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Third covid wave: Hospitality industry sends SOS to finance minister

FHRAI has asked for moratorium for loans taken by the tourism and hospitality sector and a special resolution framework for restructuring of the loans along with moratorium extension of minimum one year for loans availed under ECLGS.Premium
FHRAI has asked for moratorium for loans taken by the tourism and hospitality sector and a special resolution framework for restructuring of the loans along with moratorium extension of minimum one year for loans availed under ECLGS.

  • The first two two waves of the pandemic caused around 30% of hotels and restaurants in the currently to shut down permanently, with the remaining reporting daily losses. The industry has reported losses of a massive 1.40 trillion so far, with around 50 million jobs lost

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NEW DELHI: The Federation of Hotel & Restaurant Associations of India (FHRAI) has sought urgent steps from the Centre to bail out the struggling hospitality and tourism industry amid the third wave of the covid-19.

In a representation to finance minister Nirmala Sitharaman, the Association sought moratorium for loans taken by the tourism and hospitality industry and a special resolution framework for restructuring of loans along with a minimum one-year moratorium extension for loans availed under the Emergency Credit Line Guarantee Scheme (ECLGS).

It has also asked for working capital support with a guarantee from the central government to banks and non-bank financial companies (NBFCs). It also sought 60,000 crore loan guarantee scheme immediately for the industry which is among the worst hit by the pandemic. It has also urged for direct benefit transfer of basic pay to employees of the industry.

“The hospitality industry in the country has been severely impacted ever since the COVID19 pandemic hit the country in early 2020. The first lockdown and the restrictions put the sector at a stand-still for almost eight months. While the industry was hoping for some revival post November 2020, the second wave stormed in by April-May 2021 totally deflating the business and the hope of the industry. We are presently in the midst of the third wave and the industry just will not be able to sustain another storm," said Gurbaxish Singh Kohli, vice president, FHRAI.

“…Our foremost request is for a moratorium of minimum one year for repayment of loans along with interest for the hospitality industry. In addition to this, we request that in view of the unparalleled situation of the tourism and hospitality sector, another round of resolution framework be announced for the sector for restructuring of its loans," Kohli said.

FHRAI said the first two two waves of the pandemic caused around 30% of hotels and restaurants in the currently to shut down permanently, with the remaining reporting daily losses. The industry has reported losses of a massive 1.40 trillion so far, with around 50 million jobs lost.

“….we request that an amount equivalent to the pre pandemic basic salaries of tourism, travel and hospitality employees be sent each month in a direct benefit transfer to the employees against their PAN cards…A direct salary transfer will support the livelihoods of crores of people till the time normalcy is restored in the sector. Since trained and quality manpower has a pre-dominant role in the tourism and hospitality sector, this support is very vital to restart and revive the Indian tourism," Kohli added.

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