ANALYSIS

STIMULUS PACKAGE

DOES IT REALLY MEAN TO IMPETUS GROWTH AND EMPLOYMENT?

Rajesh Tiwari

The Government of India announced Stimulus Package – for tourism and hospitality sector (first and worst industry affected by the spread out of Covid-19) atlast by recognisng the demand of the industry stakeholders facing unprecedented difficult situation and fighting for its survival. In an attempt to understand its importance and relief, Whereabouts interacted with the representatives of the sector to know that ‘Is it what the industry wanted from the Government as a relief to minimise the adverse impact of the pandemic? Among varied opinions i. e. extention of free visa deadline, interest free loan, one time financial assistance, rebates and moratoriums, one thing is clear that the Stimulus Package – in its current form, fails to attract the industry stakholders for various reasons. Find out the detailed reactions from the leading industry associations and representatives.

FIVE LAKHS FREE VISAS, LOAN GUARANTEE SCHEME

Union Finance & Corporate Affairs Minister Nirmala Sitharaman announced a slew of measures to provide relief to diverse sectors affected by the second wave of COVID-19 pandemic. The measures announced aims to provide impetus for growth and employment.

FREE ONE MONTH TOURIST VISA TO 5 LAKH TOURISTS

Free one month tourist visa to 5 lakh tourists is aimed at boosting the tourism and hospitality sector. It envisages that once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued free of charge to visit India. However, the benefit will be available only once per tourist. The facility will be applicable till 31st March, 2022 or till 5 lakh visas are issued, whichever is earlier. Total financial implications of the scheme to the government will be Rs 100 crore.

LOAN GUARANTEE SCHEME FOR TOURISM STAKEHOLDERS

Under new ‘Loan Guarantee Scheme’ for COVID- 19 affected sectors, working capital/ personal loans will be provided to people in tourism sector to discharge liabilities and restart businesses impacted due to the pandemic. The scheme will cover 10,700 Regional Level Tourist Guides recognised by Ministry of Tourism and Tourist Guides recognised by the State Governments, and about 1,000 Travel and Tourism Stakeholders (TTS) recognised by Ministry of Tourism.

Travel and tourism stakeholders will be eligible to get a loan up to Rs. 10 lakh each while tourist guides can avail loan up to Rs 1 lakh each. There will be no processing charges, waiver of foreclosure/prepayment charges and no requirement of additional collateral. Scheme to be administered by the Ministry of Tourism through NCGTC.

EXTEND FREE VISA FOR NEXT TWO YEARS

While reacting to the Stimulus Package announced by the Government, India Convention Promotion Bureau’s (ICPB) Chairman Amaresh Tiwari says that Hon’ble Finance Minister’s announcement is a good sign that Government of India atlast recognised our plight. While elaborating on the package he further says, “Five lakh free tourist visa scheme is surely a welcoming gesture but if the Government can extend the deadline till 2023 (instead of 2022 as proposed) will be the real game changer for sure. We all are aware that the war against pandemic is still on and there is no clarity by what time ‘Visa Processing’ will begin and the airlines will start regular international operations. It seems that half of the Inbound season will be going in managing the pandemic and dealing with restrictions.” “Similarly Loan Guarantee scheme for Guides and operator will definitely help our small operator. But the of employees of these MOT recognised companies are not covered , they should have been covered,” says ICPB Chairman.

INDUSTRY NEEDS MORE i.e. ONE-TIME FINANCIAL GRANT, 10% SEIS

RELIEF FOCUSED MORE ON DOMESTIC, INBOUND TRAVEL & ONLY THOSE REGISTERED WITH MOT

We are grateful to the Hon’ble Prime Minister and Hon’ble Finance Minister for giving some relief to the tourism industry including 5 lakh free visas applicable till 31st March 2022, whenever visas are open, and we are grateful to the Hon’ble Tourism Minister for supporting the industry,” said Rajiv Mehra, President, Indian Association of Tour Operators (IATO) reacting to the announcements that were made by the Hon’ble Finance Minister giving relief to the affected sector including tour operators and registered tourist guides in tourism sector. “We are hopeful that ‘Tourist Visa’ will open soon and has appealed to the Hon’ble Prime Minister that all visas for duration of 30 days should be free for all those who apply for Visa till 31st March 2023, added Mehra.

“We thanked the Government for considering loan to the tour operators and the guides but requested that Government should also consider giving one-time financial grant to all recognised tour operators which could be 50% of the wages paid by the tour operators in 2019-20 and Rs. 2.5 lakh to each tourist guide recognised by the Ministry of Tourism/State Government as one time grant,” explians Mehra. “We are hopeful that release of SEIS 2019-20 for tour operators earning foreign exchange in services sector, which is pending governments announcement, the percentage may be considered at least 10% of the foreign exchange earnings so that it can give some support to the tour operators for them to survive and revive their business during this stressed situation and our members get some oxygen and do not land up on ventilators,” concludes IATO President.

