Finance Minister assured the hospitality and civil aviation industry honchos that she would ask banks to see how they could bring relief or extend support to the sectors
Rising global oil prices a matter of concern, says Sitharaman at post-Budget interaction with industry
Finance Minister Nirmala Sitharaman on Sunday sought to extend a hand of support to two struggling sectors of the economy — civil aviation and hospitality — that have been ravaged by the Omicron variant-induced curbs on people’s movement besides the flare up in global oil prices.
At two separate post-Budget interactions with industry bodies FICCI and Assocham, Sitharaman assured the hospitality and civil aviation industry honchos that she would ask banks to see how they could bring relief or extend support to the sectors.
Sitharaman also highlighted that the recent surge in global oil prices “is a matter of concern for all of us”.
In the case of hospitality sector, Sitharaman assured former FICCI President Jyotsna Suri that a meeting would soon be convened between banks and representatives of hospitality industry to hear their views on the restrictions placed around restructuring of loans and their demand for moratorium on repayments.
Suri, who spoke at the FICCI organised interaction, said that restructuring facility offered by banks came with “stringent covenants” and suggested that the five ratios mandated for adherence should be pushed by two years till 2024.
At the Assocham meet, SpiceJet Founder Ajay Singh said the civil aviation sector has become “chronically ill” and needed Centre’s support as the banks have been withdrawing facilities — even if they are well serviced— from companies that are going to face prospect of problems for their sector (civil aviation in his instance).
“There needs to be a message of support from the government…perhaps for two-three years the aviation sector could be put under priority sector for bank lending or granted infrastructure category status. That could greatly help as today the banks are not there when we need them. Oil is at $ 90 per barrel and this is single largest input in aviation”, he said.
While noting that he was aware that bringing Aviation Turbine Fuel (ATF) under GST was not a budget issue and had to be handled by the GST Council, Singh urged Sitharaman to take up the cause of the struggling civil aviation sector with the GST Council. Singh also suggested that government should go in for excise duty cuts to help the sector.
Responding to Singh’s suggestions, Sitharaman said that she recognises that the civil aviation sector is faced with “serious problems” due to the omicron induced movement restrictions. “Besides domestic State level restrictions, the international quarantines are hurting the aviation industry just at a time when you were seeing a revival. Global price of fuel is a concern for all of us and more so for airlines that has not seen a heads up post the pandemic. I will have a word with banks to see what we can do and also look at your suggestion on infrastructure status”, she said.
On bringing ATF under GST, Sitharaman said that she will put this issue on the table of the GST Council at the next meeting.
Suman Sinha, Senior Vice President, Assocham and Chairman and CEO of ReNEW Power said that although there are now PLI schemes for green hydrogen and battery storage, these will take three or four years before they actually come in. “So until that point, our recommendation is to keep Basic customs duty and GST down for those areas”, Sinha said.
Meanwhile, at the FICCI organised post budget meeting, Sitharaman asserted that both government and RBI are watchful of global developments including US Fed taper announcements and would not allow the Indian economy to suffer for want of preparation. “ We have learnt the lessons of the last crisis which government of India faced in 2013-14. We are fairly watchful of what is happening as regards the global strategic developments, as regards Fed decisions and as also regards the global inflationary pressures”, Sitharaman said.