The guideline for infrastructure lending in the hospitality sector needs to be relaxed further so as to cover a majority of upcoming projects to fuel growth in the sector, according to industry body FHRAI.
The guideline for infrastructure lending in the hospitality sector needs to be relaxed further so as to cover a majority of upcoming projects to fuel growth in the sector, according to industry body FHRAI. According to the Federation of Hotel & Restaurant Associations of India (FHRAI), under the harmonised master list of infrastructure sub-sectors only hotels of 3 star and above category - located outside cities with population of more than 1 million - are covered under infrastructure lending.
"This restrictive stipulation effectively excludes nearly 95 per cent of all hotel projects from within it's preview," FHRAI President and Vice Chairman and Manging Director of Hotel Leelaventure Vivek Nair told PTI. Expanding the Master List of Infrastructure to include all the hotels throughout the country is required to make the benefit available to the industry, he added.
This would enable the hotel industry avail of financial assistance for 15 years, compared to present 8 to 10 years, at relatively lower rates of interest and replace the existing debts with external commercial borrowings (ECBs), Nair said. "The time for granting clearances must be reduced from the current up to 2 years to 5 months, as long drawn process of securing multiple regulatory clearances and approvals often leads to inordinate delays in project execution and commissioning," he added.
Exorbitant land prices, especially in metros, and escalating cost of constructions and services are other issues that impact the industry, Nair said. "It must be remembered that tourism is the largest employment generator in the country at 9.2 per cent of the total workforce employed in the country," he added.
Besides, Nair said, there is a need to enlarge the list of countries whose nationals can avail of visa on arrival. In a boost to the tourism industry during this month, the government has relaxed its tourist visa rules by lifting restrictions imposed on foreign visitors to have a two-month cooling off period between subsequent visits.
However, citizens of Pakistan, China, Iran, Iraq, Bangladesh, Afghanistan, Sudan and people of Pakistani and Bangladeshi origin and "stateless persons" will continue to come under the 60-day gap rule. The restriction was imposed in 2009 after the Mumbai terror attack when it was found that Lashkar-e-Taiba terrorist David Headley had made nine trips to India through his multiple-entry visa.
READ MORE ON infrastructure, hospitality, FHRAI, Federation of Hotel & Restaurant Associations of India, external commercial borrowings
ADS BY GOOGLE
video of the day
See fresh highs before Budget; like Maruti: Kotak Inst