Ease of Doing Business for MSMEs: Marred by the pandemic, a host of sectors and industries have been creating a beeline for the government sops to survive Covid. While the government had extended the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) lately to cover the hospitality, travel, and tourism sector, the market body for hotels has now urged Finance Minister Nirmala Sitharaman for ‘customisation’. In its submissions to Sitharaman lately, the Hotel Association of India (HAI) mentioned that ECLGS desires to aspect in the reality that getting hugely capital intensive, hotels have a higher percentage of fixed fees of operations that have develop into unsustainable due to nil or negligible revenues. Moreover, HAI stressed that the recovery of hotels will also be extended drawn as borders will be reopened with intense caution and traveler self-assurance will return more than an extended period of time.
“Inclusion of State Financial Corporations, Asset Reconstructions Companies (ARCs) and Debt Funds, extension of the moratorium, capping of interest rate at 8 percent, increasing of the delinquency period are some of the suggested customisations,” the association, which represents members getting properties like 2-star and under to 5-star, mentioned in a statement. HAI added that even though ECLGS 3. presents liquidity to spend interest obligations, it does not assist companies to survive, and therefore, interest subvention and a longer payback period can provide each liquidity and relief.
The government had in March announced the launch of ECLGS 3. to cover enterprises in hospitality, travel & tourism, leisure & sporting sectors and extended the all round emergency credit scheme like the preceding two versions by 3 months from March 31, 2021, till June 30, 2021, or till guarantees for the whole Rs 3 lakh crore quantity are issued. While this would surely assist MSMEs nonetheless the all round influence would be negligible, the apex body for the travel and tourism sector in India: Federation of Associations in Indian Tourism & Hospitality (FAITH) had told TheSpuzz Online.
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“We think something is better than nothing as 70 per cent enterprises in the sector are small businesses. Domestic tourism has recovered only 30-40 per cent while domestic travel has revived 80 per cent of the pre-Covid levels. However, international tourism is absolutely on standstill. I think the overall impact of ECLGS on MSMEs in the travel and tourism sector will be negligible,” Subhash Goyal, Secretary-General, FAITH and Chairman, ASSOCHAM National Tourism & Hospitality Council had told TheSpuzz Online. As of February 28, 2021, banks and other lenders had sanctioned 82 per cent or Rs 2.46 lakh crore of Rs 3 lakh crore below the ECLGS scheme, MSME Minister Nitin Gadkari had mentioned in a written reply to a query in the Rajya Sabha in March.
Among other asks by HAI had been permitting hotels to utilise the credit line for any business enterprise goal, like repayment of loans and interest payment, comprehensive or partial waiver of statutory costs like house tax, lease rentals, license charge, excise charge, and introducing program or policy for hotels to renegotiate lease rentals/license charge in a manner that for the remaining term, the lessor or licensor can have incremental revenues, even though hotels can recover losses. Recently, retailers, traders, and other market groups had approached the government for related positive aspects to fight Covid.