Indian tourism body appeals for state specific tourism revival packages, tax benefits

Tourism business has almost completely come to a standstill in fiscal year (FY) 2020-21 owing to the pandemic.

According to FAITH, the total loss in footfall amounts to over eight billion domestic tourists, over 10.5 million foreign tourists and over six million NRI tourists.

Not to forget that each foreign tourist has a multiplier effect of 2.8 times across Indian states, said FAITH.

Almost all of India’s top performing foreign source markets for tourism (USA, Canada, UK, Germany, China, Japan, Singapore, Russia, Italy, Spain), are severely affected and are not likely to travel before FY2021-22, according to FAITH.

The federation also said that interstate domestic season, over 60 per cent of which happens in the April - July period has collapsed for in FY2020 - 21 and will be negligent for the rest of year with stringent travel restrictions and reduced connectivity across Indian states.

FAITH emphasised that key government bodies have to understand that the sector needs an immediate survival package followed by a revival programme.

Some of the suggestions forwarded by FAITH to the chief ministers of all states are -- complete waiver of all fixed electricity and other utility charges as well as for all excise duties for FY 2020-21 without any penalties;  renewal of all licenses, permits, permissions which were expiring in FY 2020-21 without any financial charges or penalties; refund of the FY 2019-20 of SGST collected from all travel agents, tourist transporters, hotels, tour operators, restaurants and any other tourism, travel & hospitality enterprises in the state, which will help manage their working capital crisis, and can be paid back in subsequent years interest free and without any penalties; etc.

FAITH has also sought support from the Union Finance Ministry for a complete waiver of income taxes, GST, PF & ESI and any other statutory taxes, fees, cesses or levies on the tourism, travel & hospitality industry for FY 2020-21, and from the Reserve Bnak of India (RBI) for increasing the moratorium period on loans from three months to full financial year of 2020-21 without any penal or accumulated interest. 

The federation has appealed to the Union Finance Minister and the RBI Governor to set up a Tourism COVID-19 Fund -- with a minimum fund size of Rs. 50,000 crores (which is almost equal to the gross banking credit to Indian tourism) -- with 10-year interest free loan for enabling tourism, travel & hospitality industry to meet salary costs.

This crisis emanating from COVID 19 is the worst ever to hit the tourism industry, bigger than the combined financial impact of 9/11 and economic downturn of 2009 and said to be even bigger than the impact of world war 2 and the Great Depression, the federation said.

According to FAITH, the sector needs immediate help so that mass bankruptcies and unemployment in tourism, travel & hospitality industry may be avoided.

FAITH is the national federation of the 10 tourism, travel and hospitality organisations of India, consisting of ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI and TAFI.