COVID-19 | Post-pandemic, India’s tourism sector stares at 70% job loss

Impact likely to be felt in white and blue-collar jobs

Thiruvananthapuram, Kerala 17/10/2019:::Empty beach chairs and coats await tourists at the Light House Beach in Kovalam near Thiruvananthapuram ......Photo:S Mahinsha/The Hindu

Indian tourism and hospitality sector, which is badly hit by COVID-19, is staring at a potential job loss of around 38 million, which is around 70% of the total workforce, leading accounting and audit firm KPMG says.

The tourism and aviation sector has been the first industry to be hit.

Questions of survival

The sector faces questions around its very survival and many believe this crisis is a greater threat than the earlier ones such as 9/11 and the financial meltdown of 2008-09, the KPMG pointed out in a report “Potential impact of COVID-19 on the Indian economy.’’ The hotel, aviation and travel sector together may incur a loss of about 85 billion as per the IATO estimates due to travel restrictions and large scale cancellations. The impact is likely to be felt on both white and blue collar jobs. Outbound and inbound travels will be at an all time low, says the report.

On the supply side, it has pointed out that the demand for aviation turbine fuel will substantially decline with international and domestic travel closed.

Rationalise VAT

To tide over the crisis, the report says the tax and compliances related to fuel infrastructure and plane charges must be discontinued. In other short measure, it says VAT, which ranges from 0% to 30% on ATF should be rationalised to a maximum of 4% across all States for six months.

For easing financial stress, moratorium for the next 12 months on all interests, principal amounts, convenient relaxation of all loans has been suggested. A campaign “Postpone travel, don’t cancel” to allow travellers to postpone journeys up to 12 months has been mooted.

In the medium/long term mitigation measures, GST holiday for all travel and tourism services has been mooted. Waiver of property and excise taxes for the next 12 months by all State governments, reduction in power tariff, and bringing ATF under the ambit of GST have been mooted.

All tourism entities-airlines and hospitality must be treated as priority sector lending, and campaign to promote domestic tourism has been recommended.