India might lose ₹10 lakh cr. as tourism to stay shut

Federation says very short-haul domestic travel may take off after six months

Taking a hit: A view of the deserted Mumbai airport. The tourism industry across the world has been the affected because of the pandemic.

India’s tourism sector is likely to take a ₹10 lakh crore hit, denting 10% of the country’s gross domestic product (GDP), the country’s apex tourism federation has said. Lockdown or not, the sector expects a shutdown of at least six months before a possible soft opening of short-distance domestic travel.

At a meeting of the Empowered Group-6 (EG 6), an inter-ministerial group of government of India, headed by the CEO of NITI Aayog, Federation of Associations in Indian Tourism and Hospitality (FAITH) said the earlier guidance calculated and shared with the government in March 2020 had put tourism’s economic value at risk at over ₹5 lakh crore from the COVID-19 pandemic.

“FAITH now believes this value at risk could go as high as ₹10 lakh crore given the way tourism supply chains are breaking down in India across all its key inbound, domestic and outbound markets,” the federation said.

The direct and indirect economic impact of the tourism industry in India is estimated at 10% of the GDP. This roughly put the full year economic multiplier value of tourism in India at almost ₹20 lakh crore, FAITH said.

FAITH, the national federation of the 10 national tourism, travel and hospitality organisations of India, said in a statement that China’s recent experiment of opening up after a minimum of six months’ lockdown saw some soft opening of tourism, and that too, with very limited, short-haul domestic travel.

“We believe that if one goes by that example, a minimum of six months of direct and indirect output of tourism will be impacted, which will put almost ₹10 lakh crore economic value at risk in India,” FAITH said in its statement.

This value, according to FAITH, covers the whole tourism value chain spanning airlines, travel agents, hotels, tour operators, tourism destinations, restaurants, transporters and guides, among others.

In the meeting with the empowered group, FAITH requested that for revival of any demand in tourism, the tourism supply in India has to first remain intact.

“For this, we have requested NITI Aayog for a COVID-19 tourism fund of a minimum of ₹50,000 crore, which can be used by tourism enterprises in India as a 10-year interest free loan for taking care of their employees,” FAITH said.

FAITH has also requested an immediate 12-month waiver of all banking loans and Central and State statutory liabilities, whether it is income tax, GST, fixed power and utilities tariffs, property tax, excise, inter-State tourist transportation taxes and licence fees, “all without any accumulated or penal interest.”

FAITH said it had communicated to EG 6 that this is the only win-win outcome as it will not only keep the Indian tourism industry alive for a revival, but it will also keep jobs intact and protect the exposure of the banking sector to tourism, preventing their loans from becoming non-performing assets.