Kerala announces financial package worth Rs 455 crore, to get tourism industry back on track

Kerala Tourism has announced a Rs 455 crore loan scheme to support the sector which has been decimated by the COVID-19 pandemic, in a move that’s bound to bring substantial relief to the industry.

The scheme known as the Chief Minister’s Special Tourism Loan Fund will benefit both entrepreneurs and employees of the sector who are struggling to keep themselves afloat.

As per the scheme announced by Tourism Minister Kadakampally Surendran, 2,500 large scale entrepreneurs in the sector can avail working capital loans from Rs 5 lakh to Rs 25 lakh. Besides that,  2,500 small scale tourism entrepreneurs can avail loans amounting to Rs 1-3 lakhs. This will result in a loan expenditure of Rs 355 crore. The loans are being arranged by SLDC through various banks.

Employees can seek Rs 20,000 to Rs 30,000 as a soft loan from Kerala Bank, for which Rs 100 crore has been set aside. These loans will be provided at an interest rate of 9%, however, 6% of that will be paid by the tourism department on behalf of the employees. These loans will be provided under the banner of the Tourism Employment Scheme.

There is no requirement to repay the loan for the first six months, said the minister. The loan can be repaid in 42 months.

Significantly, the tourism department will offer 50% subsidy for the first year of the loan term. Financial commitment of the government under this scheme for 50% interest subvention for one year is approximately Rs 15 crore.

The state government’s package is sure to help the hospitality sector to restart business and win back jobs for the employees. About 15 lakh people are employed in Kerala’s tourism industry, which registered revenues of Rs 45,000 crore last year.