Collapsing Amusement Industry Makes Clarion call for Survival, Seeks Urgent Stimulus Package to escape COVID-19 onslaught

NEW DELHI: Indian Association of Amusement Parks and Industries (IAAPI), an apex body representing Amusement Parks, Theme Parks, Water Parks and Indoor Amusement Centre across India,  has urged Indian government for an urgent stimulus package for Amusement Industry to sail out from the COVID-19 impact.

In representation, the IAAPI has sought sops like complete GST holiday for 12 months, deferment of fiscal statutory compliance deadlines, waiver of customs duties on import of spare parts, reduction of effective rate of interest on loans from FIs, a moratorium of 12 months on payments to FI, fiscal support for salaries on the lines of MNREGA, concessional pricing for water and electricity and a lower rate of income tax and early settlement of income tax refunds.

Ajay Sarin, Chairman – Indian Association of Amusement Parks and Industries (IAAPI), said, “As a responsible industry, we understand, respect and support the decision of the Government and the Local bodies in curtailing the spread of COVID -19 and all amusement parks have been closed. Thus, in view of the same, conducting business in such an environment has become a major concern and industry is now struggling for its survival.”

“After lockdown, the amusement industry will be further impacted since families will avoid going to a crowded place and travel will be restricted as our industry attracts kids, youth, and family in large numbers.  The industry has lost its biggest peak season which will be followed by offseason of another six months,” added Sarin.

In its representation, the IAAPI stated that the amusement industry is generating approx. 80,000 direct employment and contributes to the government exchequer significantly. The amusement industry forms a major part of social Infrastructure which plays a vital role in nation-building as it offers active outdoor recreation for kids, youth and families from middle and lower-middle-class strata of the society.

As per the advisory issued by Heeralal Samariya, Secretary – Ministry of Labour & Employment, Government of India, IAAPI has requested all its members not to terminate employees and to pay the wages and salaries of permanent and contractual labours without any deductions for the month of March and will continue to do so till the lockdown period.

The amusement industry plays a major role in creating employment both directly and through ancillary and other related industries like hospitality, food & beverage, transport industry and more. It helps to create an economic multiplier effect accelerating the growth of the economy. The amusement industry is in dire straits due to the COVID-19 outbreak.

As a consequence, the amusement industry is looking at pan India financial distress and bankruptcies, closure of businesses and massive job losses.

Amusement Industry is highly capital intensive, seasonal as it operates mainly from mid-March – July due to climatic reasons, high operational & manpower costs considering the safety and security of visitors. For the rest of the months, the capacity of the amusement & theme park is left unutilized, making the operational costs overrun the revenues.  The industry envisages normalcy after about 5-6 months for the patrons to regain trust and confidence and start flocking the amusement parks.

According to IAAPI the amusement park industry is on the verge of collapse and seeks an instant emergency decision to rescue and sail the entire amusement industry from the prevailing turbulent environment.

The only way this can happen is by reducing fixed operating expenses significantly in the immediate term till consumption in the sector bounces back and the economic activity revives.   With almost no revenues, due to suspension of operations as a consequence of the pandemic, amusement park industry is running out of working capital and is finding it difficult to meet its financial obligations such as staff salaries, advance tax, GST, PF, ESI, and other state levies, loan interest and installment payments, etc.

Salient points in the IAAPI representation to the Government:

• Complete GST Holiday for 12 months:  To make the entry prices economical to attract the patrons, complete holiday for 12 months (Central and State level) is sought for, also as with almost no revenues, there is hardly going to be any GST, as the revival of business may take time.
• Deferment of Fiscal Statutory Compliance Deadlines: Deferment for 6 months in payment of direct or indirect taxes of all statutory dues like advance payment of taxes, PF, ESIC etc. at the central government level or state government level.
• Waiver of Customs Duties on Import of Spare Parts: Waiver on custom duties on import of spare parts to bring down the repair and maintenance cost.
• Reduction of Effective Rate of Interest on Loans from Financial Institutions: Reduction by 200 basis points in effective interest rate being charged by financial institutions on term loans, working facilities and other facilities with immediate full transmission for working capital to reduce the burden on cash outflows.
• A Moratorium of 12 months on Payments to Financial Institutions: 12 months moratorium on installments of principal and interest payments on loans and working capital from financial institutions besides a doubling of working capital limits on interest-free and collateral-free terms.
• Fiscal Support for Salaries: Support fund for 12 months on the lines of MNREGA to support basic salaries with direct transfers to affected amusement industry employees.
• Concessional Pricing for Water and Electricity: Provision of water and electricity to the amusement industry for 6 months on concessional and subsidised rates.
• Lower Rate of Income Tax and Early Settlement of Income-tax Refunds: To enhance the cash inflows and reduce the cash outflows to support.
• In order to take care of the financial burden, requesting Employee State Insurance Corporation to pay the entire wages of the employees of those units that are covered under ESI for the period our country is under lockdown. As COVID-19 has caused a medical disaster ESI is very well justified in meeting this commitment of employees.