On February 1 the PM Narendra Modi-led Indian government will present its second interim budget. Union Finance Minister Nirmala Sitharaman, who has presented the budget for the past five years, will seek Parliament’s approval for the government’s expenditure for the first four months of this fiscal year.
Read what three stakeholders from the travel and tourism industry expect from the 2024 Union Budget.
Vikash Jalan, Chair of TravelTech Committee, IAMAI and Chief Business Officer, Paytm Travel
Ahead of the Union Budget 2024, India’s travel industry stands poised for renewed growth. I believe the upcoming budget presents a pivotal opportunity to unlock the sector’s immense potential and contribute meaningfully to India’s economic growth story. In the run-up to the Union Budget 2024, we expect the government to prioritize policies that make travel more accessible, affordable, and stimulate demand. Government has already been very aggressive on infrastructure and regional connectivity growth. A reduction in GST on online travel bookings, coupled with continued investments in infrastructure like UDAN airports, railways, and roads, would be a welcome boost for the industry and connect large underserved markets in Tier 2 cities and beyond.
Madhavan Menon, Executive Chairman, Thomas Cook India Ltd.
The Travel & Tourism sector represents a vital economic driver: With a 5.8 percent contribution to India’s GDP (2022) and the government’s target of achieving $1 trillion by 2047, the sector forms a strong force multiplier – across allied sectors, employment generation and foreign exchange receipts. Our expectations from the Union Budget include key pivots to transform India into a destination of choice:
– Infrastructural Focus: As a key fundamental for the sector, setting up of new airports via private participation must become a priority – thus creating a viable hub & spoke model; also rapid expansion in rail, road and waterways (sea and river cruises). Additionally, infrastructure development for high growth areas like religious circuits and underleveraged hidden gems (Lakshadweep).
Inbound Tourism: revival of the Inbound incentive scheme – but for select destinations.
1. Tax:
– Reduced Income tax levels to provide increased disposable income in the hands of the people – a boost for travel & tourism spends
– LTA exemption annually, against twice in 4 years to catalyse domestic tourism
– Standardisation of TCS at 5% on foreign travel packages (against the current 5% and 20% slabs).
– Clarity wrt TCS on Forex card payments
2. GST is a key area and our wish list for Budget 2024-25 includes:
– Allow GST input credit facility for inbound and domestic tourism
– Centralise similar issues faced by a single assessee in multiple states – reducing unwarranted time, efforts and litigations in multiple jurisdictions
– Simplify the compliance mechanism in filing reports, reconciliations, audits
Zubin Saxena, Senior Vice President and Country Head, India – Hilton
We hope to see policies that can drive strong growth in the hospitality sector.
A pivotal requirement is a tax overhaul, specifically a significant reduction in the GST rate for hotels from the existing regime. This isn’t just about conforming to global standards; it’s about positioning ourselves ahead of rivals like Thailand and Singapore, making our country more appealing to tourists. Simultaneously, there’s a firm expectation for an industry wide infrastructure status for the hospitality sector. Tourism, development, and economic growth go hand in hand and our country has several gems of places which once developed, will see exponential growth with the employment boost and socio-economic development. This move brings tangible benefits such as lower utility tariffs, reduced property tax, improved financial access, and a more favourable business environment.
We also look forward to ease of doing business, providing developers within the sector with economic incentives & subsidies geared towards the sectoral growth. India’s hospitality sector when compared to the major lodging markets presents a huge opportunity. Also, being amongst the largest employment generators, the sector will be a key pillar to drive sustainable economic growth across the country. It’s imperative that the government strengthen these strides with clear and decisive policy announcements. These measures will be both desirable and essential for ensuring unwavering and dynamic growth in the industry. While acknowledging commendable initiatives like “Dekho Apna Desh and Visit India Year 2023 coupled with the very successful G20 Summit India hosted last year which in a manner was emblematic of our potential and aspirations, we look forward to the promise 2024 unfolds for all of us.