The hospitality industry on Saturday urged the Union Finance Minister to reintroduce the scheme granting ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers.
Hit hard, yet again, due to the second wave of the Covid-19 pandemic, the Federation of Hotel & Restaurant Associations of India (FHRAI) stated that the industry has witnessed rampant closures across the country in the past few months.
The tourism and hospitality sector has borne the worst brunt of the economic turmoil stemming from the pandemic, both in the first and the second waves. The sector hopes that the payment against compounding interest, like the one during the first wave, will provide some relief.
The scheme was announced in October 2020, with ex-gratia payment to borrowers in specified loan accounts from March 1 to August 31, 2020. Borrowers with loan accounts with sanctioned limits and outstanding amounts not exceeding Rs 2 crore were eligible under the scheme. FHRAI vice-president Gurbaxish Singh Kohli said the industry has suffered maximum losses during the last 16 months, and so it’s imperative that the government provides some relief.
According to FHRAI, 20-30 per cent of the hotels and restaurants in the country have permanently shut down due to financial losses, and over 20 per cent have still not reopened since the first lockdown in March 2020. The remaining 50 per cent that may have reopened are continuing to run in losses and revenues are below 30 per cent of pre-pandemic levels.
