FM’s announcement enough to assuage pain of travel & tourism sector?
The government after a long wait finally acknowledged the damage the ongoing pandemic has unleashed on the travel and tourism industry by announcing a credit scheme. However, the loan guarantee scheme and visa fee waiver failed to cheer up many stakeholders as they feel a large number of players will continue to suffer despite the measure announced by the government. In fact, the TAAI (Travel Agents Association of India) which is the largest and oldest association of the tourism industry in a statement said that less than 10% of the actual stakeholders shall benefit from the FMs package. Is it too little too late?
Reactions from industry experts are a mixed bag on the announcements by the Finance Minister Nirmala Sitharaman as some view it as a progressive step while majority others believe benefits are limited and direct on ground support is necessary to pull out the players from the pandemic-induced distress.
The Finance Minister has announced working loans covering 10,700 regional-level tourist guides recognised by Ministry of Tourism and State Tourism Boards, and about 1,000 recognised travel and tourism stakeholders (TTS). TTS’s will be eligible to get a loan up to INR 10 lakh each while tourist guides can avail loan up to INR 1 lakh each.
Alongside, she announced that 5 lakh tourist visas will be issued visa free of charge once issuance resumes. The facility will be applicable till March 31, 2022 or till 5 lakh visas are issued, whichever is earlier. The total financial implications of the scheme to the government will be INR 100 crore.
According to Subhash Goyal, President, Confederation of Tourism Professionals of India, the giving of loans to tourist guides and small tour operators is meaningless. “How will they repay when there is no business?,” asked Goyal. Instead of this, the government could have offer grants to the tourist guides, small and medium tour operators, tourist bus/taxi owners & drivers, etc.” This would help them survive till the borders are opened and tourists start coming to India,” Goyal pointed out.
He added that the visa waiver will only benefit overland tourists from Myanmar, Bangladesh and Pakistan. “The money could have been saved by not giving free tourist visas, hence, could be utilised for giving grants to tourist guides and tourism workforce,” Goyal suggested.
Reacting to the measure taken by the government, Jay Bhatia, Vice President, TAAI, said that the impact of this relief shall not be overall. Less than 10% of the actual stakeholders only shall benefit as per the FMs package. To widen the scope of this relief, the FM must include those registered under MSME. We urge the government, that all TTS registered under GST and who have already been contributing to the exchequer over the years, should be recipients of this relief package, Bhatia added. However, he appreciates the government for finally having recognised the tourism trade activities.
Rajiv Mehra, President, Indian Association of Tour Operators (IATO), thanked the government for considering loan to the tour operators and the guides but requested that the 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 INR 2.5 lakh to each tourist guide recognised by the MoT as one time grant. He is hopeful e-Tourist Visa will open soon and has appealed to the Prime Minister that all visas for duration of 30 days should be free for all those who apply for visa till March 31, 2023.
Welcoming the announcement, Madhavan Menon, Managing Director, Thomas Cook India Group, said that this is a much needed step towards the revival of tourism – a sector that is a significant contributor to the GDP, foreign exchange receipts and employment generation – with a cascading force multiplier effect on allied sectors. “The stimulus announcements are a reflection of the government’s focus on the travel and tourism sector and augurs well for the industry, while simultaneously building consumer confidence in travel.”
Agreeing with Menon, Rikant Pitti, Co-Founder, EaseMyTrip.com, said, “We are glad that the impact on the travel and tourism industry has been recognised and we welcome the relief measures introduced by the government. Tourist guides and other travel stakeholders are the backbone of the industry and we believe that the special outlay of funds will enable them to rise from the challenges that they have faced over the past year and a half. With the increased pace of vaccination in the country, we also believe that the proposal to provide free tourist visas to the first 5 lakh tourists is well timed and is a strong step in boosting the country’s inbound tourism as well as the economic activities and sectors that are dependent on it.”