Hospitality sector sore as centre stalling Rs 60K crore package

The association urges government to immediately notify the Rs 60,000 crore scheme with 100 per cent government guarantee and long-term repayment options.

   
Creatives_Indian Hospitality Industry ÔÇô Possibilities, Threats, and Revival in COVID-19 Era_Indian Hospitality Industry - Possibilities, Threats and Revival in COVID-19 Era

The country’s apex hospitality body, the Federation of Hotel & Restaurant Associations of India (FHRAI) has expressed disappointment that a Rs 60,000 crore package announced in June by Union Finance Minister Nirmala Sitharaman has yet to be notified by the Centre. In a representation to Sitharaman, the FHRAI has sought her intervention to set in motion the Rs 60,000 crore sanctioned under the ‘Loan Guarantee Scheme’ for COVID-hit sectors, as announced by her on June 28, said FHRAI Vice President Gurbaxish Singh Kohli.

“Over a month has passed but it is not notified, neither the operational guidelines nor other details have been revealed by the Finance Ministry. However, a similar scheme for the health sector has already been notified and necessary guidelines have been announced,” he said.

Kohli said the hospitality sector is among the worst-hit by the COVID-19 pandemic and lockdowns, and the severest restrictions and protocols have led to massive losses piling up in the past 16 months.

The second wave has virtually destroyed the entire hospitality eco-system which would take years to recover and hence it was imperative for Sitharaman to immediately notify the Rs 60,000 crore scheme with 100 per cent government guarantee and long-term repayment options. “It can address the colossal damage suffered by the tourism and hospitality sector. But the government’s negligence really compels us to doubt the seriousness in its approach towards the industry’s hardships,” Kohli rued.

Additionally, the industry is concerned about members complaining from different parts of the country how banks and financial institutions are not processing applications for loans under the ECLGS3.0 and for loan restructuring.

“The banks and NBFCs are taking advantage of the ceiling limits of the RBI and are not ready to extend any concessions to the deeply distressed MSMEs. They are unmindful of the fact that loans under ECLGS are fully guaranteed by the Centre and the banks/NBFCs lose nothing if they provide loans at concessional interest rates to the customers,” Kohli said.