Nitin Gadkari, Union Minister for Road Transport, Highways, and MSME has asked the hospitality industry to look at setting up an NBFC to take care of the capital requirements of the industry. The Union Minister said that as most of the hotels earn revenues in dollars, it becomes easy for such NBFCs to access foreign funds at much lower interest rates. This will help the hotel industry to access loans at less than 3% interest compared to over 10% interest being charged by the Indian banking system. The Union Minister cited the example of some of the Automobile companies in the country who have set up their own NBFCs.
For finance, every industry has to think out of the box, the Minister said. The Minister informed that the government has announced various schemes to help the MSME sector to overcome the working capital constraints in the wake of the Covid-19 pandemic. He said that the INR 3 lakh cr MSME fund is aimed at enhancing the liquidity in the market which is critical to drive demand and supply. He said that the government is giving a guarantee for collateral-free 20% additional working capital assistance and there should not be any hesitation on the part of the banks to help the businesses.
Similarly, he said that the government will soon release an INR 20,000 cr fund to support the restructuring of NPA under the present policy. The government will take an equity stake in the restructuring of NPAs to remove the current obstacles being faced by the financial institutions in restructuring such assets. The framework is ready and will be released soon, he said.
Gadkari said that people and businesses have to learn the “art of living” under the Covid-19 and should learn to adjust to it. Saying that he fully understands the problems of the hospitality sector in the country, Gadkari said that the government has asked all state governments to postpone all mandatory fees and charges associated with the hotel industry.
Responding to the questions of the hoteliers, Gadkari said the MSME department has set up a dedicated platform - Champions - for MSMEs to address their grievances associated with the government schemes and all the issues will be addressed through it.
Gurbaxish Singh Kohli, Vice President, FHRAI, Pradeep Shetty, Jt Secretary, FHRAI, SP Jain, MD, Pride Group of Hotels, Vivek Nair of The Leela Group, Surender Jaiswal, President, HRANI among others spoke at the webinar.
This article first appeared in Economic Times
