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'Govt stimulus to initiate tourism sector revival'
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SME Times News Bureau | 29 Jun, 2021
Ratings agency Crisil on Tuesday termed the government's relief package
for the tourism sector as a 'timely' move that will gear up the industry
for recovery with the easing of lockdowns post the second wave of the
Covid-19 pandemic.
The measures announced on Monday include a Rs
60,000 crore loan guarantee scheme for the sectors impacted by the
pandemic, and within that, working capital or personal loans to the
travel and tourism stakeholders.
As per the agency, these steps
are expected to put capital in the hands of the hard-hit tour operators
and other stakeholders to restart business.
The Centre has also announced free one-month tourist visas for the first five lakh tourists once global air travel opens up.
"Guaranteeing
working capital or personal loans of up to Rs 10 lakh for travel and
tourism players and up to Rs 1 lakh for travel guides is expected to
benefit 11,000 stakeholders. This will help them service the existing
obligations, leading to an interest cost savings of 200-300 bps, and
help restart businesses," said Manish Gupta, Senior Director, Crisil
Ratings.
"The move to provide five lakh free one-month tourist
visas till March 31, 2022 amounts to only a Rs 100 crore allocation, but
importantly, it sends out a message that India is getting ready to
welcome tourists. This could provide a boost to budget-conscious
travellers before the inbound season, which typically starts from
October," Gupta added.
Besides, the expansion of the Emergency
Credit Line Guarantee Scheme (ECLGS) by Rs 1.5 lakh crore to Rs 4.5 lakh
crore for sectors impacted by the pandemic is also a positive move, the
ratings agency said.
The highly-fragmented tourism sector
includes stakeholders such as travel agencies, individual travel agents,
car rental agencies and tourist guides whose businesses were
practically wiped out as the pandemic put a stop to travel.
"But
all these measures only set the stage for what the sector critically
needs -- opening up of inbound and outbound travel, which is currently
very restricted. With improved vaccination rates, we expect opening up
in the second half of this fiscal, but that would also be contingent on
the policies of the foreign countries," the ratings agency said.
"Domestic
travel though should start to bounce back as state-level lockdowns
ease. This would be crucial for the industry to claw back to 35-40 per
cent of business this fiscal compared to the pre-pandemic levels," it
added.
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