter season, which is not looking promising,” Mr Deva added.
Mr JK Mohanty, Co-Chairman, FICCI Tourism Committee & CMD, Swosti Group, said, “Hotels should be given permission to host all kinds of banquets and conference in the hotel, with a ceiling of 50% of venue capacity and maintaining social distancing norm to allow hotels to earn some revenue when other source of business has dried up.” He said, “The interest rate charged by the banks on the moratorium is very high. The Government is requested to look into this and reduce the rate of interest.”
Need for policy intervention to minimise impact of COVID-19 on economy: FICCI
There is an urgent need to take immediate steps to contain the spread of coronavirus and address key pain areas of the industry which can help in minimising its impact on Indian economy and businesses, the Federation of Indian Chambers of Commerce and Industry (FICCI) had said in March 2020 earlier. A combination of monetary, fiscal and financial market measures is needed to help the businesses and people cope with the crisis, it said in a report titled ‘Impact of COVID-19 on Indian Economy.’
“The outbreak has presented fresh challenges for the Indian economy now, causing a severe disruptive impact on both demand and supply-side elements which has the potential to derail India’s growth story,” said the report. The report contains key findings of a recent survey which shows that besides the direct impact on demand and supply of goods and services, businesses are also facing reduced cash flows due to slowing economic activity.
This, in turn, is having an impact on all payments including to those for employees, interest, loan repayments and taxes.
According to the survey, a significant 53 per cent of Indian businesses indicate the marked impact of coronavirus pandemic on business operations even at early stages.
The pandemic has significantly impacted the cash flow at organisations with almost 80 per cent reporting a decrease in cash flow. It has had a major impact on the supply chains as more than 60 per cent respondents indicated that their supply chains were affected.
The companies also highlighted that they are closely monitoring the situation and expect the impact of the pandemic on the supply chain to worsen further. Nearly 42 per cent of the respondents feel that it could take up to three months for normalcy to return.
“The government and Reserve Bank of India (RBI) need to support the industry and economy at this juncture by bringing down the cost of funds further through a reduction in policy rates (say by about 100 basis points),” said the report.
Besides, steps should be taken to maintain liquidity at surplus levels and provide special liquidity support for any companies, non-banking finance companies and banks that come under strain due to intensifying risk aversion in financial markets or due to large demand shock.
Easier credit facilities must be enabled to affected sections of the businesses that operate on very short financial cycles and will be forced to stop production and trading for financial wants.
The government and central bank should direct banks not to stop disbursement of loans under the expectation of project delays due to COVID-19.
Credit limits for all regular banking accounts should be increased by 25 per cent across the board. Furthermore, flexibility needs to be given to the banking system to reschedule payment terms without the need for provisioning, said the report.
Tourism bodies demand extension of RBI moratorium, interest waiver to tide over COVID-19 crisis
Tourism stakeholders have raised concerns that the government failed to address the survival crisis being faced by the industry in the wake of the coronavirus pandemic and said immediate steps need to be taken to help out the sector.
This was conveyed in a video conference meeting with senior officers of the Ministry of Tourism in April .
The Federation of Associations in Indian Tourism & Hospitality (FAITH), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), PHD Chamber of Commerce and Industry (PHDCCI) and Internet and Mobile Association of India (IMAI) participated in the meeting.
They demanded that the RBI’s three-month moratorium on loan repayments amid disruptions caused by the coronavirus outbreak be extended to 12 months and that the interest accrual should stop during that period.
The tourism bodies also suggested that some loans for the industry (tourism) should be restructured.
“Secretary-Tourism updated us that across all the key ministries of the government, it has been widely acknowledged and accepted that Indian tourism industry will be one of the worst hit from this pandemic. He mentioned that this is of very high concern to the government and this acceptance, itself, within the government is a big move forward for us. We hope that our relief measures will be prioritised accordingly soon, Ashish Gupta of FAITH who attended the meeting said.
In a statement, the tourism ministry said that the industry put forth a number of ideas and suggestions for tiding over the crisis created by COVID-19 in the sector of tourism and hospitality.
“The ministry on its part shared the concerns and also assured the associations that the government was very much with them in this grim hour and that it would work towards the suggestions put forth. A lot of thrust on promoting domestic tourism was a common takeaway, it said. “The ministry is using its social media handles to create awareness on the need to stay at home and be safe in the period of lockdown, and prepare to travel once the world opens up,” the statement said.
It said that in the meantime, the course modules of the Institutes of Hotel Management under the ministry are being held online, and the faculty and students are using technology to remain abreast with their course curriculum.
