FAITH has urged the government to set up a targeted tourism transition corpus which makes available funds on a direct benefit transfer through Min. of Finance for Indian tourism, travel & hospitality industry, till the vaccine is deployed.
The path to vaccination is becoming clearer now reportedly with multiple vaccines being considered for approval. Reports across the world indicate that by mid-year of 2021 vaccine will be hopefully 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 currently non-performing: inbound tourism, corporate travel, meetings & events travel, outbound travel. All these segments will get unlocked post the deployment of the vaccine.
Faith has thus requested till then a bridge fund targeted at the tourism sector be setup 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 utilize to repay their salaries and operating costs till vaccine is fully deployed.
This drawdown by the tourism enterprises may be adjustable over 5 years against their GST & 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, 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 tourism supply.
The drawdown from this corpus will set in motion a virtuous cycle enabling tourism travel & 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 the second phase of their support to sectors impacted adversely by tourism.
The tourism sector has now seen almost three full quarters of complete distress unlike other sectors and is facing the once in a century crisis of confidence.