The hotel industry needs to be granted infrastructure status which will allow them to avail better infrastructure lending rates with access to larger amounts of funds as external commercial borrowings, said the FICCI-Grant Thornton Report ‘Travel and Tourism: Survive, Revive and Thrive in Times of COVID-19’, which has suggested measures to revive the hotels, aviation sector, travel agents, tour operators, amusement parks, ground transport industry.
The report, a copy of which was accessed by this writer,highlights that there is an urgent need to take immediate steps to not only contain the spread of the virus but also to address the key pain areas of the industry to minimise the impact of the outbreak on the Indian economy and businesses.
The demands made to get back the hospitality, travel and tourism industry on track are granting export status to the industry under Section 2 (6) of IGST Act for foreign exchange earnings. Draft National Tourism Policy to aid collaboration between the union and state ministers of tourism to develop and promote India in domestic and foreign markets alike and 6-month moratorium to be extended to a minimum 12-month moratorium period on all working capital, principal, interest payments, loans and overdrafts.
The report also says banks should permit one-time rescheduling of principal/interest dues in line with the estimated cash flows of each project post recovery from COVID-19 without treating it as restructuring, reclassification/downgrading in asset qualification and requirement of additional provisioning. A 12-month waiver of all statutory dues including customs, excise and license fees and increase in insurance premiums and stimulus package to provide salary support to businesses.
Dipak Deva, Co-Chairman, FICCI Tourism Committee & MD, SITA, TCI & Distant Frontiers said, «This is the opportune time for the government to grant export status to the industry under Section 2 (6) of IGST Act for foreign exchange earnings. The benefits from this will make us more competitive.»
The report further states that ESI contribution to be deferred for 12 months. Insurance corpus of ESI should be used to provide wages to all covered workers. Waiver of GST on products and services offered by the industry for 12 months followed by a standard 5% GST on all products and services till 31 March 2022. Direct cash support for the aviation sector (airlines, ground handling and airports). Waiver of parking and landing charges. Shortterm, interest-free or lowinterest loans for rebuilding businesses in the form of term loans and working capital loans. Create a separate Tourism Fund under the aegis of Ministry of Tourism, accessible to the industry as a collateral free, 10 year loan, interest free for the first two years and minimal rate of interest for the remaining eight years to support businesses stabilise in this time of crisis, the report states.
Dilip Chenoy, Secretary General, FICCI said that travel and tourism sector has been greatly impacted by COVID-19 and has impacted this sector since the start of 2020.
Overall the report suggests that a combination of monetary, fiscal and financial market measures is needed to help the businesses and people cope with the crisis. Therefore, to be able to frame correct actions and policy measures, it is important to understand the specific problems. This alone can enable the government to take appropriate measures. The Indian travel and tourism industry has a significant impact on the economic growth of India as well as employs tens of millions of people.
Vinod Zutshi, Former Secretary, Ministry of Tourism, Govt of India while highlighting the opportunities in the sector said, “We must focus on increasing investment in the emerging technologies and skill development of the workforce which are required for the new normal scenario.”
He further added that despite COVID-19 crisis, the government has opened the economy including the travel and tourism. “India is the front runner and we are opening travel and tourism faster than many other countries,” said Zutshi.
Dr Jyotsna Suri, Past President, FICCI and Chairperson , FICCI Tourism Committee and Chairman and Managing Director, The Lalit Suri Hospitality Group said that as an industry we are optimistic and resilient. “If the Centre and the State governments along with all stakeholders work together, there is nothing stopping the travel and tourism sector to be the front runner to kick start the Indian economy.”