Modi government’s revamped Cabinet on Wednesday (July 7) saw G Kishan Reddy being sworn-inas Minister of Tourism. Reddy was also assigned the responsibilities of the Ministry of Culture and the Ministry of Development of North Eastern region in the Cabinet reshuffle. The BJP MP from Secunderabad has taken charge at a time when the tourism industry has been devasted post the pandemic outbreak.
The government of India has put on hold issuing e-tourist visas. Tourism and hospitality stakeholders have gone out of business and the slow death of the industry has meant thousands have been rendered unemployed and scores of entrepreneurs have faced bankruptcy.
In spite of the tourism sector being the worst hit in the wake of the coronavirus pandemic, the Union government didn’t offer any direct ‘relief’ to the stakeholders till recently when it announced few measures to give a boost to the sector.
The Indian Finance Minister (Nirmala Sitharaman) while addressing the reporters in New Delhi said once the tourist visa issuance for international travel is restarted, the first five lakh tourists will be issued visas free of charge. The benefit that will be available only once per tourist would be applicable till March 31, 2022. The central government also announced that travel agents and tour guides will be eligible for loans upto Rs 1 million and Rs. 100,000 respectively, without any processing charges or collateral requirement. However, the majority of the industry feels that these measures are too little to revive the battered sector.
Chairman STIC Travel Group & President Confederation of Tourism Professionals of India, Subhash Goyal termed the announcement as “too late and too little”.
“Without the announcement of the date for issuance of e-tourist visas and the date for starting scheduled international flights, we cannot revive tourism and free visas will be meaningless. Moreover, all tourists who are paying for airfares can easily pay for the visa fee. This move will only benefit overland tourists from Myanmar, Bangladesh and Pakistan. The money saved by not giving free tourist visas could have been utilized for giving grants to the tourism workforce.”
A section of the industry is disappointed that loans are being only offered to around 904 travel and tourism stakeholders (TTS) recognized by the Ministry of Tourism.
Jyoti Mayal, President, Travel Agents Association of India (TAAI) said, “We have been recommending our members to register with the Ministry for over the years but the process itself is tedious and requires a lot of documentation. Most of the members engaged in domestic tourism are registered with state tourism departments. The outreach of this relief is minuscule.”
Inbound tourism has suffered long term irreparable losses because of the pandemic and the first major challenge for the new Tourism Minister will be to draw a roadmap that could pave the way for the sector to bounce back.
“We were expecting some green shoots in demand from international markets beginning September this year but now the future prospects look challenging. New source markets have to be identified as the pandemic has changed the entire spectrum of the tourism industry,” said E.M Najeeb, chairman, ATE Group of companies.
Domestic tourism has been the only saviour for India’s tourism and hospitality sectors. However, the other challenge for Reddy will be to ensure that while domestic travel grows, it doesn’t become a tool for the rapid rise of coronavirus cases. The recent crowding at hill stations and tourists flouting Covid-19 norms at tourist spots doesn’t augur well for the industry as state governments will be forced to impose fresh restrictions on tourist entry.
The Minister will need to come-up with a concrete plan in tandem with state governments to ensure that domestic travellers follow the government laid required SOPs and there is a control over the number of tourists allowed at tourist attractions.
Will Reddy be ‘ready’ to consider the following industry suggestions?
The fee waiver on 5 lakhs tourist e-visas can be a demand stimulus. Since the inbound tourism industry must fully recover from scratch, this fee waiver should be extended till at least the pre-pandemic figures of tourist arrivals are reached.
The creation of financial support to be administered through the Ministry is also a welcome step. Over the last several months, there has been almost no cash flows for many industry players and there is no way to pay interest. Since the financial support is already guaranteed by NCGLT (National Company Law Appellate Tribunal), it should be converted to a grant or if not, then it be made interest free.
TCS which was introduced in October last year has made Indian tours and travel intermediaries uncompetitive. In addition to GST, now they are liable to deduct tax at source. This makes bookings from Indian travel intermediaries uncompetitive as against those based outside India. TCS needs to be scrapped at the earliest.
SEIS scrips dues against tourism foreign exchange earned for 2019-20 are still outstanding which is creating significant distress as that money was spent in creating tourism demand for India. These dues must be cleared immediately to provide much needed liquidity to businesses.
Despite no revenues, there are statutory liabilities and compliance liabilities at both state and central Government level and other regulatory bodies which still need to be met.The industry has requested that all states governments and the central government ministries should waive off these fixed levies and compliances till the period of the pandemic.
Reddy had earlier served as the Minister of State for Home Affairs. With his elevation as Union Cabinet Minister, Reddy became the first person from Telangana to hold a Cabinet rank.