FAITH urges Govt to set up a targeted tourism transition corpus till COVID-19 vaccine is ready
The tourism sector has now seen almost three full quarters of compete distress unlike other sectors and is facing the once in a century crisis of confidence. The requested targeted tourism transition corpus will make funds available on a direct benefit transfer through Ministry Of Finance (MoF) 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.
Federation of Associations in Indian Tourism & Hospitality (FAITH), the National Federation of 10 National Tourism, Travel and Hospitality organisations of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI & TAFI), has urged the Government to set up a Targeted Tourism transition corpus which makes available funds on a direct benefit transfer through Ministry Of Finance (MoF) for Indian tourism, travel & hospitality industry, till the vaccine is deployed.
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 for a bridge fund, targeted at the tourism sector, to be setup till then. This will enable tourism, travel and hospitality companies to draw down from the corpus set up by MoF on a direct benefit transfer on an interest free basis, 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 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.
Globally, countries have already started on their second phase of their support to sectors impacted adversely by tourism. Thus, FAITH believes that 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.
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