Economy

FHRAI seeks special credit guarantee window for hospitality sector

PTI New Delhi | Updated on May 02, 2021

‘The sector is under tremendous financial stress due to the ongoing lockdown’

The Federation of Hotel and Restaurant Associations of India on Sunday said it has requested Finance Minister Nirmala Sitharaman to provide a special credit guarantee window to the hospitality sector under the Emergency Credit Line Guarantee Scheme (ECLGS).

The industry body has asked the government to standardise and align the tenure and the moratorium facilities floated under ECLGS 1.0, 2.0 and 3.0, FHRAI said in a statement.

Also read: Hotel industry body flags lack of sector- specific stimulus package, seeks meeting with PM

FHRAI has also asked that the tenure of loan and moratorium facilities granted under the ECLGS 3.0 should be extended to loans already sanctioned under the earlier ECLGS with retrospective effect, it added.

‘Align tenure’

“The repayment schedule for loans taken under ECLGS 1.0 and 2.0 are likely to begin now, but unfortunately due to the ongoing lockdown many establishments do not have the cash flow to repay it.Therefore, it is imperative to align the tenure and moratorium facilities under ECLGS 1.0 and 2.0 with ECLGS 3.0,” FHRAI Vice-President Gurbaxish Singh Kohli said.

Also read: Retailers seek clarity on ECLGS 3.0

The sector is under tremendous financial stress due to the ongoing lockdown. Closure of many establishments in large numbers has been reported from all parts of the country along with massive job losses in the sector, he added.

‘Government support’

“Without adequate government intervention, the situation will escalate further impacting lakhs of livelihoods along with a large number of units pushed towards insolvencies and NPAs,” Kohli said.

Asking for additional funds for the sector among other things, FHRAI said allocation of ₹54,000 crore to the travel, tourism and hospitality sector along with 27 other sectors under the ECLGS 2.0 was grossly inadequate and so, additional funds under ECLGS be provisioned specifically for the hospitality sector.

FHRAI VP Surendra Kumar Jaiswal said it is imperative to make some additional provision of funds under the ECLGS to support the survival efforts of the tourism and hospitality sectors which have been continuously ignored in all previous financial packages.

ECLGS was launched by the Government of India as a special scheme in view of Covid-19 crisis.

Published on May 02, 2021

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