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Travel and tourism industry stares at bankruptcies, job losses

OIP Travel and tourism industry stares at bankruptcies, job losses

It is believed that around 70% out of a total estimated workforce of 5.5 crores (direct and indirect) could get unemployed (3.8 crores)

MXLLS4e1537be 635d 48ee a256 c9777f051469 Travel and tourism industry stares at bankruptcies, job losses​​Travel and Tourism industry is hit economically globally and in India due to the outbreak of coronavirus with many prospective domestic and foreign tourists cancelling their travel plans. This global pandemic has prompted the Indian government to impose increasingly tough restrictions on travel resulting in further drop in hotel occupancies since the imposition of the ban.
It is estimated that as a result of this pandemic, Indian Tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment. It is believed that around 70% out of a total estimated workforce of 5.5 crores (direct and indirect) could get unemployed (3.8 crores).  This effect of job losses and layoffs has already begun throughout the country.
A large percentage of total tourism business activity of India, which is estimated at $28 billion+ in forex and upwards of ₹2 lakh crores in domestic tourism activity will be at economic risk through the year. Thus, in excess of ₹5 lakh crores of direct tourism industry and almost double that of total economic activity is at risk. 
In this backdrop, The Federation of Associations in Indian Tourism & Hospitality (FAITH), the umbrella body of the industry has written a letter to Prime Minister Shri Narendra Modi to highlight the devastating economic impact of the coronavirus pandemic on the tourism industry and seek his intervention in terms of financial relief for the industry to grapple with the situation.
Some of the key industry asks that are highlighted in the letter include:
1. Twelve months moratorium on EMIs of principle and interest payments on loans and working capital from Financial Institutions (both banking & non-banking)2. Double working capital limits and on interest-free & collateral-free terms. This will prevent all our tourism businesses from going bankrupt  3. Deferment for twelve months of all statutory dues whether GST, Advance Tax payments, PF, ESIC, customs duties at the Central Government level or at any state government level the  excise fees, levies,  taxes, power & water charges, bank guarantees & security deposits and deferment of all renewals, across the tourism, travel, hospitality & aviation industry 4. Set up a support fund for twelve months on the lines of MNREGA to support basic salaries with ‘direct transfer’ to affected tourism employees5. Deafer introduction of TCS (tax collected at source) on travel that has been proposed in Finance Bill 2020 to be levied from 1st April 2020 as it will displace business from India to overseas, which will lead to shutting down businesses of most Indian tourism companies6. Deferment of increase in any insurance premium for a period of 12 months such as for example for Standard fire and special perils rate for fire, loss or profits 7. A complete GST Tax Holiday for the Tourism, Travel & Hospitality Industry for a period of twelve months. With almost nil revenues there is hardly going to be any GST collection. This will make a very strong statement and will promote both domestic and inbound travel.8. Grant a 200% weighted exemption for twelve months on expenses to Indian corporates to hold exhibitions, conferences and incentive trips in India. This will be a big shot in the arm and will help revitalise the industry.9. Restoration of 10% duty credit of SEIS scrips to promote foreign exchange earnings. Additionally, to kick start the working capital take the previous year’s foreign exchange earnings as a reference point for credit  10. Regular meeting of a national tourism task force of all relevant ministries of the Central  Government along with ministry of tourism and chief secretaries of State governments and industry stakeholders to fast track all tourism investment approvals

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