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Lockdown affects Himachal's 7 lakh people dependent on tourism, 6.6% of state GDP

Manali during lockdown
Counterview Desk
A Himalaya Niti Abhiyan letter to the Himachal Pradesh chief minister has argued that the current lockdown has adversely impacted around seven lakh people and their families, who were directly or indirectly dependent on tourism, demanding, the state government should come up with a complete package for them.
Insisting that the concession ranging from tax waivers to livelihood support should be immediately worked out, the letter, signed by its senior activists, says that once the lockdown is over, the state government should begin consulting with all the stakeholders for a roadmap for the tourism section, which is likely to see a major change in the near future.

Text:

We, the people of the tourism sector of Himachal Pradesh, appreciate the state government’s measures taken to check the community spreading of COVID-19, prevention, lockdown, and other administrative measures such as physical distancing seem to be the only way out of this situation. We fully support the effort of the government in this regard and we will continue to follow all the instructions and guidelines.
Tourism industry a mostly the self-establishing sector/ industry contributes about 6.6% to the state GDP of the state, approximately 0.7 Million people and their families are involved directly/ indirectly in the tourism industry. It is known that we are a tourism state and tourism vastly affects the economy and local livelihoods.
As we all are very well aware this crisis, has hit the tourism industry hard, making it one of the worst/ negative impacted industries. It is critical to note that peak season for tourism in the state starts from mid-March till mid-July. This is the period when people associated with the industry earn a living to sustain themselves during the lean months.
Various stakeholders have started their units, business cycle with loan from the national as well private sector banks, corporations and other financial institutions of government and semi government. Some of them have started the business with the Mukhya Mantri Swalamban Yojna, and with start-up scheme of the Government of India. Some of them invested, latest under a very influential and powerful drive of the Himachal Pradesh government the Investor Meet.
Overall whole professionals working in the tourism industry has affected adversely and most of them are unable to repay the bank loan and at the verge of bankruptcy. The sector plays very important role in the development of the state. Given the circumstances we would like to enlist a few impacts in details:
1. Job and livelihood loss: There are a number of professionals who are linked with this sector from producers to service providers, if we enlist the services then we may understand the depth of the impact going to be on this sector.
a. Home stays, guest houses, hotels: In this sector this is a commonly visible infrastructure, where thousands of owners are running the units with a team of two to 100 staff in the state. But at large the units having the staff range from two to 10 which with room capacity from two to 25. The number of such units is very high and locally operated. These units are being running by youth under the self-employment drive. These units are also generating good amount of employment as well as revenue. But due to current situation these are very badly affected.
b. There are employees working at various levels in the organisation from management and admin team, marketing team, kitchen staff, housekeeping and so on whose jobs are now rendered redundant and almost everyone had to be sent home. For small adventure-based operators and homestays/ guesthouses it is difficult to pay staff their salaries, given that in the coming months keeping the business afloat itself is going to be a challenge.
Himachal tourism department should undertake an impact assessment based on the implications of the current situation
c. Restaurants, highway food corners, tourist place food stalls etc. Thousands of peoples are working in this section and affected adversely. Most of them are unbale to repay their debt and even unable to pay their employee.
d. Apart from the hospitality sector, there are myriad allied activities that support the tourism industry and are majorly constituted by the local people like Taxi operators, travel agents, adventure tourisms players, tourist guides, porters, horse ride providers, paragliders operators, off road vehicles, snow scooters operators, skating, hot air balloon, rafters, camping sites, trekker guides and many others that are completely devoid of any income in the coming months.
2. Running expenses: Depending on the scale of the businesses, the running expenses vary from several thousand to lakhs. This includes water, cooking gas and electricity on a commercial value which is much higher than the domestic rates, staff salaries, municipality taxes, sewerage cess, all which in period of crisis will affect the businesses adversely.
3. Capital expenses, loan and interest payment: Capital expenses also vary from business to business, for e.g. lease payment for hotels and guesthouses to equipment purchasing and rent for adventure-based businesses. Per year these expenses can run up to several lakhs. Most of the people engaged in such activities are the youth of the state who are mostly if not entirely dependent on loans.
Looking at the above impacts on the industry and especially the hospitality sector, it seems necessary that the government intervenes to protect this industry. Hence, we would urge the state government to provide certain relief and support:
1. Extension and loss compensation for the given period: It will be critical for the government to create a relief package for the all workers (within the formal as well as the unorganised sectors) whose jobs and livelihood have been lost and affected during these times. The people should be given unemployment wages until the state of normalcy is reached.
Further, for the local people of Himachal Pradesh as well as people from outside the state, who have leased out properties to run their businesses, we would like to appeal for the wavier off their lease amount for the financial year 2020-12 or at least for the months until the tourism industry is fully functional once again.
We would like to reiterate once more that the peak tourist season for Himachal Pradesh is from mid-March to mid- July, which for this year has been brought to a standstill due to the health pandemic created because of COVID-19. These relief measures will go a long way to instil confidence among the people of the tourism industry.
2. Financial assistance: In the same vein, we would ask the state government to announce a package to support businesses so as to ensure that all staff/ allied workers who were employed are not put in a vulnerable position and that their salaries/ wages as well as social security benefits have been released in a timely manner.
3. Waive off interest and EMIs on loans: As most businesses and start-ups require bank loans in either the initial phase or expansion phase, we appeal to the government to waive off loan interests and EMIs until the tourism economy is on a revival path, after revoking of the lockdown at national level additional six months grace period be provided for repayment of loans without any interest rate during the period.
This step will boost the morale of people associated with the industry as well as the youth who mostly take loans to start innovative projects to work for the mountains in the field of tourism, environment, social welfare and development, and educational reforms.
4. We request that the charges for commercial electricity and commercial gas cylinders be regulated to a lower price than the present until the tourism industry returns to its business as usual (or at least for two years). Further, the property cess and other municipal taxes like water bill and sewage cess should be waived off for this particular period (two year).
Once the lockdown has been lifted, we propose that the state government calls for multi-stakeholder consultations involving all tourism service providers to understand from each of the sectors what has been the impact of this crises and to further announce economic and other schemes/ packages that maybe be required to support the people.
There is a strong need for the tourism department to undertake an impact assessment based on the implications that the current situation will have on tourism and to work with all stakeholders in developing a roadmap for tourism in Himachal Pradesh. Tourism as the way we understand it presently is undergoing rapid changes and this is a crucial time for all minds to come together to ensure that the tourism in the future is undertaken in a planned, sustained and regulated manner.
We urge the Government of Himachal Pradesh to plan for short, medium and long-term measures to ensure that above mentioned issues, which are both imminent and urgent are given due consideration. People associated with the tourism industry are anxious and an announcement and action from the side of the government will go a long way in instilling confidence in the people who are looking at the government to support them during this period of crisis.
This will support the millions of people who are playing a very positive and enormous role in the growth of state.
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Signatories: Guman Singh, Kulbhushan Upmanyu, Sandeep Minhas, RS Negi, Vishal Deep, Sant Ram, Rajinder Chauhan, Lal Chand Katoch, Jia Lal, and Lalit

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