FHRAI Hosts Interactive Webinar With Mr. Sanjeev Sanyal, Principal Economic Advisor, Ministry of Finance

Structural Reform, Rationalizing Licenses For Hospitality industry & Intervention Where Existing Systems Are Ineffective – Sanjeev Sanyal

Mumbai, September: The Apex body of Hotels and Restaurants in the country – Federation of Hotel & Restaurant Associations of India (FHRAI) yesterday, held an interactive webinar with the Principal Economic Advisor, Ministry of Finance – Mr. Sanjeev Sanyal. The apex Hospitality Association informed Mr. Sanyal about the reservations and non-cooperation of banks in extending the one-time restructuring of loans announced by the Government and requested for his intervention in getting the issue resolved. Mr. Sanyal suggested focusing on matters that need most urgent attention and narrowed them down to restructuring of existing debts which would require financial restructuring by the banks, bringing back people from their homes to their jobs and specific policies related to Hospitality sector. For faster and effective turnarounds, he advised the Association to identify solutions within the existing systems instead of recommending a new scheme for the sector.

“The Government has announced several measures for businesses across sectors to benefit from it. However, if something isn’t working, the Government will intervene and identify the reasons for it not working. I would ask the industry to flag specific cases and details of the banks, so that we can take measures to address and resolve the issues. I also ask that the Association brings to our attention any specific instances where Banks are not following the directions of the RBI or the Finance Ministry and we will take appropriate action. The Government is aware of issues and hardships faced by the tourism and hospitality sector and assures the industry that it is taking all possible steps to mitigate the damage to the sector,” says Mr. Sanyal.

Mr Gurbaxish Singh Kohli, Vice President, FHRAI and President, Hotel and Restaurant Association of Western India (HRAWI); Mr Pradeep Shetty, Jt. Secretary of FHRAI and Vice President, HRAWI; Mr DVS Somaraju, Hon. Treasurer – FHRAI, Mr SP Jain, MD, Pride Hotels; Mr Surinder Jaiswal, President, HRANI; Mr Vivek Nair, CMD, Leela Hotels; and Mr Nirav Gandhi, MD, Express Hotels, were part of the FHRAI interactive meeting delegation.

“We thank Mr. Sanyal for taking the time to hear us out and for his valuable suggestions. We have put forth to him the most critical aspects and issues compounding to the sectors woes. We presented to him the revenue projections which indicate a loss of 1.6 lakh crore and job losses mounting 5.5 crore if the sector is not revived. With no revenues, but rentals, salaries, statutory bills still to be paid, the industry may succumb by the year end. Indian Hotel and Restaurant (Hospitality) industry contributes about 10 per cent GDP to the country’s economy and needs urgent attention from the Government,” says Mr. Kohli.

Mr. Sanyal opined that since there is an existing framework, it can work for Hospitality too. He added that there are common issues in every sector, and since 100 per cent guaranty is given to MSMEs, it will be applicable for Hospitality as well.

“During the interaction we have informed Mr. Sanyal about our dialogues with the Commerce Ministry for rationalizing and cutting down the number of licenses under ease of doing business policy. We also apprised him on the unscrupulous licencing laws including copyrights issues. However, the conversation was mostly focused on the much needed one-time restructuring of loans with banks and about the issues we are facing in getting it executed. We have recommended that it would do much good to the industry if a single window for redressal with the RBI were to be instated for specific issues,” says Mr. Shetty.

Mr. Surendra Kumar Jaiswal, Vice President, FHRAI stated that Banks have shown defiance and refused extending funding under ECLS as well as for restructuring despite of RBI circulars, CBDT circulars and the Finance Minister’s statements. Also, despite an advisory issued by the RBI to banks that the entire accumulated interest of seven months of moratorium period be distributed and collected up till 31st March, 2021, the banks have disregarded the RBI and put our businesses in big jeopardy by debiting all of the accrued interest in one go, on the 1st of Sept.

Mr. Sanyal has asked FHRAI to reconnect over the matter of rationalizing licenses for the Hospitality industry. He recommended sorting through the requirements and resolving issues one at a time. He went on to reassure that the Government is by their side and wants to make sure that the industry is kept alive to be able to expand its horizons in better times.

“Time is of essence here and I suggest utilizing what is presently available and getting it done. So we focus on available things and try to resolve issues within existing choices that are not working. I agree that structural reforms with centralized rules and regulations are required for the industry. I ask that the industry offer solutions and we’ll jointly try to resolve 80 per cent of the problems. In the order of priorities, let’s do the minimum amount to obtain maximum benefit, no laundry list. Inform the Government of the impact of rules and what would solve the problems. The simplest way would be to take examples from the rest of the world where the systems are working successfully. So instead of looking to perfect things, we should aim at minimum moves for maximum outcome,” concludes Mr. Sanyal.

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