India’s new budget for Travel & Tourism: The other viewpoint

As in the past, has the India budget once again eluded opportunity for the crucial hospitality sector this year? This is how Rajendera Kumar, industry veteran and past president of the hotel federation, as well as Director of The Ambassador New Delhi, summed up the general reaction to the budget presented by Nirmala Sitaraman, the second woman to present such a document since 1970 when Indira Gandhi did so.

Pronab Sarkar, President of the Indian Association of Tour Operators (IATO), said that there was no focus on tourism in the budget but infrastructure funding will help its development. Sarkar said that the industry has long been awaiting GST simplification.

Thomas Cook India CMD M. Menon felt that focus on MRO and UDAN will help tourism. Other top Thomas Cook officials pointed out that spending on railways and roads would also help. Yogesh Mudras, Managing Director of UBM, felt that FDI in aviation and stress on urban and rural connectivity were positive steps.

In a previous article, however, Rakshit Desai, Managing Director, FCM Travel Solutions, Indian Subsidiary of Flight Centre Travel Group, said the budget had quite a few takeaways for the tourism industry.

Here is more of what Pronab Sarkar had to say:

“There is no focus on Tourism in Union Budget 2019-20 except  that the Government has re-emphasized on 17 iconic sites being developed into model world-class tourist destinations, which has been taken forward from the last year budget.

“However, we welcome about the mentioning of simplifying of [the] GST process and absorbing of charges on digital transactions, which will encourage digital transactions. We are looking forward to the simplified procedure for GST.

“We also welcome the government plans to restructure the national highways program to create [a] network of highways for better connectivity, upgradation of 125,000 km of roads in [the] next 5 years at a cost of 802.5 billion rupee, more focus on Swachh Bharat mission, and expansion of Railway suburban networks which will boost tourism as with increased infrastructure, better road connectivity, and [a] clean India [that] foreign tourists will be attracted [to].

“We have been requesting the Government for rationalizing of GST on tourism and hospitality,  exemption of GST on foreign exchange earnings by the tour operators, and treating tourism industry as deemed exporters and extending all benefits to the tourism industry as are being given to physical exports of goods and reduction, in Tourists Visa Fee so that we can compete with our neighbouring countries on foreign tourists arrivals, which will not only help bring in more foreign exchange but also create new jobs.

“However, this all remains pending and we hope our requests will be considered by the GST Council and [the] Finance Ministry will consider the importance of [the] tourism industry in employment generation and contribution in economic growth of the country.”