Budget 2022: Hospitality Sector in the midst of the Pandemic
World over the hospitality sector has seen the maximum impact of the pandemic with strict social distancing norms imposed and limited movement allowed between countries in particular. This is also the sector that couldn’t make use of digital services like the other sectors of any economy.
While the large hospitality chains have faced losses as well, they are better positioned to absorb losses and bounce back, just like large firms in any industry. The small and medium hospitality players have been particularly affected and have limited opportunities or resources to bounce back. Against this backdrop, hospitality services by the small & medium sector are yet to bounce back, and therefore, the government has decided to extend the ECGL service for this sector by March 2023 with an increased cover.
This comes as a relief to the hospitality industry. This announcement also comes at the right time in the sense that the health consequences of the pandemic are expected to minimize from this point on and pent-up demand in the economy is set to be realized.
The focus on the MSME portion of the industry also brings support to the larger MSME sector in the country that has been considered the backbone of the economy. The scheme will benefit not just established players but also startups that may have come up right before the onset of the pandemic. Hospitality, which has been a promising industry in India, is now set to contribute to the growth targets of the country despite the pandemic-induced disruptions.