Published on : Friday, December 4, 2020
Tourism and hospitality body, FAITH, has urged the Government to set up a Targeted Tourism transition corpus which makes funds available on a direct benefit transfer through Ministry of Finance for Indian tourism, travel and hospitality industry, till the vaccine is launched.
Reports across the world indicate that by mid-year of 2021 vaccine will hopefully be deployed across most of the international markets and across India too. Tourism will then only see recovery as people will feel safe to travel post-vaccination.
Currently barring some spurts of domestic travel during long weekends, almost all segments of tourism are non-performing: inbound tourism, corporate travel, meetings and events travel, outbound travel. All these segments will get unlocked post the deployment of the vaccine.
Thus, Faith has requested till then a bridge fund targeted at the tourism sector be set up to enable tourism travel and hospitality companies to draw down from this corpus set up by MOF on a direct benefit transfer basis on an interest-free which they can utilise to repay their salaries and operating costs till vaccine is fully deployed.
This drawdown by the tourism enterprises may be adjustable over five years against their GST and income tax liabilities.
As the recent Q2 GDP data has indicated, the travel hospitality and trade contracted over 15 per cent almost double the GDP contraction of 7.5 per cent for India. On a stand-alone basis, if seen, the contraction in tourism will be much higher.
However, this bridge funding to tourism on an interest-free basis will help in correcting that and will open up a path to recovery led through a stable tourist supply.
The drawdown from this corpus will set in motion a virtuous cycle enabling tourism travel and hospitality companies to keep their business and jobs alive and to be ready for the tourism demand as it begins reviving across international, leisure and corporate markets. The Government will lose just the time value of money but will benefit from tax-based growth emerging from this revival.
Globally countries have already started on their second phase of support to sectors impacted adversely by tourism.