Disappointment writ large
Pradeep Shetty, Joint Honorary Secretary, Federation of Hotel & Restaurant Associations of India (FHRAI), discusses nitty-gritties of what Union Budget delivered to hospitality sector, including long-standing disappointments that continue. his year’s Union Budget was the third one since COVID-19 hit us, and the disappointment still continues, feels Pradeep Shetty,
Joint Honorary Secretary, Federation of Hotel & Restaurant Associations of India (FHRAI). "There is no takeaway from it except that the ECLGS for the hospitality sector has been extended, and additional funding has been poured into it. So, it was nice of the government to finally identify and recognise this part and distinguish the hospitality industry from everybody else. Besides, there is absolutely nothing else for us. But despite recognising the serious impacts on this industry, there is no real relief measure that has been given,” he says. The announcement of ECLGS was made months ago, but the implementation is lacking on the ground, he adds.
“At this point, financial institutions are not implementing it, and we have been continuously going back to the government and saying that – look, your measures are laudable, you are at least providing some measures by which people can have some more capital, but financial institutions are making it very difficult. Therefore, we have requested a grievance window where these issues between the industry players and financial institutions can be resolved quickly. We had requested a meeting of all the bank chairmen where these issues could be discussed. This industry has been put on the negative list of lending by all institutions because of what it is going through,” he further adds.
Incentivise domestic tourism
All of this had a cumulative effect, and that is how 30–40 per cent of the establishments have shut down. "There were many other things that would have really helped the sector to revive. We wanted the government to incentivise domestic tourism with more funding, especially for the hospitality sector, that last-mile connectivity between tourist attractions and hotels in the vicinity. That, of course, has not happened,” Shetty says. “Soft and easy loans could have made the comeback or reopening easy for the people who have shut down and also for employee support. Basically, all these measures, would have helped revive the industry faster. But with no support and just an ECLGS that means I have a loan and I am going to get more and more loans. Is there a way to repay those loans because international flights are still not happening? So nobody is going to be able to repay all of that," Shetty adds.
The sector is also waiting for the one-time funding for the
industry, through which
` 60,000 crore for the hospitality sector was announced and is to be operationalised. "The announcement came a couple of months ago, but operational details have still not been revealed. Under this fund, loans were provided at a very low interest rate. This kind of fresh funding would have really helped the industry come back. Due to successive waves and open-shutdown scenarios, most of the players are in debt or losses and many of them are not open. There were certain tax reforms, which were very critical in reviving the industry. Fresh loans and longer tenures under the infrastructure status would have really helped the industry. But unfortunately that didn't happen," he said.
This industry has been put on the negative list of lending by all institutions because of what it is going through