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FHRAI seeks urgent notification of Rs 60K cr loan guarantee scheme from Centre

FHRAI seeks urgent notification of Rs 60K cr loan guarantee scheme from Centre

The apex body of hospitality industry in India, Federation of Hotel and Restaurant Association of India (FHRAI) has sought an urgent notification of Rs 60,000 crore loan guarantee scheme from the Centre to the banks and the non-banking financial companies (NBFCs)

FHRAI, Vice President, Gurbaxish Singh Kohli submits a represenattion before union finance minister, Nirmala Sitharaman seeking notification of Rs 60,000 crore emergency credit line guarantee scheme FHRAI, Vice President, Gurbaxish Singh Kohli submits a represenattion before union finance minister, Nirmala Sitharaman seeking notification of Rs 60,000 crore emergency credit line guarantee scheme

The apex body of hospitality industry in India, Federation of Hotel and Restaurant Association of India (FHRAI) has sought an urgent notification of Rs 60,000 crore loan guarantee scheme from the Centre to the banks and the non-banking financial companies (NBFCs).

FHRAI, Vice President, Gurbaxish Singh Kohli said in a statement that while loan guarantee schemes for hospitality industry and health sectors were announced simultaneously, the hospitality sector is yet to receive any operational guidelines or any details.
 
 FHRAI said that it has submitted a representation to the Union Finance Minister, Nirmala Sitharaman urging the ministry to take special measures for the survival of the industry. The association has asked for a moratorium on loans taken by the tourism and hospitality sector and a special resolution framework for restructuring of the loans along with moratorium extension of minimum one year for loans availed under Emergency Credit Line Guarantee Scheme (ECLGS).

FHRAI has also sought direct benefit transfer of basic pay to hospitality sector employees.
 
“The hospitality industry in the country has been severely impacted ever since the COVID19 pandemic hit the country in early 2020. The first lockdown and the restrictions put the sector at a stand-still for almost eight months. While the industry was hoping for some revival post-November 2020, the second wave stormed in by April - May 2021 totally deflating the business and the hope of the industry,” Kohli said in a statement.
 
He further said that it is highly unlikely for the industry to survive on its own especially as the third wave has hit the country.

“Our foremost request is for a moratorium of minimum one year for repayment of loans along with interest for the hospitality industry. In addition to this, we request that in view of the unparalleled situation of the tourism and hospitality sector, another round of resolution framework be announced for the sector for restructuring of its loans,” he added.

FHRAI has stated that the financial loss to the industry from the preceding two waves caused around 30 per cent of hotels and restaurants to shut down permanently. The remaining establishments continue to run in losses even today. The hospitality industry has reported losses of a whopping sum of Rs.1.40 lakh crores and around 50 million jobs were lost due to the pandemic.
 
“With one more tourism and business season washed off, the sector has nothing to hope for. It is staring at a dark future in the midst of increasing debt burden, obligations and statutory liabilities but with no means and ways to meet them. Under the present circumstances, we request the FM to provide the industry a moratorium extension of minimum one year for the loans taken under the ECLG Scheme. The repayment schedule for the loans taken under ECLGS 1.0 and 2.0 have started in most of the cases. But, unfortunately, those establishments do not have the cash flow to repay the loans due to the bad state of affairs in the sector. There wasn’t any business or income for the sector for almost ten months in the previous year and the present surge in cases have made conditions even worse for the sector,” Kohli stated.