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Industry expects friendly policies, lower taxes, and infra status for hotels from Budget 2020

The Union Government is set to present the Union Budget 2020-21 amidst a slowdown in the Global economy. Despite all efforts and favorable policies, the foreign tourist arrivals during January – November 2019 is 3.2 per cent which is less that Global average. This is, perhaps, after many years that India’s tourism growth is lower than the global average. Tourism and hospitality industry has witnessed many challenges last year resulting into a reduced pace of growth. To witness a solid growth in 2020, the industry has various expectations from the Union Budget as Tourism has been previously mentioned several times as a major focus area. T3 brings to you the expectations shared by the industry:

Rajesh Magow, Co-Founder and CEO-India, MakeMyTrip said, “Tourism, which comes under the service sector in India, is a money spinner. It offers immense work opportunities, and the backward linkages and multiplier effects extend to manufacturing industries and even agriculture. So the impact that Travel & Tourism growth can have on economy is immense. To give a fillip to tourism within India – there needs to be budgeted funds for developing top tourist destinations. Much as infrastructure-related work may fall under state government’s purview, we should pick 20 key destinations that we want to put on global tourism map and bring them under a national program/body to promote Tourism. The budget for this national tourism program/body should be carved out from the Union Budget in order to make requisite investments to improve infrastructure. The government should consider giving export industry status to Tourism Industry.” 

He further added, “Tourism is one of the highest export earners in terms of Foreign Exchange which stood at around 29 USD Billion in 2018. Additionally, the government should consider incentivising travel within Indian. With outbound travel figures over 25 million, MICE and Weddings are moving out of India. To tap this segment, we need to motivate people to travel and explore more of India for events. We have come a long way in linking our cities through world-class airports, excellent highways and a wide network of trains, but last-mile connectivity remains a challenge and there is a lot left to be desired in terms of tourism-specific infrastructure. We need to think of integrated development of the tourism sector to enable competitiveness and sustain long-term growth. The connectivity between tourist sites or development of tourism circuits needs to be taken up on priority so that one can explore places without accessibility blues.”

Nalini Gupta, Head of Costa Cruises India, said “As India has one of the largest coastlines in the world, India’s potential for capitalising and benefitting from the cruise sector is high. Cruise holidays provide one of the best options, for exploring destinations as they are a hassle free, good value for money and an all-inclusive holiday. Further the novelty of cruising still exists in India, as only a very small percentage of Indians have explored this form of holiday.”

“If the government has clear cruise friendly policies and practises, it would encourage the international cruise liners to invest in India benefiting the blue economy of the country. Infrastructural developments at par with international standards will further progress the growth of tourism in India. Successful implementation of these initiatives would generate revenue for locals, employment in country and would also boost foreign and domestic tourism.”

Sunil Gupta, MD & CEO, Avis India said, “I believe that the government should build on its recent push towards sustainability by prioritising the growth of the EV ecosystem. This can be done by promoting the creation of a strong and well-connected charging infrastructure on a pan-India level, promoting the setting up of EV battery capacity in the country and incentivising the adoption of EVs, especially for public transport buses, fleet operator cars and 2 and 3 wheelers. The road connectivity must also be improved between major urban centres and tier-2/3 regions to bolster the growth of the travel and tourism sector.”

Shwetank Singh, Vice President, Development and Asset Management, InterGlobe Hotels said, “One of our major demands as an industry continues to be infrastructure status for hotels with a capital expenditure of INR 50 Crores. Since the GST regime has been established, the cost of construction has gone up by 8-10% as the entire civil structure is treated as an immovable property. We are hoping to get the option to claim input tax credit on GST for this. Also, the industry has struggled with variation in bylaws, approvals and licenses, which is why a nodal body is required. This will help us in terms of having a proper time bound escalation mechanism. With these main areas of standardisation we are expecting a positive Union Budget 2020 which keeps the tourism agenda at the core of economic growth.”

Varun Chadha, CEO, Tirun said, “The government has recognized the potential of cruising as an economic multiplier and is catching up with the world in terms of policies and infrastructure. Cruise Lines are now looking at the government to create a relatable tax regime, which is at par with the rest of the world.”

Anil Kumar Prasanna, CEO, AxisRooms said, “For Hospitality Industry there has been a great relief from GST which is still higher compared to the tourism economy countries, but it is still a breather from some cuts provided. B2B business are struggling on GST payments, as most money has to be paid from 20 days of invoice, though some enterprise customers have delayed payment cycles from minimum 30 days extending to 180 days. Hence, technically lot of business are funding through their personal savings, loans to pay the GST and awaiting their invoices to be cleared by customers. It would be great help if this can be deducted more like income tax from the payees especially in B2B segment, where delayed payment cycles are seen, this would ease the cash flow to the economy or some liability policy for the delay in invoice payments for merchants selling services or goods would be a great leverage for the economy. For Travel & Hospitality Industry, we need to take some cue from Thailand as their currency is the most robust compared to all Asian currency for 2019 due to the policy worked upon many years to bring in revenue from tourism and hospitality sector, in fact it appreciated their local currency by 6% against the USD.”

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