Industry body fears coronavirus may render 3.8 cr people jobless in India's tourism, hospitality sectors; seeks funding for 12 months

New Delhi: The coronavirus impact could render 3.8 crore people jobless, which is around 70 percent of the total workforce in the tourism and hospitality sector, according to a grouping.

The Federation of Associations in Indian Tourism & Hospitality (FAITH) also said there should be a support fund for twelve months to support basic salaries with "direct transfer" to the affected tourism employees.

Representational image. Reuters

"As a result of this pandemic, the Indian tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment," FAITH said in a letter to Prime Minister Narendra Modi.

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It is believed that around 70 percent out of a total 5.5 crore workforce could get unemployed, which is around 3.8 crore people. This effect of job losses and layoffs has already begun throughout the country, it added.

The figure is for direct as well as indirect jobs.

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

With declining revenues, almost all tourism businesses are running out of working capital. However, with the responsibility of staff and payment of their salaries, EMIs to service, advance tax, PF, ESIC, GST, excise and other state levies, bank guarantees, security deposits, this industry needs your support now more than ever, it added.

"We request you for a twelve-month moratorium on our EMIs of principal and interest payments on loans and working capital from Financial Institutions (both banking & non-banking)," the letter said.

Additionally, FAITH requested the prime minister for doubling working capital limits on interest-free and collateral-free terms. This will prevent all tourism businesses from going bankrupt, it added.

"Sir, additionally to prevent insolvency, we request you for a deferment for 12 months of all statutory dues whether GST, Advance Tax payments, PF, ESIC, customs duties at the central government level or at any state government level the excise fees, levies, taxes, power & water charges, bank guarantees & security deposits and deferment of all renewals, across the tourism, travel, hospitality & aviation industry," the letter said.

FAITH also requested the prime minister 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, it added.

"TCS (tax collected at source) on travel has been proposed in Finance Bill 2020 to be levied from April 1, 2020, and we request that it should not be introduced as it will displace business from India to overseas, which will lead to shutting down businesses of most Indian tourism companies," the letter said.

It also requested a complete GST Tax Holiday for the tourism, travel and hospitality industry for a period of 12 months.

The letter requested the prime minister to, "set up...a national tourism task force of all relevant ministries of the central government along with the ministry of tourism and chief secretaries of State governments and industry stakeholders to meet regularly to fast-track all tourism investment approvals."