industry currents
CII actively campaigns for a better deal for tourism
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OVID-19 has dealt a massive blow to the fortunes of the tourism and hospitality sectors. A clampdown on travel has effectively dried up revenue and raised concerns on the long-term viability of businesses. CII has been in top gear, reaching out to all stakeholders in the government to suggest immediate relief measures for the sectors. The industry body has recently written to the Ministry of Finance, GOI, outlining the Industry's pressing concerns. In a similar exercise, it has requested the tourism secretary to allow tourism-related businesses to function, on the lines of the aviation sector -which has been allowed to resume its services, albeit in a staggered manner. In its letter to Ajay Bhushan Pandey, Finance Secretary and Secretary-Revenue, Ministry of Finance, GOI, CII has asked for eligibility for MSME registration. Referring to the eligibility criteria of MSME registration for medium enterprises, which was currently on an investment of less than `20 crore and a turnover up to `100 crore, Dipak Haksar, Chairman, CII, National Committee on Tourism and Hospitality, has noted that a "large number of fast-growing businesses with true potential" are going to have a higher upfront investment. CII has strongly advocated considering only the turnover criteria, noting that lower investment criterion would only discourage Indian entrepreneurs from investing the right capital for their businesses to grow to their future potential. CII proposed the following turnover level for classification of MSME: a. 'Microenterprise': Any business with a turnover up to `5 crore b. 'Small enterprise': With annual turnover is more than `5 crore but less than `75 crore. c. 'Medium enterprise': businesses with turnover over `5 crore and up to `250 crore (II) Immediate relief: Moratorium & additional working capital limits. CII has been batting for an extension on the moratorium on loans, suggesting that it needs to cover term loans, working capital
loans, overdrafts, and any non-fund-based limits. It has advocated short-term, interestfree loans for rebuilding businesses and immediate transmission to all industry segments, including hotels, tour operators (inbound, domestic), travel agents (online and offline), and any ancillary entity supporting the Industry.
Long term relief: Restructuring of loans CII has argued that the travel and tourism industry is most likely to suffer for an extended period, given the capital-intensive nature of businesses. Most estimates indicate that the Industry will not be able to meet its financing costs for a prolonged period, it says. It has urged the ministry to consider allowing one-time restructuring of loans to
Tourism contributes directly and, through its multiplier effect also indirectly, to job creation and economic recovery.
CII Survey on assessing the impact of COVID-19 on tourism
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t has also surveyed the impact of COVID-19 and lockdown on the tourism and hospitality sector in northern states and UTs. The survey intends to understand the churn in the market. The survey has indicated a significant shift in consumer behavior as more than 70 percent of the respondents have said they would prefer domestic travel only. Over onefourth of respondents have suggested they are equally open to traveling within India and abroad. Interestingly, only 1.4 percent of respondents have indicated a preference for overseas travel. Food & Leisure has emerged the most preferred component among likely travelers, followed by wellness. The survey has also highlighted the impact of COVID-19 in shaping travel preferences. An overwhelming number of respondents (77%) have said they are going to travel to destinations that have been least impacted by the virus. The survey results have indicated that while tourism has taken a visible backseat, people are still looking at the sector for rejuvenation, which gives hope for a revival of its fortunes in the medium to long-term.
the sector from Banks, FI's and NBFC and irrespective of the size of the facility and under any existing framework (i.e., SARFAESI, IBC or any other) without requiring any reporting or provisioning for the lenders or rating downgrade for the borrower. TCS: The proposed TCS rate of 5% in Finance Bill 2020 was kept in abeyance until October 2020, suggesting that the TCS ruling would shift all sales of outbound tourism to overseas suppliers denying the government of GST revenue. CII has recommended a complete waiver on the same. Special Tourism Fund: CII has destination india | june 2020 | 19
mooted formulating a special fund for the vulnerable section of the tourism and hospitality sector, such as self-employed workers, star t-ups, women entrepreneurs, guides, rural continuity, etc. who are dependent on tourism for their livelihood. "Tourism contributes directly and, through its multiplier effect also indirectly, to job creation and economic recovery. Any support at this critical juncture will not only help in mitigating the impact of the crisis and stimulating tourism recovery, it can (also) pay massive returns across the Indian economy," the letter reads.
