New Delhi [India], July 23 : Finance Minister Nirmala Sitharaman unveiled the Union Budget for the fiscal year 2024-25 on Tuesday.
While the budget has been noted for its focus on infrastructure development, employment generation, and support for spiritual and cultural tourism, it has received a mixed reception from the hospitality and tourism sector.
Pradeep Shetty, President of the Federation of Hotel and Restaurant Associations of India (FHRAI), expressed his concerns about the budget's impact on the hospitality industry. Shetty highlighted the sector's high expectations for substantial reforms and support in alignment with the government's vision for a developed India by 2047.
Despite these expectations, he pointed out that the budget did not address some critical demands of the tourism and hospitality sector, such as GST rationalization, the granting of infrastructure status, and essential policy reforms.
"The hospitality sector has been pinning high hopes on the Union Budget for 2024- 25 presented by Smt. Nirmala Sitharaman today, on the backdrop of the Government of India's stated vision of Viksit Bharat by 2047 and the critical role the tourism industry holds in achieving it. However, there is 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 USD 3 trillion economy by 2047," Shetty said.
He added, "Some key demands of tourism & hospitality to revitalize the sector such as GST rationalization, granting of infrastructure status and bringing ease of doing business and policy reforms have not been considered in the budget once again, given the well-accepted multiplier effect of tourism on employment and economy."
Despite these setbacks, Shetty acknowledged some positive aspects of the budget. The government's commitment to infrastructure development, employment and skill development, and religious tourism is seen as beneficial for the sector.
The focus on enhancing spiritual and cultural landmarks, including the Vishnupath temple in Gaya and the Mahabodhi temple in Bodhgaya, is praised for its potential to offer significant economic and social benefits.
Shetty said, "The government's proactive perspective on enhancing tourism, particularly through the development of spiritual and cultural landmarks like the Vishnupath temple in Gaya and Mahabodhi temple in Bodhgaya is a commendable move that promises substantial economic and social benefits."
He added, "Furthermore, the development plans for Rajgir and Nalanda represent a significant investment in promoting India's ancient historical and educational legacy. The government's commitment to supporting tourism in Odisha will not only highlight Odisha's unique attractions but also encourages sustainable practices that preserve the state's ecological balance and cultural heritage."
The emphasis on tourism in Odisha is also highlighted as a step towards showcasing the state's unique attractions and encouraging sustainable practices that preserve its ecological and cultural heritage.
The initiatives aimed at improving youth employment, skill development, and job creation are welcomed, particularly as the hospitality sector grapples with a shortage of skilled workers.
The budget's broader commitment to making India a premier global travel destination through targeted investments and strategic initiatives is seen as a positive move.
The development of spiritual sites and the promotion of cruise and beach tourism are expected to attract both domestic and international tourists.
Rajesh Magow, Co-founder and Group CEO of MakeMyTrip, also shared his perspective on the budget. He commended the government's continued emphasis on infrastructure development, noting that enhanced road infrastructure would support the travel and tourism sector.
He said, "The government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. We also welcome the initiatives to develop iconic spiritual and cultural sites into world class tourist hotspots."
He added, "The decision to reduce the TDS rate on e-commerce operators to 0.1 per cent is a welcome move. Furthermore, the provision of credit for TCS against income tax under 'Income from Salaries' is logical and will provide much desired relief to taxpayers who travel internationally."
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