Tourism, travel and hospitality industry alert! Direct benefit transfer of basic pay for employees - Finance Ministry gets these suggestions

FAITH, the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India, has made suggestions to the Finance Ministry, the RBI and the Tourism Ministry for urgently taking up measures targeted at tourism jobs and businesses protection.

It has been repeatedly reaffirmed through all government data whether that of GST, the RBI or of income tax that tourism, travel and hospitality continues to be the worst-hit sector during the 13 months period since the pandemic struck and is also likely stay that way for much of the foreseeable period.

To address that on an immediate basis, the three measures proposed are waiver or compensation for fixed statutory liabilities, direct benefit transfer of basic pay, and credit of SEIS dues for 2019-20.

There has been literally no tourism business due to full or partial shutdown of all other segments of tourism - inbound, outbound, corporate and also group tourism business and now domestic travel. Without any business, it is practically impossible for tourism, travel & hospitality entities to generate cash flows. This situation is dramatically inverse to that of pre-pandemic which saw over 17.8mn international tourist arrivals, over 26.9 mn outbound and almost 2.3 billion domestic tourism visits in 2019-20.

Despite no revenues, there are statutory liabilities and compliance liabilities at both state and Central level and other regulatory bodies which still need to be met.

These include various forms of duties, taxes, cess or license fees including electricity and water, property taxes, excise duties, transport taxes, parking cess, insurance premiums, provident fund, ESI contribution on hotels, travel agents, tour operators, restaurants tourist transporters or any other form of tourism travel & hospitality services.

With no revenues and businesses continuing under shutdown for measures beyond their control, it is principally unfair for these businesses to continue paying fixed costs of statutory liabilities & compliances for them, FAITH said, requesting the government to urgently urge all state governments and the respective Central government ministries to waive off these fixed levies & compliances till the period of the pandemic.

Till the time that is fully achieved, they have suggested the government to set up a corpus with the Tourism Ministry to meet these monthly liabilities of tourism travel and hospitality companies to discharge them on their behalf.

With no revenues & cash inflows to discharge out cash flows emerging from statutory and compliance liabilities, this gesture will prevent Indian tourism, travel & hospitality businesses from declaring bankruptcies and will protect their vital jobs.

Pre-pandemic, it was roughly estimated that between 10 per cent to 12 per cent of India's direct and indirect employment came from tourism, travel & hospitality services. This included both skilled and unskilled jobs across the length and breadth of our country.

With no tourism business, a lot of these employees are temporarily out of jobs or on minimum wages. Their service skills have been cultivated with a lot of diligence and passion over years which makes Incredible India a reality that it is, it said.

FAITH has requested that an amount equivalent to their pre-pandemic basic salaries be sent each month to such tourism, travel & hospitality employees in a direct benefit transfer against their PAN Card. This will help support livelihoods of crores of people and their families till the duration of the pandemic, it said, adding that it will also enable them to be job and service ready for when it is time to restart Indian tourism.