Amid COVID-19 Lockdown, Tourism and Hospitality Sector Stare at Over 3.8 Crore Job Losses

Tourism and hospitality sector is among the worst-hit sectors in both India and across the world after the outbreak of the COVID-19 pandemic. While initial loss estimates by the stakeholders are shocking, the Bharatiya Janata Party-led central government has remained silent on the crisis despite repeated appeals from the concerned stakeholders.

This pandemic could render 3.8 crore people jobless, which is around 70% of the total workforce (over 5.5 crore) in the tourism and hospitality sector, according to Federation of Associations in Indian Tourism & Hospitality (FAITH). As per reports, the job losses started in February itself.

On Monday, while passing the Finance Bill 2020, the central government has stated that it will start levying TCS (tax collected at source) on travel from October, instead of April, as earlier proposed. “So far, this is the only exempt that the government has done to this sector which is not at all sufficient in the crisis as the business has been completely shut down due to the ongoing lockdown,” said Subhash Goyal, Chairman of ASSOCHAM Tourism Committee and Secretary of FAITH.

On March 19, FAITH wrote to the Prime Minister’s Office urging the government to rescue the sinking sector from the current crisis. “As a result of this pandemic, the tourism industry in India has reached dire straits today and is staring at mass unemployment and bankruptcies,” read the letter. FAITH stated that with declining revenues, “almost all tourism businesses are running out of working capital. However, with the responsibility of staff and payment of their salaries, EMIs to service, advance tax, PF, ESIC, GST, excise and other state levies, bank guarantees, security deposits, this industry needs your (government) support now more than ever”.

Goyal told NewsClick that it is unfortunate that the government has not yet responded to provide stimulus to the sector despite repeated appeals. “Countries affected by COVID-19 such as China, the UK, the US, South Korea and Singapore and so on have already announced bailout packages for their struggling economies. For instance, European Union and UAE have already exempted the entire tourism industry and hotels from taxes for 12 months. The United Kingdom has announced to give 80% salaries to all affected private sector employees subject to a maximum of 2500 pounds. Similarly, India needs to act promptly to revive the sector,” said Goyal.

ASSOCHAM Tourism Committee and  FAITH have urged both the Prime Minister and Finance Minister to set up a support fund for 12 months on the lines of MNREGA to support basic salaries with ‘direct transfer’ to affected tourism employees.

Among other demands put forward by the associations include a 12-month moratorium on the EMIs of principle and interest payments on loans and working capital from financial institutions; doubling of working capital limits; a 12-month deferment on all statutory dues from central and state governments; a 12-month deferment on all insurance premiums; a 12-month GST holiday for the travel, tourism and hospitality sector among others. FAITH has also urged the government to set up a “national tourism task force of all the government departments at central and state levels as well as industry stakeholders to meet regularly to fast track all tourism investment approvals”.

According to the World Travel and Tourism Council (WTTC) projections, COVID-19 could cut 50 million jobs worldwide in the travel and tourism industry and Asia is expected to be the worst-affected continent.

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