TravTalk India Online Magazine
The Federation of Hotel & Restaurant Associations of India (FHRAI) has recommended a well-made sector-specific stimulus package that addresses the most critical aspects of reducing financial loss, mobilising loans and retention of employment. This includes complete waiver of interest on loans beginning March 2020.
Senior delegates of the Federation of Hotel & Restaurant Associations of India (FHRAI) recently met the Tourism Minister Prahlad Singh Patel and Minister of MSME Nitin Gadkari to discuss the deteriorating state of the industry and to recommend immediate fiscal measures to save it from imminent collapse. The association submitted representations suggesting key policy changes for the revival of the sector. The FHRAI was represented by Vice President Gurbaxish Singh Kohli, Joint Secretary Pradeep Shetty, Treasurer DVS Somaraju and Narendra Somany, President, HRA Gujarat.
The representatives also met and submitted the representation to Arvind Singh, Secretary, Ministry of Tourism and Rakesh Kumar Verma, Jt. Secretary, Ministry of Tourism. FHRAI recently also held a virtual meeting with the Principal Economic Advisor, Ministry of Finance, Sanjeev Sanyal with recommendations specific to the sector.
The tourism ministry acknowledged the industry’s concerns and assured that necessary help will be extended to support the hospitality industry. It has also reassured that sector’s issues and recommendations offered by the FHRAI delegates will be raised with the Prime Minister and the Finance Ministry. The tourism ministry is closely following up with the Ministry of Finance on the SEIS scheme and other concerns will be addressed on a one on one basis with the respective Ministries.
Kohli says, “In our meeting with the ministers, we recommended a well-made sector specific stimulus package that addresses the most critical aspects of reducing financial loss, mobilizing loans and retention of employment. The recommendations include complete waiver of interest on loans beginning March 2020 till business normalcy resumes, announcement of special measures for the industry and the interest burden of loans borne by the government for a fixed period, monthly basic salaries paid directly to tourism, travel and hospitality employees who have lost their jobs due to the pandemic, provision of a moratorium of three years on the principal loan amount, working capital support at interest on fixed deposit rate plus 2% or MCLR rate, urgent release of SEIS pending payments, removal of secondary condition in EPCG and introduction of a long term financing scheme for at least 10 years backed with a guarantee from Central Government to Banks and NBFCs.”
Shetty says, “Since April 2021 the revenue hasn’t even crossed 8-10%. Our right to conduct business was taken away but the right to recover loans and charge interest by our lenders is being allowed. The industry is under tremendous cash flow pressure including payment of salaries, repayment obligations to banks and financial institutions, and funding its capital expenditure plans. We request timely payment of cash flows under the SEIS scheme and refund of income tax due to the sector. This will make a big difference to the ability of hotels to pay the workforce, meet the operational expenses and manage repayments.”
