by Vijaylakshmi 
The union budget presented by the finance minister today in the parliament was silent on all important demands of the private industry which has inflicted a huge dent on the spirits of the industry. Although hotel industry stakeholders are cautious in their reactions to the union budget 2024-25 presented by the finance minister, Nirmala Sitharaman, the underlying sentiment is of disenchantment. The expectations were quite high this time around as there was a new leadership at the helm of the tourism ministry. Moreover, the chief economic advisor to the government, while analysing the economic survey 2023-24 also indicated the need for a new growth approach—all hands on the table and all approaches on the table—which should be non-exclusionary in nature, to overcome the growth challenges of the global market. The tourism and hospitality sector in the country has been pushing for infrastructure status with industry benefits for a very long time. They feel that full infrastructure status for the hotel sector will boost investments into the sector faster with enhanced access to long term capital at affordable rates. In a country where branded accommodation is in short supply, and with new destinations emerging with connectivity improvements, the industry feels that infrastructure status can trigger investments and thereby help create new employment opportunities, which is another major challenge the government is trying to address. As per the economic survey 2023-24, the country has to create 8 million new jobs per year consistently for the next decade to address the joblessness in the country.Apart from infrastructure status for the hospitality sector, other demands included rationalisation of the taxes to make the tourism products competitive to competing destinations in south and southeast Asia. The industry also wants the government to take proactive steps in overseas marketing of India which got badly impacted after the closure of Indiatourism overseas marketing offices.The union budget presented by the finance minister today in the parliament was silent on all important demands of the private industry which has inflicted a huge dent on the spirits of the industry. Says Aashish Gupta, consulting CEO of FAITH, the confederation of 10 travel and tourism industry associations in India, “While it is encouraging that the FM announced that India has the potential to become a global tourism hub, it would also have been nice to see budget recommendation supporting the same, such as an increase in the marketing and publicity budget, infrastructure status support to hospitality industry, abolishment of TCS on travel and reduction in GST rates on tourism travel and hospitality. The support given to spiritual tourism through corridor development and cruise tourism through tax adjustment on foreign ships in Indian shores will support these sub sectors. There was the potential for this budget to address a lot more opportunities for growth in Indian tourism in a structured manner.”The Hotel Association of India (HAI) president, KB Kachru, expressing similar sentiments also opined that the FM didn’t go beyond just recognising the potential of the tourism sector as an engine for growth and job creation. “No policy changes were evident to expedite investment in the sector,” he reacted, adding, “we expected special incentives like infrastructure status with industry benefits.” As an important industry body, he said that the HAI will continue to push for infrastructure status. “We understand that policy decisions are not part of the budget proposals,” he observed. He also expressed his disappointment for lack of visibility for inbound tourism in the budget. However, Kachru welcomed the proposal for “comprehensive review of GST” which, he felt, would entail both excise and custom duties as well. He also appreciated the proposals to augment skilling of youth and women in the country in the next 5 years.“The hospitality sector has been pinning high hopes on the union budget for 2024- 25 presented by Nirmala Sitharaman today, on the backdrop of the Government of India’s stated vision of Viksit Bharat by 2047 and the critical role tourism industry holds in achieving it. However, there was nothing spectacular in the budget to bring structural changes to address the fundamental challenges it faces in a competitive world order and to accelerate the growth of the sector to be a $ 3 trillion economy by 2047,” says Pradeep Shetty, president, Federation of Hotel & Restaurant Associations of India (FHRAI), national body of hospitality industry.While the industry is disappointed, it is not dejected as the overall focus on infrastructure development, employment generation and skill development and development of religious tourism centres, Shetty added. The focus of Budget 2024 on youth employment, skill development and job creation are welcome initiatives when the hospitality industry is facing a shortage of skilled workforce, he said.
Published On Jul 23, 2024 at 08:51 PM IST
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