The central government should urgently come out with a specific stimulus package for sectors like travel & tourism, hospitality and aviation which are leading employment generators and some of the hardest hit by the Covid-19 pandemic, said M Damodaran, former Chairman, Securities and Exchange Board of India (SEBI) and Director on boards of various listed entities.
He was delivering the keynote address in a virtual meeting titled ‘Challenges & Opportunities Post Covid-19 for the Service Industry’ on Saturday. The meeting, organised by the South India MICE Association (SIMA), was moderated by a senior journalist Rajdeep Sardesai.
“There must be a sector by sector approach. I think we need to spend far more money than targeted in a constructive fashion by looking at sectors which are employment providers,” Damodaran said.
“Forget about tourism, revenue and all of that. Today you (government) need to provide employment but if you don’t support a sector like tourism which is a major employment generator you are hurting employment,” he added.
Damodaran, who is the Non-Executive Independent Director and Chairman of the Board of InterGlobe Aviation (Indigo), said, “Many developed economies have given large packages to the airline industry but in India, the airline industry hasn’t got one rupee till date. I think we need to show courage and recognise that there are some sectors that need support.”
He also added that while the Central Bank has done enough from the monetary policy front to spur growth, the fiscal policy, which lies with the government hasn’t seen much enough action.
“Between lives and livelihood, have we fallen between the stools not doing enough for lives and for livelihood ?” he wondered.
Earlier, speaking at the event, Vikram Kapur, Secretary Tourism, Government of Tamil Nadu said, while various stakeholders from the tourism industry has been demanding that the government waive or defer the collection of statutory dues, property tax and electricity bills, it was not possible due to the state’s critical fiscal situation.
“It is not possible for the electricity board or municipal bodies to waive off these statutory dues because they have their own fixed costs. Particularly, during Covid times it is very important because they don’t have any other source of revenue. State governments are in deep fiscal distress,” he added.
Commenting on the challenges of the hotel industry, Ajay Bakaya, MD, Sarovar Hotels said, the hospitality industry has been in ICU with ventilator support for a long time and with no real help from the government. “The trouble is that we are forced to manufacture our own oxygen so nobody is holding it to our face.”
“Perhaps, it’s too late. But at least now the central government should come out with a package to the tourism sector. Interest or loan repayment moratorium can help the businesses both small and large,” Bakaya added.
Madhu Mathen, ED – Inflight Services, Air India said the biggest challenge posed by the pandemic is the unprecedented global aviation crisis.
Citing IATA estimates, he said air travel globally is not expected to reach the pre-covid levels until 2024, and the global passenger traffic is expected to come down by 60 per cent to 2 billion in 2020.
However, he also added that the Covid has given some opportunity to the Indian Tourism industry.
“Unlike Singapore, Hong Kong or Dubai, India is a very strong domestic opportunity. According to estimates, Indian domestic air travel has been rebounding quite strongly and it’s almost at 50% of pre-covid levels,” Mathen said, adding : “Because of the covid fear, there is a clear preference for outdoor scenic travel and travel to less densely populated areas. This could be a silver lining which tourism marketer can tap.”