The Federation of Associations in Indian Tourism & Hospitality (FAITH) has urged the government to set up a ‘Targeted Tourism Transition Corpus’. This fund can directly transfer benefits to the country’s tourism, travel and hospitality industry through the Ministry Of Finance (Mof), till the vaccine is deployed.
The path to vaccination is becoming clearer now with multiple vaccines being considered for approval. Reports across the world indicate that by mid-year 2021, at least one vaccine candidate will be deployed across most international markets, and India too. Post this, tourism is likely to revive as people will feel safer to travel post-vaccination.
Currently barring some spurts of domestic travel during long weekends, almost all segments of tourism are stagnating. These include inbound and outbound tourism, corporate meetings and events travel. All these segments will hopefully get unlocked after the successful vaccination drive.
Globally, several countries have initiated multiple levels of sup-port to sectors impacted adversely by a drop in tourism. This industry has seen almost nine months of complete economic distress, unlike other sectors which witnessed sporadic activity, and is facing the once in a century crisis of confidence.
SEEKING HELP
FAITH, which comprises 10 national tourism, travel and hospitality organisations, has requested that a bridge fund be set up till such time, targeted at the tourism and hospitality sectors. This will enable companies in these segments to draw from the corpus, which can be set up by the MoF, on a direct benefit transfer on an interest free basis. They can utilise these funds to pay employee salaries and manage operating costs.
This fiscal withdrawals by the tourism enterprises can be adjusted over a period of five years against their GST and income tax liabilities. As the recent Q2 GDP data has indicated, the travel hospitality & trade contracted over 15% almost double the GDP contraction of 7.5% for India. On a stand-alone basis, the contraction in tourism will be much higher.
However, this bridge funding to the tourism and hospitality sectors, on an interest free basis, can help correct the situation. Moreover, it can open up a path to recovery led by a stable tourism supply. The corpus will also enable the companies to keep their business and jobs ready when business revives.
FAITH maintained that this will be a win-win for the industry as well as the government; the latter will lose just the time value of money but will benefit from taxbased growth emerging from this revival.
