Credit and finance for MSMEs: The government’s decision to approve additional Rs 50,000 crore credit support earmarked for MSMEs in the hospitality, tourism and related sectors under the Emergency Credit Line Guarantee Scheme (ECLGS) is timely as the demand for these services is picking up, said G Kishan Reddy, Union Minister for Tourism, Culture and the Development of the Northeastern Region (DoNER).
“The Modi government has been taking immediate actions and doing whatever it takes to restore and reactivate the tourism sector while protecting jobs and businesses. We are planning to support the sustainable recovery of tourism, shifting to eco-tourism and rethinking tourism for the future,” Reddy said in a statement by the tourism ministry.
With the dedicated credit support under ECLGS, MSMEs and other businesses in the hospitality and related sectors like hotels and restaurants, marriage halls, canteens, travel agents, tour operators, adventure or heritage facilities, leisure and sporting, private bus operators, car repair services, rent a car service providers, event/conference organisers, spa clinics, will be eligible for borrowing, the minister said.
Other businesses to benefit included beauty salons, motor vehicle aggregators, cinema halls, swimming pools, entertainment parks, theatres, bars, auditoriums, yoga institutes, gymnasiums, other fitness centres, units/persons engaged in catering or cooking and floriculture products etc.
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Finance minister Nirmala Sitharaman in the FY23 budget had proposed to expand the ECLGS coverage to Rs 5 lakh crore and also extend the validity of the scheme by a year from March 2022 to March 2023.
Meanwhile, the hospitality body Federation of Hotel & Restaurant Associations of India (FHRAI) has welcomed the government’s plan to reportedly offer GST refund to foreign tourists for local shopping which would make travel to India competitive and attract more tourists. As per a report by The Times of India on July 26, 2022, refund to tourists is part of a measure that is in the GST law. The Integrated GST Act allows refund on goods to be taken out of the country by a person who is normally not an Indian resident and is in the country for not more than six months for non-immigrant purposes.
FHRAI has also urged for free visas on arrival to encourage international corporates to hold meeting, incentive, conference, and exhibition (MICE) events in the country.
Also read: Government may consider extending the repayment period under ECLGS: FIEO