Govt sets up Rs 50 billion fund for COVID-19 affected tourism industry and SMEs

Published On: May 29, 2020 09:32 AM NPT By: Muna Sunuwar


KATHMANDU, May 28: The government has set up a Rs 50 billion fund for the COVID-19 affected tourism industry and small and medium enterprises (SMEs).

Presenting the Rs 1.474 trillion budget for fiscal year 2020/21 on Thursday, Finance Minister Yubaraj Khatiwada said the fund will be set up for the sectors to provide loans at five percent interest rate for both operation of industries and payment of salaries to the workers. Nepal Rastra Bank will operate the fund in which amount will be sourced from government-owned public enterprises and development partners.

Minister for Culture, Tourism and Civil Aviation Yogesh Bhattarai said that the budget is focused on protecting Nepalis from the COVID-19 pandemic. “The tourism industry has been hit the hardest by COVID-19 and this budget has provided tourism entrepreneurs an exemption on taxes and lower loan interest rate,” he said, “It has also managed to set up a fund for job retention of people involved in the tourism industry.”

 As a hard hit industry, tourism entrepreneurs had been seeking a bailout from the crisis from the government. Nepal Tourism Board (NTB) recently recommended to the government to set up a fund of Rs 20 billion for job retention for the survival of the industry. “The government has tried to suffice the tourism industry by taking our recommendations into consideration,” said Dhananjay Regmi, CEO at NTB.

With the halt in the inflow of tourists into the country because of COVID-19 pandemic, there has been a negative impact on the tourism industry. In response to which, the government has managed facilitation on interest and tax rate for tourism, aviation hotel, travel, restaurant, trekking and mountaineering sectors to revive them. “As soon as the risk of COVID-19 pandemic subsides, efforts to revive the tourism sector necessary infrastructures will be developed to expand mountain, water, cultural, entertainment, sports and other new tourism services,” Khatiwada said, adding that domestic tourism will be promoted to revive the stalled tourism sector. “As soon as the risk of COVID-19 comes under control, civil servants, staffers of organizations and the private sector will be encouraged to visit the country,” he further added.

The government has decided to include ‘Tourism’ as a subject in the courses after secondary level. It is also continuing the development of tourist destinations like Pashupati, Janakpur and Muktinath and other places.

However, tourism entrepreneurs are not satisfied with the programs for the tourism sector for FY 2020/21. “The budget the government has presented this fiscal year is not exciting for the tourism industry,” Shreejana Rana, president at Hotel Association Nepal told Republica Online, “There is an immediate crisis in the tourism sector but instead of addressing them the government has introduced programs for the long run. The concern is surviving the tourism industry at present and the government should have prioritized that.”

Meanwhile, the government has slashed the budget for the tourism sector by 85 percent to Rs 1.26 billion for the upcoming fiscal year. The budget is Rs 2.68 billion in the current FY 2019/20. The government has allocated the amount for the development and promotion of tourism infrastructures to attract tourists to the destinations. Under the concept of ‘one province one tourist destination’, huge tourist infrastructure will be developed.

The tourism industry employs at least 273,000 people. Experts say, with the uncertainty created by the pandemic, the fund set by the government can be enough for six months to a year. 

 


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