Home Tradeline Tourism industry stares at 3.8 crore-job losses due to Covid-19 impact

Tourism industry stares at 3.8 crore-job losses due to Covid-19 impact

A large percentage of total tourism business activity of India, which is estimated at $28 billion-plus in forex and upwards of Rs 2 lakh crore in domestic tourism activity will be at economic risk through the year.

Travel and tourism industry has been hit economically globally and in India due to outbreak of Coronavirus with many prospective domestic and foreign tourists cancelling their travel plans.

Travel and tourism industry has been hit economically globally and in India due to outbreak of Coronavirus with many prospective domestic and foreign tourists cancelling their travel plans.

Indian tourism and hospitality industry is staring at a potential job loss of around 3.8 crore, which is around 70 per cent of the total workforce, due to the Covid-19 impact.

Foreseeing bankruptcies, closure of businesses and mass unemployment, the Federation of Associations in Indian Tourism & Hospitality (FAITH), the umbrella body of the industry, has written a letter to Prime Minister Narendra Modi to highlight the devastating economic impact of the coronavirus pandemic on the tourism industry, seeking his intervention in terms of financial relief for the industry to tide over the crisis.

According to FAITH, around 70 per cent out of a total estimated workforce of 5.5 crore (direct and indirect) could get unemployed (around 3.8 crore). This effect of job losses and layoffs has already begun throughout the country.

Travel and tourism industry has been hit economically globally and in India due to outbreak of Coronavirus with many prospective domestic and foreign tourists cancelling their travel plans. This global pandemic has prompted the Indian government to impose increasingly tough restrictions on travel resulting in further drop in hotel occupancies since the imposition of the ban.

A large percentage of total tourism business activity of India, which is estimated at $28 billion-plus in forex and upwards of Rs 2 lakh crore in domestic tourism activity will be at economic risk through the year. Thus, in excess of Rs 5 lakh crore of direct tourism industry and almost double that of total economic activity is at risk, it said.

Among a slew of demands, FAITH has urged that there should be a twelve-month moratorium on EMIs of principle and interest payments on loans and working capital from financial Institutions (both banking & non-banking), double working capital limits and on interest free and collateral free terms, which will prevent all the tourism businesses from going bankrupt.

Besides, it has sought the deferment of twelve months for all statutory dues, whether GST, advance tax payments, PF, ESIC, customs duties at the central government level or at any state government level , excise fees, levies, taxes, power and water charges, bank guarantees and security deposits and deferment of all renewals, across the tourism, travel, hospitality and aviation industry.

FAITH also urged the government to set up a support fund for twelve months on the lines of MNREGA to support basic salaries with direct transfer to affected tourism employees.

The apex body has demanded the Centre to defer introduction of TCS (tax collected at source) on travel that has been proposed in Finance Bill 2020 to be levied from April 1, 2020 as it will displace business from India to overseas, which will lead to shutting down businesses of most Indian tourism companies.

Other demands include deferment of increase in any insurance premium for a period of 12 months such s for standard fire and special perils rate for fire, loss or profits, a complete GST holiday for the tourism, travel and hospitality industry for a period of twelve months.

With almost nil revenues there is hardly going to be any GST collection. This will make a very strong statement and will promote both domestic and inbound travel, it said.

FAITH said the government should grant a 200 per cent weighted exemption for twelve months on expenses to Indian corporates to hold exhibitions, conferences and incentive trips in India. This will be a big shot in the arm and will help revitalise the industry.

Source: Financial Express