THE UNION Budget 2019 presented by the Finance Minister Nirmala Sitharaman has brought in mixed reactions from various industries. Budget 2019 paid major emphasis on the digital economy, start-ups, banking reforms and infrastructure development. For hospitality and tourism, the announcement of developing 17 iconic world-class structures and the plan to make India an aviation manufacturing hub is highly appreciated. However, industry demand of downward revision in GST rates, definitive steps on the input tax credit, boosting travel-related foreign exchange earnings and long-pending requirement industry status continued to be ignored. BW Hotelier brings you opinion d by the industry.
The industry expectations were high but the Union Budget has neglected us completely and we are disappointed yet again. While the Govt. wants to give impetus to hospitality and tourism and our Hon. PM has envisioned big things for the sector, there is no mention except for the 17 tourist-friendly spots which we welcome but will need further details before commenting on it until we know exactly what those spots are. We were expecting reforms in rate slabs of GST, Input Tax Credit and a definitive step to boost the domestic and inbound traffic. Hospitality plays a vital role in the growth of the economy, therefore, this sector cannot be ignored. It is one of the biggest contributors to GDP, Taxes, Foreign Exchange and most importantly in generating employment. As per industry reports, total contribution by travel and tourism sector to India’s GDP is expected to increase from Rs.15.24 trillion (US$ 234.03 billion) in 2017 to Rs.32.05 trillion (US$ 492.21 billion) in 2028. The success of Incredible India lies in managing its hospitality and tourism right and requires policy support. For the programme to be successful, it is paramount that the notion about the hospitality industry being “elitist” be dropped. Overall this is a good budget for the middle and lower class which will help strengthen their income base but there is nothing for the industry.
The proposed initiatives by the government to develop world-class 17 iconic tourism sites will draw the attention from international as well as domestic tourist. These destinations will boost and will improve the investment in the travel and tourism industry especially by the millennials who have the spending power.
The budget also focuses on connectivity in rural and urban places which will boost and help tourism market and provide great potential to grow in the near future. These initiatives will also move the needle for the MICE industry which has been growing exponentially over the years and has scope for record growth. In continuation government to spend Rs 100 lakh crores is a big boost to infrastructure this will also bolster MSMEs sector growth. The opening up for FDI in the sector of aviation is an additional buoyancy for the travel and tourism sector. The overall budget seems good and it will surely enhance and run the economic engine.
The maiden budget of NDA 2.0 clearly seeks to mobilise resources and open up investments through increased FDIs in insurance, aviation and media sectors among others. We are optimistic about the long term roadmap towards addressing liquidity concerns as well as the corporate tax reduction.
The emphasis on rejuvenating the aviation sector through FDI in finance, leasing and MRO, is a much-needed step in the right direction. The tourism sector stands to gain significantly from the modernisation of railways and aggressive budgetary outlays towards infrastructural schemes like Bharatmala, Jalmarg and Sagarmala. The second phase of UDAN will further enhance regional air connectivity between India and Bharat, making travel affordable and accessible across the country. A visionary inclusion from a transportation perspective was the announcement of the inter-operable One Nation-One Card. We see these initiatives bridging the urban-rural divide and also significantly bolstering growth in the sector.
A noteworthy announcement was that of a Digital Repository of tribal heritage with the aim of preserving rich tribal art and culture and promoting it. We also applaud the Government’s plans to develop 17 iconic tourism sites as world-class tourist centres. Showcasing the grandeur of the country among tourists, this will also position the country as a key destination for visual attractions. Clearly, tourism is being viewed as an important growth driver of the economy.
Aditi Balbir, Founder, and CEO, V Resorts
It can be a game-changer for the Indian economy and society in the coming years. We are expecting more schemes and policies for travel and tourism sector. The attention of our honourable Finance Minister, Niramala Sitharaman on policies pertaining to better connectivity to different tourist destinations, enhanced facilities, and experiences for the tourists will certainly help our tourism industry. The focus should also be given to the gap in the skilled workforce which can be fulfilled by starting skill development programs.
The development of 17 iconic tourist sites as world-class tourist centres by the government comes as great news for the hospitality and tourism sector. This will not only attract more tourists but also generate better job opportunities. The budget also laid emphasis on the promotion of the rich tribal heritage of India and its culture. Steps were taken to ensure that it goes beyond our own borders will encourage tribal arts, crafts, and fashion on a global platform. This might put us on the world map and generate revenue for the tribal sections of our society.
The budget breaks away from tradition and nudges the public and policymakers to think outside the brown briefcase. It sets a vision for the next decade for India with an intent to bridge the socio-economic and urban-rural divide. The boost to infrastructure, labour reforms, access to capital and talent for start-ups and MSMEs alike will drive productivity and consumption, which is also good news for the hospitality, travel and tourism industry. The real test of this vision, however, will lie in its realization, which is essential to deliver on the government’s mandate of providing ease of living and ease of doing business. This will be possible only through concerted efforts from all stakeholders.
The Budget overall was quite progressive, policy-driven and should deliver positive results in the long term. However, we are disappointed to see the Tourism Hospitality sectors having been mostly ignored. We are still hopeful that the GST Council will review and bring down GST for hotels from the present 28 percent to at least 18percent.
Sanjeev K Nayar, General Manager, ITC WelcomHeritage
The budget has talked about developing 17 iconic tourism sites, which we are certain will benefit the hospitality sector and all other stakeholders of the travel industry as this will create fresh demand of hotels and other tourist-related infrastructure. We being a Heritage hotel chain are upbeat about this announcement and await complete details.