Credit and Finance for MSMEs: The overall economic relief package of Rs 6.29 lakh crore announced in June this year also included Rs 1.1 lakh crore Loan Guarantee Scheme for Covid affected sectors. Under the scheme, Rs 50,000 crore was aimed at the health sector and Rs 60,000 crore for other sectors including tourism.
Credit and Finance for MSMEs: Hotel and restaurant body Federation of Hotel & Restaurant Associations of India (FHRAI), comprising MSMEs and other businesses, has again submitted a representation to the Finance Minister Nirmala Sitharaman seeking her intervention in notifying the Rs 60,000-crore Loan Guarantee Scheme for Covid affected
sectors announced in June this year. The association had earlier as well requested Nirmala Sitharaman to take cognizance of notifying the scheme. The economic relief package of Rs 6.29 lakh crore announced in June this year for recovery post the second wave of Covid also included Rs 1.1 lakh crore Loan Guarantee Scheme for Covid affected sectors.
Under the scheme, Rs 50,000 crore was aimed at the health sector and Rs 60,000 crore for other sectors including tourism, the government statement had noted. “Close to five months since the announcement, the hospitality industry continues to wait for the government to notify it while the same scheme has been notified for both the health and tourism sectors,” FHRAI said. The federation urged the finance minister to take urgent measures to notify the
scheme with the 100 per cent government guarantee and long-term repayment options. RELATED NEWS
“The ministry has neither released any operational guidelines nor any other details of the scheme so far. The Loan Guarantee Scheme introduced simultaneously for the health
sector was notified immediately and necessary guidelines were introduced by NCGTC. More recently, the Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS) was notified for the travel industry as well. It is as if the hospitality sector is being deliberately neglected. This is the third occasion that we are reminding the finance minister for taking urgent measures to notify the scheme,” said Gurbaxish Singh Kohli, Vice President, FHRAI.
A study by the National Council of Applied Economic Research (NCAER) in January 2021 on economic losses for households engaged in tourism and policies for recovery had noted that 14.5 million tourism jobs were expected to be lost during the first quarter of 2020 following by 5.2 million jobs lost during Q2, and 1.8 million jobs lost during Q3. The data was shared by the Minister of Tourism G Kishan Reddy in the Lok Sabha in July this year. Moreover, the MSME-dominated tourism sector had also witnessed a decline in its share in the Indian GDP by 120 basis points to 4.7 per cent in 2020, from 6.9 per cent in 2019,
thanks to the Covid impact, SBI Research had said in a report in June this year citing data
from the World Travel and Tourism Council.