INDIA: Tourism Minister For Extending Loan Repayment Schedule For Hotels

The Tourism Ministry today pitched for extension of loan repayment schedule to help hotels tide over the current cash crunch.

Citing Leela Hotels as an example, Tourism Secretary Lalit K Panwar said the company is facing financial problems and deserves to be supported to help it come out of the crunch.

"Most of the entrepreneurs in tourism are feeling the cash crunch, the repayment schedule for the investment and for the long (term) bond is too steep, a classical case is Leela Hotel for example. They are having lot of problem because of this very tight repayment schedule...

"I had three rounds of discussions with Secretary - Finance and Revenue. We have said that why are you not supporting. They (Leela Hotel) just want (more time for loan repayment)," he said here at a Ficci function here.

Panwar said it is a "reasonable and genuine demand" from them for extension of loan repayment period to about 15 years instead of eight years.

"Why we are not able to agree. He is not a defaulter after all... he is Leela. So we are supporting. I quoted Leela because this is a classic case. Leela is a very good brand of our hospitality industry and they are suffering only because of myopic lending policies," he said.

The Finance Ministry should "ask the bankers just to enhance the repayment schedule, that's all. Just one single measure can give comfort to our investors. We are working on that".

The Secretary also asked the industry to take the loan repayment schedule issues with the government.

"I will also ask people from tourism fraternity to create pressure in their own way," he said, adding "we have asked the Finance Ministry to look at the issue. Lending rates and schedule should be pragmatic," he said.

For the fiscal ended March, 2015, hotel Leelaventure registered a consolidated net loss of Rs 415.84 crore. It had reported a net loss of Rs 441.50 crore in previous financial year.

Further, he said that during the last fourteen months, the Prime Minister has visited 25 countries and has mentioned about tourism over 100 times.

"Whatever Prime Minister says, he follows it up with real actions. And the biggest example of this was declaring China eligible for e-tourist visa.

"There was some resistance from various quarters giving that status to China but the Prime Minister announced it in China," he added.