New Delhi, June 29 Ratings agency Crisil on Tuesday termed the government's relief package for the tourism sector as a 'timely' move that will gear up the industry for recovery with the easing of lockdowns post the second wave of the Covid-19 pandemic.
The measures announced on Monday include a Rs 60,000 crore loan guarantee scheme for the sectors impacted by the pandemic, and within that, working capital or personal loans to the travel and tourism stakeholders.
As per the agency, these steps are expected to put capital in the hands of the hard-hit tour operators and other stakeholders to restart business.
The Centre has also announced free one-month tourist visas for the first five lakh tourists once global air travel opens up.
"Guaranteeing working capital or personal loans of up to Rs 10 lakh for travel and tourism players and up to Rs 1 lakh for travel guides is expected to benefit 11,000 stakeholders. This will help them service the existing obligations, leading to an interest cost savings of 200-300 bps, and help restart businesses," said Manish Gupta, Senior Director, Crisil Ratings.
"The move to provide five lakh free one-month tourist visas till March 31, 2022 amounts to only a Rs 100 crore allocation, but importantly, it sends out a message that India is getting ready to welcome tourists. This could provide a boost to budget-conscious travellers before the inbound season, which typically starts from October," Gupta added.
Besides, the expansion of the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 1.5 lakh crore to Rs 4.5 lakh crore for sectors impacted by the pandemic is also a positive move, the ratings agency said.
The highly-fragmented tourism sector includes stakeholders such as travel agencies, individual travel agents, car rental agencies and tourist guides whose businesses were practically wiped out as the pandemic put a stop to travel.
"But all these measures only set the stage for what the sector critically needs opening up of inbound and outbound travel, which is currently very restricted. With improved vaccination rates, we expect opening up in the second half of this fiscal, but that would also be contingent on the policies of the foreign countries," the ratings agency said.
"Domestic travel though should start to bounce back as state-level lockdowns ease. This would be crucial for the industry to claw back to 35-40 per cent of business this fiscal compared to the pre-pandemic levels," it added.
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