Himachal hotels association seeks PM's help for tourism sector revival after monsoon losses

Shimla, Sep 26 (PTI) The Federation of Himachal Hotels and Restaurant Association has sought the immediate intervention of Prime Minister Narendra Modi to strictly enforce RBI/MSME restructuring frameworks, halt SARFAESI actions, and ensure the sustainable revival of the tourism and hospitality ecosystem.

The association requested the prime minister for interest subvention and a temporary moratorium on principal and interest payments for nine months, given the complete suspension of hotel units during the ongoing monsoon season, which has wreaked havoc in the state.

In a four-page letter addressed to the prime minister, the association also urged for flexible restructuring timelines, long-term hotel loans for 20 years, the reversal of excess interest and penal charges, and a restriction on asset downgrades without tangible collateral.

Himachal received 41 per cent excess rainfall from June 20 to September 25, and the state suffered losses of Rs 4,861 crore. The state witnessed 47 cloudbursts, 98 flash floods, and 148 major landslides and rain-related incidents, which have so far claimed 262 lives. The losses to the state were about Rs 10,000 crore in 2023, when over 550 people were killed during the monsoon season.

The association requested Modi to direct the Ministry of Finance, Reserve Bank of India, Ministry of Tourism, and the state Industries Department to strictly enforce RBI and Micro, Small, and Medium Enterprises (MSME) restructuring frameworks, halt SARFAESI actions, and ensure the sustainable revival of the tourism and hospitality ecosystem.

Under the SARFAESI Act, 2002, banks or financial institutions have the power to seize the property of a defaulting borrower classified as a Non-Performing Asset (NPA) and can also issue notices to the defaulting borrowers to discharge their liabilities within a 60-day period.

The tourism sector in Himachal Pradesh has suffered repeated and compounding setbacks over recent years due to natural disasters, economic disruptions, and regulatory lapses, and the hospitality sector is facing grave financial distress, FOHHRA president Gajender Thakur told PTI on Friday.

Himachal is a tourism-based economy, and a large number of people are connected with tourism, including hoteliers, transporters, shopkeepers, travel agents, guides, taxi drivers, photographers, and local vendors. Many small and medium operators have already shuttered, while others are struggling for survival, having taken loans for their businesses, he added.

The letter said that banks are charging interest rates as high as 15 per cent, which are unaffordable, and despite being registered MSMEs, borrowers are being subjected to SARFAESI proceedings, violating the spirit and stipulations of RBI's and MSME's restructuring policies.

Many borrowers are being forced to sell personal assets or take high-interest informal loans simply to remain compliant, and the frameworks for relief, which include refunding excess or penal interest, preventing asset downgrading due to restructuring, and providing restructuring through internal committees for loans up to Rs 10 lakh, are not being enforced, said the General Secretary of the association, M.K. Seth. PTI BPL HIG HIG