Government Disburses INR 13,766 crore to the Travel & Hospitality Sector
The tourism industry in India has suffered dreadfully during the pandemic. Just the first three quarters of Financial Year-2020 oversaw the job loss of around 21.5 million workers solely in the tourism sector. This data was derived during a government-funded study by the NCAER.
This is why the government’s decision to grant the travel, tourism, and hospitality sector INR 13,766 crore under the Emergency Credit Line Guarantee Schemes (ECLGS) program is being received as a boon. Not just this, the government, according to G Kishan Reddy (Union tourism, culture, and DoNER minister), has issued more than one lakh loan assistance guarantees via the three stages of ECLGS.
If we look at the detailed breakup of these guarantees offered to the tourism and hospitality sector, we will notice that, according to the Minister, 2732 guarantees were issued for Travel and Tourism companies which amounted to INR 1371 crore. Under the same ECLGS 3.0 phase, the hospitality sector received 3160 guarantees which amounted to INR 5,431 crores.
In the second phase of the ECLGS, 218 guarantee certificates were issued to tourism, hotels, and restaurants. This amounted to INCR 3,404 crores being approved. Out of all the 3 phases, the first phase was responsible for issuing the most number of guarantee certificates. 96,000 certificates were granted all over India which amounted to INR 3,339 crores in terms of loans that were issued.
The Central government has also announced a Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS). Under this scheme, loan assistance up to as much as INR 10 lakh will be given to those who are Travel and Tourism stakeholders approved by the Ministry of Tourism. Additionally, Centre and State government-approved tour guides will be eligible for loan assistance up to INR 1 lakh.
The problem is that despite the financial assistance schemes by the government, the actual reach of these schemes has been limited. People in the travel, tourism, and hospitality sector have consistently complained regarding the indifferent attitude of the financial establishments. According to the people in the industry, these financial institutions have dragged their feet despite the government approvals in providing loans and financial assistance. What remains to be seen is whether the current funds will reach those who have been severely affected by the pandemic.