The central government on Monday came up with a big announcement for the travel sector. During a press conference, India announced to its plans to issue free tourist visas to 5 lakh tourists. The announcement included a slew of economic relief measures to the tourism industry, which has been badly hit by the second wave of COVID-19 in India.
Finance Minister Nirmala Sitharaman addressed a press conference to announce the steps taken to ensure the survival of the pandemic-ravaged tourism sector as part of an economic package stating that the first 5 lakh tourist visas issued once India allows entry to this category of visitors will be issued free of charge.
Sitharaman also stated that the government-recognised travel agents and tour guides will now be eligible for loans of up to Rs 10 lakh and Rs 1 lakh, respectively, without any processing charges or additional collateral requirement.
During the briefing, the Ministry of Finance's presentation stated that 1.1 crore foreign tourists (FTAs) visited Indian in 2019, and spent $30.098 billion on leisure and business.
The average daily stay for a foreign tourist in India is 21 days while the average daily spending is around $34 (Rs 2,500). "Once visa issuance is restarted, the first 5 lakh tourist visas will be issued free of charge," the brief read.
The scheme will be applicable till March 31, 2022, or till 5 lakh visas are issued, whichever is earlier, and the benefit will be available only once per tourist. The total financial implication is expected to be Rs 100 crore.
The Centre has also announced a &ldquoreviving tourism&rdquo package where over 11,000 registered tourist guides and travel stakeholders will receive financial support. Working capital/personal loans will be provided with a 100 percent guarantee to people in the tourism sector. The package comes in the form of a new loan guarantee scheme where people in the tourism sector discharge liabilities and restart businesses impacted due to the global pandemic.
&ldquoThe scheme will cover 10,700 regional level tourist guides recognised by the government (both Union tourism ministry and states) and 904 travel and tourism stakeholders (travel agents) recognised by the Union tourism ministry. Loans will be provided with a 100 percent guarantee, up to Rs 10 lakh per agency and Rs 1 lakh per tourist guide. There will be no processing charges along with a waiver of foreclosure/prepayment charges. No additional collateral will be required,&rdquo Sitharaman shared.
The travel sector has been among the worst victims of the pandemic. The Federation of Associations in Indian Tourism & Hospitality (FAITH), an apex body of the Indian tourism industry had this March warned that almost 70% of the country&rsquos estimated workforce of 5.5 crore people could get unemployed as an impact of the coronavirus pandemic. It had also said that the Indian tourism industry is staring at bankruptcies, closure of businesses, and mass unemployment.
The Minister also declared a New Credit Guarantee scheme to facilitate loans to 25 lakh persons through Micro Finance Institutions. The interest rate on loans from banks will be capped at MCLR plus 2 percent. The focus will be on new lending not repayment of old loans.
The government also proposed to provide additional corpus to National Export Insurance Account over five years to allow it to underwrite additional Rs 33,000 crore of project exports.
According to India&rsquos Federation of Hotel & Restaurant Associations, almost half of all hotels and restaurants in the country have shut down permanently while airlines and airport operators are struggling to survive.
With no inbound tourist business since last year, travel agents, tour guides, and everyone connected to the travel sector had been seeking some kind of relief from the government.
&ldquoThe government&rsquos proposal to provide free tourist visas to the first 5 lakh tourists, once visa issuance resumes, is a welcome first step that will help revive India&rsquos inbound tourism, which has been on a halt since the onset of the pandemic,&rdquo said Mandeep S Lamba, president of HVS ANAROCK.
