50% value of the almost 10% of India’s GDP from Tourism at risk from collapse.
Federation of Associations in Indian Tourism & Hospitality (FAITH), the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India has revised upwards it’s value at risk to Indian tourism.
In a meeting with EG -6, yesterday, FAITH informed that they would like to revisit and double their earlier guidance.
The earlier guidance which was calculated and was shared with the Government in March 2020 had put tourism’s economic value at risk at almost ₹ 5 lakh crores + from this pandemic. FAITH believes this value at risk could go as high as ₹ 10 lakh crores given the way tourism supply chains are breaking down in India across all its key inbound, domestic & outbound markets.
The direct and indirect economic impact of Tourism industry in India is approximately estimated at ~ 10% of India’s GDP. This roughly puts the full year economic multiplier value of tourism in India at almost ~ ₹ 20 lakh crores.
Tourism has one of the largest economic multipliers. FAITH based upon its industry estimates believes, that in India given its globally unique natural and cultural heritage which is spread across the Indian hinterlands, each rupee spent on tourism could have an economic multiplier of between 2.5 – 3 times. While this is India’s global competitive advantage in tourism, this can also quickly translate into a competitive disadvantage due to this pandemic, if not supported immediately as tourism jobs are spread right across the cities to remote areas pan India.
Empowered Group -6, an inter-ministerial group of Government of India, headed by the CEO Niti Aayog has carefully listened to the concerns across all the tourism verticals and have assured to take it up with the Government and with the RBI.
FAITH has requested that for revival of any demand in tourism, the tourism supply in India has to first remain intact. For the same, they have requested Niti Aayog for a COVID 19 Tourism fund of minimum ₹ 50,000 crores which can be used by tourism enterprises in India as a 10 year interest free loan for taking care of their employees. This along with a 12 months full waiver of all banking loans & of all central and state statutory liabilities be it PF, ESi, income taxes, GST, fixed power and utilities tariffs, property tax, excise, inter-state tourist transportation taxes and license fees, all without any accumulated or penal interest has to be done immediately.
FAITH communicated to EG 6 that this is the only win-win-win outcome as it will not only keep the Indian tourism industry alive for a revival, it will also keep the jobs intact and it will also protect the exposure of the banking sector to tourism preventing their loans from becoming NPAs.
FAITH has already raised requests over the past seven weeks to the Prime Minister, the Finance Minister, customized requests to each of the 28 chief ministers, to RBI, to the Tourism Parliamentary panel, to Ministry of Commerce, ministry of Civil aviation and is closely in coordination with ministry of tourism.