The tourism, travel industry and hospitality industry has been wrecked by the effect of the COVID-19 outbreak. Nations like India are still effectively doing battling the destructive virus yet industries and societies are presently also hoping to develop and come out from the emergency.
The Reason Behind This Big Step
At the time of Briefing, the Ministry of Finance show the actual figures through their presentation stated that 1.1 crore foreign tourists (FTAs) visited India in the year 2019 and invested around $30.098 billion in business and leisure.
The foreign tourist’s average daily stay in India is 21 days while the average daily spending is about $34 (~Rs 2,500). Now once visa issuance is resumed, the first 5 lakh tourist visas will be issued to the tourists absolutely free of charge. This scheme will be valid till 31st March, 2022 or till 5 lakh visas are issued. Also, the scheme’s benefit will be applicable only once per tourist. The overall financial implication is expected to be around Rs. 100 crores.
The Reviving Tourism Package and Its Benefits
Also, the Center has announced a “reviving tourism” package in which more than 11,000 registered tourist guides as well as travel stakeholders will get huge financial support. Working capital/personal loans will be given with 100% assurance to individuals in the tourism sector. The package is available in the form of a new loan guarantee scheme in which people in the tourism sector liberate from liabilities and start businesses again impacted because of the global pandemic.
According to the Sitharaman, the scheme will include 10,700 regional level tourist guides acknowledged by the government (both Union tourism ministry and states) as well as 904 travel and travel agents recognised by the Union tourism ministry. Loans will be given with a 100 percent guarantee, up to Rs 10 lakh per agency as well as Rs 1 lakh per tourist guide. No processing charges will be applied along with the waiver of prepayment/foreclosure charges. Also, not extra collateral will be needed.
The travel sector has been one of the terrible victims of the pandemic. The Federation of Associations in Indian Tourism & Hospitality (FAITH), a top body of the Indian tourism industry had this March cautioned that practically 70% of the nation’s estimated workforce of 5.5 crore individuals could get jobless as an effect of the Covid pandemic. It had likewise said that the Indian tourism industry is watching at the closure of businesses, bankruptcies, and mass unemployment.
The Minister likewise announced a New Credit Guarantee plan to facilitate loans to 25 lakh persons through Micro Finance Institutions. The interest rate on loans from banks will be covered at MCLR in addition to 2 percent. The emphasis will be on new lending not reimbursement of old loans.
Likewise, the government proposed to give extra corpus to National Export Insurance Account for more than five years to permit it to guarantee extra Rs 33,000 crore of project exports.
As per India’s Federation of Hotel and Restaurant Associations, practically 50% of all restaurants and hotels in the nation have closed down permanently while airport and airlines operators are struggling to survive.
M P Bezbaruah, secretary-general of Hotel Association of India, is happy with the announcement and said that FM’s declaration on free Visa has a powerful symbolic message that they have the confidence to invite visitors and that the travel industry and hospitality is a robust pillar of a post-Covid economic recovery strategy. They truly trust that such measures will be sensibly followed by measures to allow the industry to recuperate and be prepared to welcome tourists. Measures such as liquidity support and freedom from statutory taxes. HAI would like to praise the FM on this initiative as well as look forward to some more practical initiatives to make livelihoods and jobs through a revived tourism and hospitality industry.
With no inbound tourist business since last year, tour guides, travel agents, and everybody connected to the travel sector had been looking for some sort of help from the government.
The government’s proposal to give free tourist visas to the first 5 lakh tourists when visa issuance starts will be a welcome initial step that will help rejuvenate India’s inbound tourism, which has been on pause since the inception of the pandemic.
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