The Federation of Indian Chambers of Commerce & Industry (FICCI), stated in a latest update today that the effect of the pandemic continues to wreak havoc on lives and livelihood for the second consecutive year. While some sectors are slowly opening up again, for the Travel, Tourism and Hospitality Industry, the struggle continues to make ends meet. The industry had contributed USD 194 billion to the Indian economy in 2019 and created about 40 million jobs i.e. 8% of its total employment. The industry came to a halt due to the pandemic and this has created a ripple effect through the industry resulting in many hotels and businesses closing down and job losses for many of those who depended on this industry for their livelihood.
Health experts have predicted that a third wave of COVID19 is inevitable. The government needs to act now and provide immediate relief measures to resolve the urgent liquidity crisis faced by the industry. FICCI has once again appealed to the government for the moratorium on all working capital, principal, interest payments, loans and overdrafts which ended in August 2020 to be extended by another 1 year i.e. August 2021. The RBI's resolution framework, which was prepared during the first wave of the pandemic, needs to be reviewed. With the continued impact of the second wave, it will take a minimum of 4-5 years for the hotel industry to see a return to some semblance of normalcy in its operations. In this situation, the period of restructuring and the ratios needs to be reviewed. It is imperative that the period of restructuring for this sector be extended till March 2024 - 2025.
FICCI has also requested the government to increase the repayment tenure of the Emergency Credit Line Guarantee Scheme ("ECLGS") to 8 years (4 years moratorium plus 4 years repayment). The tour operators, who are among the worst affected in this sector, are in dire need of the Service Exports from India Scheme (SEIS) scrips for the financial year 2018-2019 which is still due to be paid to them. This will help them to somewhat stay afloat through the crisis. The deferment of GST and advance tax payments at the Central Government level and removal of fees for any upcoming licenses, permits/ renewal and bail out packages to fund and support salaries of the employees will also provide some relief. The government needs announce the relief measures now for the industry to have any hope of surviving the crisis.
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