Although the Tourism Ministry has managed to distribute a few cheques with the support of a couple of partner banks (MLIs) to create photo opportunities for the Minister in Delhi and Hyderabad, the fact of the matter is that the much-trumpeted Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS) of the government remains a relief package on paper with the benefits of the same still at large for 99 per cent of the targeted beneficiaries - recognised tourist guides and travel and tour operators.
The scheme, announced by the Finance Minister and notified last October by the NCGTC, was supposed to benefit over 10,700 regional level tourist guides, and over 1000 travel and tourism stakeholders. As per the scheme, while the RLGs are eligible for a loan of a maximum INR 1 lakh; the travel and tourism stakeholders approved by the Ministry of Tourism were eligible for a maximum of INR 10 lakh as “working capital/personal loans'' to “discharge liabilities and restart the business.”
The travel and tourism stakeholders had raised questions about the scheme and its intent when the guidelines of the policy came out last October. The key clause in the guideline that the “borrower can avail assistance either under the ECLGS or under LGSCATSS '' was contested by the trade associations from the very beginning. The LGSCATSS guidelines mandated that the borrowers pay off the earlier ECLGS before applying for the new scheme had disqualified a vast number of approved tour operators from the ambit of the new scheme.
Not many banks are cooperating and ready to join the scheme as MLIs are also a reason for the disenchantment of the industry to the scheme. “The whole scheme is nothing but an eye-wash,” a top office-bearer of a leading trade association remarked when asked about why not any tour operators are in the beneficiary list.
Out of the over 11,000 eligible companies and individuals, less than 100 Tourist Guides have received cheques under the scheme. “We are 3287 RLGs recognised by the MoT. Not even 100 people have received the loan benefit so far,” says Ajay Singh, President of the Tourist Guides Federation of India (TGFI), a national Association of the Ministry of Tourism-approved regional guides.
Singh says that the Guides community, having been without any job for almost two years, requires financial support for survival, but the banks are not ready to listen. “The key challenge is the loan guidelines itself,” he says. Singh gratefully remembers the efforts of the top MoT officials calling up Bank managers and trying to convince them about the scheme. Despite their best efforts, banks apply so many conditions which are prohibitive for people.
“Some banks say that they will entertain applications of only their existing customers. In this case, there are not too many options available,” he says. Union Bank, Punjab National Bank, and Karur Vysya Bank are partner banks in this scheme.
“These are kind of pre-approved loans where the government is giving guarantees. Ideally, the banks should not ask too many questions or put too many conditions. But the experience so far has not been good,” says Anand Kumar Pandey, General Secretary of TGFI - Delhi region.
The banks are asking guidees to prepare and submit projects, and submit IT returns of the last four years, etc. “Banks are not cooperating at all. The government has to look into it,” he says. Due to his persistent efforts in coordination with the Ministry Tourism officials, over 60 guides have received loan assistance in the region so far.
They also cite instances where certain banks have extended loans and later within a week withdrawn the entire loan amount and interest for the period from the beneficiaries account raising eligibility issues. “When we made hue and cry, they returned the interest part,” Singh said.
While the government has set the maximum loan eligibility of INR 1 lakh for tourist guides, banks are offering much less. “In Khajuraho, banks are asking us to buy laptops and submit bills for an INR 25,000 loan under the scheme,” says Akhilesh Mishra, a key member of the Guides Association of the city. No one has received the loan benefit in Khajuraho.
While the government in its objective of the scheme says unequivocally that the “scheme is to provide relief to eligible travel and tourism stakeholders by way of need-based financial assistance who have been adversely impacted by the Covid-19 pandemic” and therefore “100 per cent guaranteed”, the banks are literally looking the other way round.
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