India to issue free 5 lakh tourist visas and easy loans to tour guides

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The central government made a big travel announcement on Monday. At a press conference, India announced its intention to issue free tourist visas to 5 lakh tourists. The announcement included a series of economic aid measures for the tourism industry, which has been hit hard by the second wave of COVID-19 in India.

Finance Minister Nirmala Sitharaman spoke at a press conference to announce measures taken to ensure the survival of the pandemic-ravaged tourism sector as part of an economic package stating that the first 5 tourist visas lakh issued once India allows entry of this category of visitors will be issued free of charge.

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Sitharaman also said that government-recognized travel agents and tour guides will now be eligible for loans of up to Rs 10 lakh and Rs 1 lakh, respectively, without any processing fees or additional collateral requirements.

During the briefing, the presentation of the Ministry of Finance said that 1.1 crore of foreign tourists (FTA) visited India in 2019 and spent $ 30,098 billion on leisure and business.

The average daily stay of a foreign tourist in India is 21 days while the average daily expenditure is around $ 34 (~ Rs 2,500). “Once visa issuance is restarted, the first 5 lakh tourist visas will be issued free of charge,” the statement said.

The program will be applicable until March 31, 2022 or until the issuance of 5 lakh visas, whichever comes first, and the benefit will only be available once per tourist. The total financial implication is expected to be Rs 100 crore.

The Center also announced a “revive tourism” package where more than 11,000 tourist guides and registered travel agents will receive financial support. Working capital / personal loans will be provided with a 100 percent guarantee to people in the tourism sector. The package comes in the form of a new loan guarantee program where people in the tourism sector pay off their debts and restart businesses hit by the global pandemic.

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“The program will cover 10,700 regional level tourist guides recognized by the government (both the Union Ministry of Tourism and the states); and 904 travel and tourism actors (travel agents) recognized by the Union Ministry of Tourism. The loans will be provided with a 100% guarantee, up to Rs 10 lakh per agency and Rs 1 lakh per tourist guide. There will be no processing fee with a foreclosure / prepayment fee waiver. No additional collateral will be required, ”Sitharaman explained.

The travel industry has been among the worst victims of the pandemic. The Federation of Indian Tourism and Hospitality Associations (FAITH), an umbrella body for India’s tourism industry, warned in March that nearly 70% of the country’s estimated workforce at 5.5 crore people could be unemployed due to the impact of the coronavirus pandemic. He also said that the Indian tourism industry was facing bankruptcies, business closures and mass unemployment.

The minister also declared a new credit guarantee program to facilitate loans to 25 lakh people through micro-finance institutions. The interest rate on bank loans will be capped at MCLR plus 2%. The focus will be on new loans and not on repaying old loans.

The government has also offered to provide an additional corpus to the national export insurance account over five years to enable it to underwrite an additional Rs 33,000 crore of project exports.

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According to the Indian Federation of Hotel and Restaurant Associations, nearly half of all hotels and restaurants in the country have closed for good as airlines and airport operators struggle to survive.

With no tourism activity since last year, travel agents, tour guides and all those related to the travel industry were looking for some kind of relief from the government.

“The government’s proposal to provide free tourist visas to the first 5 lakh tourists, once visa issuance is restored, is a welcome first step that will help revive inbound tourism to India, which has been at a standstill since the start of the year. the pandemic, ”Mandeep said. S Lamba, president of HVS ANAROCK.

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