Tourism: A paralysed industry at the mercy of the government


Budget 2021 should have a concrete plan for financial stimulus to the entrepreneurs in a bid to help them manage day-to-day affairs until the tourism market is open for business.

Our constitution instructs a democratic Government to perform its duty when its people are in distress. And Covid pandemic was more than crazy enough to shatter the unorganised tourism sector beyond words and planning. Now after 9 months of zero revenue and absolutely no support from the Government, the tourism industry, once the most favoured forex and employment generator, now is in paralysis and nearing death.

The tourism Industry was after the Government and its various ministries for relief but in vain. Now we are looking for a proactive budget at the centre which can energise the industry to survive for now and revive later. For this, just announcements will not help.

The infamous Rs 20 lakh crore financial stimulus announced by the Hon. FM did not reach anywhere and the banks who were supposed to disburse financial assistance to the industry cared a damn to the advice of the FM or even RBI. I don’t understand why we have an office like the Directorate Of Financial Services when they can’t regulate the banks in tune with the country’s crisis and development projects.

When approached our Bank (Yes Bank Ltd) for the disbursement of an additional working capital sanctioned by Kerala Tourism as a special project to assist the struggling entrepreneurs, the Bank’s answer was interesting.

When an industry across the globe is running with near to zero revenue, Indian banks expect us to do a magical turn over to get a loan.

I would like to quote the words of the bank manager: “Though the estimated sales turnover for FY’21 is only INR 2.5 MM, considering the growth projection up to INR 30 MM in FY’22 ( higher than FY’20 turnover) the existing working capital limit of INR 6.0 MM is sufficient by the turnover method assessment (20% of Sales turnover)“.

When an industry across the globe is running with near to zero revenue, Indian banks expect us to do a magical turn over to get a loan. Or we should have made a bogus projection for 2021 just like the other cheating giants did at banks.

Tourism is the only area that is yet to re-open.

Finance Ministry should have analysed how the banks behaved towards their announcement of the financial stimulus and taken corrective measures. Even the SEIS benefit for FY 2019-20 which is the right of the stakeholders is not disbursed by the Government. This shows the attitude of the government to an Industry which is most stressed in Covid.


Coming to the point what a proactive FM can include in the upcoming budget is a concrete proposal for revitalising the industry to survive now and revive later so that they can perform towards bringing the GST and Forex to the Government kitty as earlier. But I am not sure whether the Government has done any survey on the damages to the industry and job losses in tourism etc.

In my opinion, Hon. FM may bring a stimulus in the budget targeting to address the immediate concern and revival. The Budget should have a clear plan on a financial stimulus to the entrepreneurs to manage their day to day affairs until the market is open for business.

The Indian Government should plan on the reopening of its borders, visas, and international flights for tourists.

Tourism is the only area that is yet to re-open. The government can introduce an interest-free loan in the tune with 50% of GST paid by an entrepreneur for the last three years. This will give liquidity for them to survive until reopening. This loan should have a moratorium of one year and a repayment tenure of 10 years. Along with this Government should disburse the SEIS immediately which is due since June/ July 2020.

Secondly, the Finance Ministry should instruct the banks to behave responsibly towards giving additional working capital for Companies with good financial records until March 2020. If the banks don’t listen to the Government or RBI, then our country is in big trouble. Let the government consider the GST payment of an entrepreneur as a benchmark to assess the credibility and this will give a big identity to a taxpayer. Also, this will prompt others to be good taxpayers in the future.


The third point is to include an incentive to the Tour operators who bring tourists to India after re-opening for the next 2 years. This will vitalize the sector to perform better and promote India well. This incentive could be managed from the marketing budgets of India Tourism which is sometimes spent without an audit or result analysis.

Finally, but most important. The Indian Government should plan on the reopening of its borders, visas, and international flights for tourists. We are always famous for last-minute decisions. At least in International Tourism, this attitude will not work. International travellers love to plan their travel well in advance and all our overseas partners ask about the re-opening dates for India but nobody knows.

Finance Minister should push other related Ministries to take a call on this and announce the dates for the reopening of its borders. This means a lot as once the tourism is open, then the cash flow of the Industry will improve and even the banks will feel comfortable in supporting the industry better. It will automatically fasten up the economic process in tourism.

Also Read: Government inaction forced 50% of tourism industry professionals to leave the sector: George Scaria

(George Scaria is the Managing Director of Keralavoyages India Pvt Ltd, a Travelife Certified Tour Operator.)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


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