Sri Lanka does what India hasn’t; clears proposal to help tourism sector

sri lanka

Sri Lanka has cleared a proposal to offer concessionary loans to the hospitality and travel sector to pay salaries during the Coronavirus epidemic. Hotels and travel agencies, registered with the Sri Lanka Tourism Development Authority (SLTDA), would be allowed to get a 5-year loan at a 4% interest rate, to pay a Rs 20,000 salary to each worker for up to 6 months.

The loan could be repaid in 5 years with a 2-year grace period, Economy Next has reported.

Tourism related firms registered with the SLTDA including restaurants, spas, wellness centres would be given a credit facility to pay salaries of up to Rs 15,000 per worker for 6-months. A 6-month moratorium for leases given to tourism sector vehicles would be extended for up to 12 months.

Sri Lanka has proposed a Zimbabwe-style central bank-refinanced 150 billion rupee credit facility for banks to give Coronavirus relief, despite foreign exchange troubles and difficulties in repaying foreign loans, the Economy Next report said.

Sri Lanka is planning to allow tourists to enter the country without mandatory quarantine from August 1.

Sri Lanka’s tourism friendly approach is in sharp contrast to India’s side-lining of the sector. The absence of immediate funds is sure to result in considerable job losses in India.

The Indian Association of Tour Operators (IATO), which represents more than 1,600 operators for inbound tourists, had sought financial support, refund of advance payments made to airlines for tickets etc. It had also urged the Indian government to abolish the goods and services tax and reduce GST and the visa fee to make India an attractive destination when normalcy returns. But all these demands fell on deaf ears.

India’s travel and tourism industry, represented by FAITH, had urged the central government for a 6-12 month waiver on loans, both on principal and interest. It has also approached state governments to consider electricity charges on consumption basis, waiver of municipal taxes, and deferment of licence fees, including for alcohol. But hardly anything has come through, except some measures at the state level.