FICCI urges government to support travel, tourism and hospitality industry in resolving urgent liquidity crisis
New Delhi, June 23 (KNN) The Federation of Indian Chambers of Commerce and Industry (FICCI) on Wednesday urged the government to support the travel, tourism and hospitality industry in resolving the urgent cash crunch.
The industry body said the effect of the pandemic continues to wreak havoc on lives and livelihoods for the second year in a row. As some sectors are slowly opening up again, for the travel, tourism and hospitality industry, the struggle continues to make ends meet.
The industry contributed $ 194 billion to the Indian economy in 2019 and created around 40 million jobs, or 8% of its total employment. The industry shut down due to the pandemic and this created a ripple effect in the industry, leading to the closure of many hotels and businesses and job losses for many of those who depended on this industry for their livelihood, ” he added.
He further said that health experts have predicted that a third wave of COVID-19 is inevitable, adding: âThe government must act now and provide immediate relief measures to resolve the urgent liquidity crisis that is facing facing the industry “.
The FICCI has again asked the government for the moratorium on all working capital, principal, interest payments, loans and overdrafts which ended in August 2020 to be extended for one year, ie August 2021.
The RBI’s resolution framework, which was prepared during the first wave of the pandemic, needs to be reviewed. With the continued impact of Wave 2, it will take at least 4-5 years for the hospitality industry to see a return to some semblance of normalcy in its operations. In this situation, the restructuring period and the ratios must be reviewed. It is imperative that the restructuring period of this sector be extended until March 2024 – 2025, he said.
The FICCI has also called on the government to increase the repayment period of the emergency credit lines guarantee program (“ECLGS”) to 8 years (moratorium of 4 years plus 4 years of repayment). Tour operators, who are among the most affected in this sector, are in dire need of the Service Exports from India Scheme (SEIS) script for fiscal year 2018-2019 which has yet to be paid to them.
This will help them stay somewhat afloat during the crisis. The deferral of GST and tax prepayments at the central government level and the removal of fees for upcoming licenses, permits / renewals and bailouts to fund and support employee salaries will also provide some relief. The government must announce the relief measures now so that the industry has any hope of surviving the crisis, ” he said.
The industry also needs continued government support to revive itself and stay strong in the future. The FICCI recommended that tourism be included in the competing list of the constitution so that the center and the states can define tourism policies for the growth of tourism.
“To revive domestic tourism, the government should grant a tax cut of up to 1.5 lakh rupees for national holiday spending under the Travel Leave Allowance (LTA),” said declared the FICCI.
Key policy changes such as granting infrastructure status to all hotels, granting export status for foreign exchange earnings for inbound tours and hotels, and the creation of a ” Manufacture of attractions âunder Aatmanirbhar Bharat Abhiyan in all states will support the overall development of the sector, he added.