At a press conference, Finance Minister Nirmala Sitharaman announced a new loan guarantee scheme for the COVID-affected travel and tourism sectors, which are reeling under business loss and imminent closure following the pandemic. Offering several relief measures, including working access to capital, the government hopes industry stakeholders will be able to restart their business and better manage their financial liabilities.
The new Loan Guarantee scheme is likely to cover 10,700 regional level tourist guides recognised by the Ministry of Tourism and state governments. The Centre will provide loans with a 100% guarantee to tourism stakeholders and tourist guides for up to INR 10 lakh, respectively. The government also stated that these loans would be provided without processing charges, or seeking extra collateral, in addition to waiving off prepayment charges.
To give the inbound tourism a shot in the arm, the FM is waiving visa issuance fees for 5 lakh foreign tourists, once international travel resumes. “This scheme will be available till March 31, 2022 or will be closed after distribution of first 5 lakh visas are issued,” Sitharaman stated. “One tourist can avail one benefit only. The total financial implication of this measure will be INR 100 crore.”
The Hotel Association of India (HAI) has welcomed the FM’s announcement on free visas, stating that it has a strong symbolic message that India has have the confidence to welcome visitors and that tourism and hospitality is a strong pillar in the country’s post-COVID economic recovery strategy. MP Bezbaruah, Secretary-General of HAI added, “We sincerely hope that such measures will be logically followed by measures to make the industry recover and welcome tourists. Measures like liquidity support and exemption from statutory taxes.”
The Indian Association of Travel Operators (IATO), too, lauded the FM’s move and noted that more than the nitty gritty, the intent behind the announcement is welcome since it is aimed at extending help and recognising the distress the sector has undergone since March 2020. “The loan to be extended to recognised tour operators and licenced guides under ECLGS is good. However, given the stress, a one-time grant would have proved more beneficial than a loan. This 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 Ministry of Tourism or State Government,” stated Rajiv Mehra, President of IATO. While adding that offering free visas is an excellent policy decision, he noted that this should be extended to all foreign tourists till March 31, 2023 and not limited to 5 lakh tourists only. He hoped that e-Tourist visa would also be started soon.
Aloke Bajpai, CEO and Director of ixigo agreed that the announcement of free tourist visa to first 5 lakh tourists to India will boost the morale of travel and tourism sector and aid in faster recovery of inbound tourism. With vaccination drives gathering pace and resumption of activities, he is optimistic that international flights will resume operations soon. “We expect to see similar moves from other countries to attract foreign tourists once borders open,” he added.
