India’s tourism players seek financial relief from government

The Federation of Associations in Indian Tourism & Hospitality (FAITH), a conglomeration of ten national hotel and tourism bodies, has sought the assistance of India’s prime minister Narendra Modi to weather the financial fallout from the Covid-19 pandemic.

Highlighting how the tourism sector are in the throes of a deep-seated downturn amid the virus outbreak, the umbrella body urged Modi in a letter to offer relief measures to the sector, including a deferment for 12 months of all statuary dues, be it GST, advance tax payments, customs duties at the central or state government level.

Travel Oyster India’s Ajay Jaipuria urges government for a financial package to support the tourism industry

The association also requested a support fund for 12 months to help cover basic salaries, with “direct transfers” to affected tourism employees.

“We request for a 12-month moratorium on our EMIs (Equated Monthly Instalments) of principal and interest payments on loans and working capital from financial institutions (both banking and non-banking). Additionally, we request the doubling of our working capital limits and on interest-free and collateral-free terms. This will prevent all our tourism businesses from going bankrupt,” the letter read.

A video conference was held at the Prime Minister Office on March 23 to take stock of the impact of the pandemic on businesses and address economic challenges that have emerged.

“We expect that some measures that will offer relief to the tourism industry will be announced soon. The first impact of coronavirus has been on our industry. Challenges at present are huge and we are fearing that the retrenchment of staff by some travel agencies is inevitable. Agencies in a situation of no cash flow are not in a position to pay salaries,” said Jyoti Mayal, president, Travel Agents Association of India.

She added that senior staff at some travel agencies have taken salary cuts to help with cash flow, while many are worried that airlines may not offer refunds on air tickets booked on behalf of their clients

The Indian government, which has already banned international flights for a week from Sunday, has also indefinitely suspended domestic commercial flights from March 25.

“We have been one of the largest job creators, however today, we are in a situation which will saw significant job losses. We hope that the industry will be supported by a financial package. We also wish that tax collection at source, which is slated to be implemented on April 1 on overseas travel packages, will be rolled back,” said Ajay Jaipuria, founder, Travel Oyster India, who is also a board member of the national tourism committee of the Confederation of Indian Industry.

Sarbendra Sarkar, founder and managing director, Cygnett Hotels and Resorts, added: “While we are grateful to the government for proactively taking effective measures to contain the virus from spreading rapidly, we are hoping that they will introduce new policies to revive the hospitality industry. What would really help us is a cut in the current GST rates and a tax-free period.”

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