While commenting on the Stimulus Package TAAI President Jyoti Mayal says, “We welcome the announcement of Hon. Finance Minister Sitharaman’s loan guarantee scheme of 300 crores to the registered agents and tourist guides, not for being a well thought support scheme but for finally acknowledging that the travel and tourism sector exists and is need of support.” “We have been expecting relief, rebates and moratoriums since last 14 months of our struggle with the pandemic. The industry is heading towards bankruptcy and increase in unemployment with no respite of the increasing challenges in sustaining.The relief is focused more on domestic and inbound travel and only those registered with Ministry of Tourism (904). It is pertinent to note that with over 3000 members of TAAI alone, only those registered with Ministry of Tourism shall benefit,” expressed Mayal. Acording to her, being registered with MoT was never a criterion to be in business. TAAI members have applied for MoT recognition and due to the pandemic over 200 have still not been approved. We need easy and relevant requirements. “Most of the members engaged in domestic tourism are registered with State Tourisms, with specific concentration to their regions. The outreach of this relief is minuscule and the Government needs to broaden its horizon by verifying the travel agents from data of registration under MSME and GST.The travel and tourism industryhas been contributing to the exchequer over the years and they should be able to benefit in this crucial time.,” explains Mayal. TAAI President says that the loans that are being offered are not at all feasible for the tourist guides too as it attracts a very high interest. They may have to avail the loan for survival, but it will be very difficult for them to be able to repay with ease at such a high interest rate. She feels that the initiative of granting free visa for first five lakh foreign tourist is surely a move to be appreciated. This will surely encourage and incentivise inbound tourism and we look forward to more free visas and a date to be announced for tourism to open.

FAITH URGES COMPREHENSIVE SUPPORT

FAITH the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India have thanked the Finance Minister for recognising the deep pain and stress of Indian tourism, travel & hospitality industry after almost 5 quarters and for including it structured relief measures announcements.

The fee waiver on 5 lakhs tourist e-visas is a demand stimulus. Since the inbound tourism industry must fully recover from the scratch, from the time that it restarts, they have requested that this fee waiver be extended till at least the pre-pandemic figures of tourist arrivals is reached or till 2024 without any end use restrictions on the travellers. They have said that the fees foregone will be a notional loss of perhaps an additional INR 100 crores is a minor investment in restarting the inbound tourism which contributed to more than INR 2 lakh crores in the pre pandemic year. This will send a strong message of confidence building to the world which is waiting to travel again.

TOO LATE AND TOO LITTLE

EXTEND FREE VISA DEADLINE & LOAN WITHOUT INTEREST

While reacting on the stimulus package announced for the crisis ridden tourism & hospitality sector as a sort of relief by Finance Minister Nirmala Sitharaman, President of Confederation of Tourism Professionals of India (CTPI) Dr. Subhash Goyal said, “This announcement is too late and too little. Already 10 million people have become jobless and thousands of companies have become bankrupt. Tourism is not only the largest employment generator but has a multiplier effect on all other sectors of our economy.” While elaborating on the announcement and its relevance to the travel agents and tour operators including guides Dr Goyal suggested:

Š Without the announcement of the date for issuance of e-tourist visas and the date for starting of scheduled international flights, we cannot revive tourism and free visas will be meaningless. Moreover, all tourists who are spending air fare can easily pay for the visa fee. This will only benefit overland tourists from Myanmar, Bangladesh and Pakistan. The money saved by not giving free tourist visas can be utilized for giving grants to Tourist Guides and Tourism workforce.

Š The giving of loans to Tourist

Guides and Small Tour

Operators is also meaningless because how will they return the loan and pay the interest when there is no business.

If the government really wants to help, then there are only about 11000-12000 govt. recognised guides and govt. can easily give them a onetime grant under the same provision like they are giving to Farmers and Ration to the Below Poverty Line (BPL) people. In the same provisions, grants can be given to Tourist Guides, small & medium Tour Operators, Tourist Bus/Taxi owners & Drivers etc. This would help them to survive till the time our borders are opened and Tourist start coming to India.

Š If the government is serious, they have the balance sheet of all tour operators who have honestly being paying taxes for such a long time, based on the before Covid-19 balance sheet, they can give an interest free loan; repayments of which should start only one year after international borders are opened. Similarly, based on this the govt. can pay at least 50% of the staff/workers’ salaries of these companies.

Š Before talking about loans, government should first pay the SEIS amount which is legally long overdue and then talk about interest free loans.

While expressing his gratitude on behalf of the tourism and hospitality sector of Odisha for the stimulus shot announced (28th June) by Finance Minister, J K Mohanty, Chairman – Hotel & Restaurant Association of Odisha suggested, “Since the pandemic period is still on and we are expecting the third wave of COVID 19, fixing up deadline of March 2022 for free VISAs up to 5 lakh tourists may kindly be extended up to March 2023. Also, granting a loan at this period and charging interest may not be very attractive for the travel trade.”

He further explained that the travel trade expected some shot of grants as relief for revival of the business or interest free loan up to a period of three years to enable the travel trade to revive. A limit of Rs.10.00 lakh for travel agents, tour operators should not be the benchmark.

“The amount may be fixed on income of the companies looking at their balance sheet of last three years. Presently, as tourism is not expected to revive fast it will be difficult for tour operators and travel agents to repay the loan on time,” stressed Mohanty. The crisis ridden industry is battling for its survival since the outbreak of Coronavirus. While recalling the efforts made by HRAO the Chairman informed that the hotel industry had appealed for increasing the moratorium period on the ECLGS=1 & ECLGS-2, but the Finance Minister has not yet commented anything on the same. “Without tourists and movement of corporate travellers during this lockdown period, hotels are mostly closed. It was, therefore, requested to extend four years moratorium for revival of the hotel industry,” he added.

HRAO Chairman feels positive that the Finance Minister will consider extension of the moratorium period for hospitality sector as hotels are capital intensive industry, largest employment generator and foreign exchange earner for the country. “Our appeal to the Hon’ble Finance Minister once again to have a re-look at the tourism sector and also focus on world class tourism infrastructure building of India to enable India to compete with its neighbouring countries of South East Asia such as Japan, Thailand, Philippines, Singapore, Hong Kong, Malaysia, Sri Lanka, Nepal, China etc.” “We are sure with basic tourist infrastructure development, India will be able to compete with its neighbouring countries and make tourism ‘The Driving Force of the Country’s Economy’,” concludes Mohanty.