Home / Companies / News /  Tourism industry seeks grants as FM announces loan guarantee scheme for sector

The tourism industry has sought financial grant as the union government on Monday announced financial support in THE form of loans to over 11, 000 registered tourist guides/travel stakeholders that have suffered losses owing to covid-19 pandemic. Finance Minister Nirmala Sitharaman announced that under the new Loan Guarantee Scheme for covid affected sectors, working capital/personal loans will be provided to tourist guides and travel and tourism stakeholders (TTS) in the tourism sector.

The scheme, to be administered by ministry of tourism, will cover 10, 700 regional level tourist guides recognised by ministry of tourism and tourist guides recognised by state governments. Around 904 travel and tourism stakeholders (TTK) recognised by ministry of tourism will also benefit from this scheme.

TTS (per agency) will be eligible to procure loans upto 10 lakh while tourist guides will be eligible for 1 lakh worth of capital which will come with 100% guarantee.There will be no processing charges and addition of collateral required. Government has also provided waiver of prepayment charges levied on the loans.

While the industry associations welcomed the intent behind the support, they highlighted the urgent need for grants to support employees and manage the losses incurred due to pandemic.

“The quantum of support to tourism service providers should be increased and made proportionate to their business sizes and since they are being administered through tourism ministry and being guaranteed by NCGTC they should be reclassified as pandemic relief grants and not as loans to enable working capital support for salaries and operations," said Aashish Gupta, consulting CEO, The Federation of Associations in Indian Tourism & Hospitality (FAITH).

There is an immediate need for waiver of statutory obligations across centre and state fixed commitments for tourism, travel & hospitality, FAITH stated.

Indian Association of Tour Operators (IATO), which represents more than 1,600 operators for inbound tourists, urged the government to 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 Rs. 2.5 lakh to each tourist guide recognised by the ministry of tourism/state government.

“We are on oxygen support right now and the grant would prevent us from being put on ventilator," said Rajiv Mehra, president IATO,

MP Bezbaruah, secretary-general, Hotel Association of India (HAI) said “We sincerely hope that such measures will be logically followed by measures to make the industry recover and be ready to welcome tourists. Measures like liquidity support and exemption from statutory taxes."

The industry univocally welcomed the government’s decision to provide free visas to the first five lakh foreign visitors once the visa issuance process starts. Some suggested that this scheme should be extended all through till 2023/ 24 or till at least all pre-pandemic tourist business is restored.

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