Budget 2023: Tourism and hospitality seek infra status and others

India’s travel and hospitality sector, one of the hardest hit by the Covid-19 restrictions, is still looking for that helping hand to help it out of the quagmire it has slipped into since the pandemic. Will the Union Budget on February 1 have the antidote to misery?

The sector, ranging from travel agents to hotels and restaurants to airlines and transport services, has borne the brunt of the lockdown and the ongoing fear of multiple waves of Covid. Despite job losses running into the hundreds of crores and several small businesses going bankrupt, the government’s multiple tranches of relief measures have left the sector almost completely out in the cold – barring a lifeline of easy loans through the Emergency Credit Line Guarantee Scheme (ECLGS ).

“India’s travel and tourism industry has shown great resilience and recovered from the brunt of the pandemic. At this crucial juncture, the industry needs support from the government to ensure it continues to be one of the largest employers in the country,” said Rajesh Magow, Co-Founder and CEO, MakeMyTrip.

One of the industry’s long-standing demands is to be treated as an infrastructure industry sector, something stakeholders feel should be done at least now, given that the government has not done much to help it through the tough times of the pandemic.

“Infrastructure status for the hospitality sector has been a long-standing demand and continues to be so. Given the pain the hospitality industry has gone through in the last few months due to Covid, there is no better time for this implementation,” said Tejus Jose, General Manager of Hilton Bangalore Embassy Golflinks in Bengaluru.

MakeMyTrip’s Magow explained, “Accommodating this long-awaited request will help ease access to institutional credit; will enhance the competitiveness of India’s tourism sector in the international arena and create a long-term path for sustainable growth of the sector.”

“We are particularly looking for proposals that speak specifically to the short-term and long-term revival of the Indian travel industry,” said Prahlad Krishnamurthy, Chief Business Officer, Cleartrip.

Tax rationalization is another pain point that the sector hopes will resonate with the finance minister. This ranges from differences in taxes between India-based travel companies and start-ups, as well as a higher GST rate for bookings through an online platform. Specifically, hotels want GST rationalization on room bookings.

Another demand is that the foreign exchange received through foreign tourists should be treated as export earnings.

With the dark days of the pandemic seemingly behind and domestic travel on the rise, the travel and hospitality sector believes the next one to two years will be critical in how Indian tourism evolves – with international tourist arrivals just beginning. Then the right measures in this year’s Union Budget would make all the difference.

In this context, this “question” from the leading organization of tourism and hospitality in the country does not sound too high. “A National Committee on Tourism, empowered as GST, headed by the Prime Minister and comprising all CMs (with powers) should be set up with all incentives and concrete time-bound action plans for tourism,” said Ashish Gupta, Chief Advisory Officer , Federation of Indian Tourism and Hospitality Associations (FAITH).

“If you take pure tourism (exclude NRI visits), India has less than 1% of the global tourism market. India has the potential to attract more than 5 percent of the global market — geography, culture, arts, etc. They need to be further defined to give us that global edge,” he added.

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