Submitted By: Ankit 

Budget 2021 evokes mixed reactions from the tourism and hospitality sector stakeholders.  To feel the pulse of the industry, Mice Affairs Media interacted with industry leaders to get first-hand views and reactions on Budget 2021. Here is the summary:

“Against the challenging backdrop of the COVID era, the Union Budget 2021-22 is an expansionist budget: We welcome the much needed investments in healthcare, focus on capital expenditure, prioritisation of assets, privatisation, and no change in taxation – structured around a clear pivot to inspire economic growth.

While the six pillars of the Budget presented a diversified approach to fundamentals, across health, capital, infrastructure, inclusive development, human capital and innovation, focus on the Travel and The tourism sector has been noticeably absent.

 

For an industry that is a crucial contributor to India’s GDP and a powerful force multiplier, priority tourism related announcements – an imperative to revival and sustenance - were clearly missed. We are looking at a long road to recovery and the Union Budget has not provided the helping hand that was expected of it.

 

We welcome the focus on transportation infrastructure that forms a crucial base for Inbound & Domestic Tourism -  with the announcement of a Rs.1.18 lakh crore outlay for the Ministry of Road Transport and Highways (proposed 3500 km corridor in Tamil Nadu, 1,100 km in Kerala, 675 km in West Bengal and 1300 km in Assam in the coming 3 years); equally the proposal of a future-ready rail system by 2030 and the next phases of metro projects in key cities with the 'Metro Lite' & 'Metro New' concepts for tier 1 & 2 regions. From an aviation perspective the announcement of airport privatisation in tier 2 and 3 cities/towns will serve as a boon towards access and affordability; the creation of a hub & spoke model will serve to catalyze the governments' initiatives around Project UDAN and Regional Connectivity.”

 Jyoti Mayal, President TAAI

Jyoti Mayal, President TAAI, stated that we expected much more than what was announced. However, we believe the Budget 2021 has focused more on spendings to enable economic growth through infrastructure roads and financial remedies. Travel, tourism, and hospitality were completely neglected.

As we await the fine print, the direct taxes are not clear.

Further Dis-investment in AirIndia is still on the rocks and is expected to be completed this year. Clarity on the same is eagerly awaited by us, the main stakeholder partner hereto.

For Rail packages over the years this shall be an advantage since the Plan is to create a ‘future-ready’ Railway system by 2030. Passenger Logistics shall have an advantage in the circuits and infrastructure.

In Tourism we shall be able to attract foreign tourist and give more opportunities to travelers viz a viz:

For Passenger convenience and safety the following measures are proposed:

Introducing the aesthetically designed Vista Dome LHB coach on tourist routes to give a better travel experience to passengers.

The safety measures undertaken in the past few years have borne results. To further strengthen this effort, high-density network and highly utilized network routes of Indian railways will be provided with an indigenously developed automatic train protection system that eliminates train collision due to human error.

Further, TAAI had requested an extension of LTC for a period of 2 years: She has proposed: “In order to provide relief to employees, it is proposed to provide tax exemption to the amount given to an employee in lieu of LTC subject to incurring of specified expenditure.”, stated Jyoti Mayal.

Vishal Suri, Managing Director, SOTC Travel 

Union Budget 2021 focused on infrastructure, agriculture, healthcare, education and industrial sectors. While the Union Budget 2021 did not directly address several of the demands being made by the travel and tourism industry, it addressed a relatable need that acts as a medium for growth of the infrastructure sector. More economic corridors are being planned to boost road infrastructure with an allocation of 1.18 Lakh Crore. The government has set an ambitious target of building infrastructure in the country with a special scheme to nudge states to spend more of their budget on infrastructure, providing Rs 1.10 Lakh Crore for railways, privatizing of airports and Indian railways national rail plan for India to prepare a future-ready railway system by 2030. These contribute towards sustainable growth within the tourism sector. With airports to be privatized in tier 2 and 3 cities, it will improve regional connectivity. Addressing concerns like immediate waiver/rationalization of 5% TCS for outbound tourism, rationalization of taxes will create the necessary boost for the tourism segment. 

Mr. Roop Partap Choudhary, MD, Noor Mahal

"Although the budget has not offered any major relief to the struggling travel and tourism industry, providing Rs 1.15 lk cr for Railways and privatizing airports, the government has given some aid to domestic tourism. A special impetus to local infrastructure development will definitely encourage domestic hospitality, travel and tourism. The development of road networks across the country gives regional and stand-alone players, at locations considered off the main grid, a fair chance to compete with the main-stream hospitality circuits. Other infrastructure developments in Tier-II cities would assist the growth potential of regional hospitality players and possibly flip the whole scenario in near future.

The industry largely expected a more liberal and reasonable investment and loan framework from the union budget. A more flexible and tolerant financial environment could have supported small hospitality players to explore more growth avenues in these tough times. To encourage guest occupancy, boost domestic travel and help small/independent properties to be more competitive in the market, GST on room bookings should also be reduced from 18% to 10% as government efforts to support the industry on its path to recovery."

Jay Bhatia, Vice President TAAI

Jay Bhatia, Vice President TAAI stated Private Public participation has been set forth in a big way along with privatization. We hope this shall include in the Travel and Tourism trade too. We see that the revenue shall come from borrowings only.

We had proposed single employee benefits/security under one provision which shall care for labor welfare, social security, health, safety family, etc. We are happy to note prima facie that with the implementation of the 4 labor codes. For the first time globally, social security benefits will extend to gig and platform workers. Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation. Women will be allowed to work in all categories and also in the night-shifts with adequate protection. At the same time, the compliance burden on employers will be reduced with a single registration and licensing, and online returns. This shall assist members of our trade.

It is inappropriate on the part of Finance Minister to completely ignore Travel, Tourism, and Hospitality business in its focus during the Budget.

www.miceaffairs.com

Global MICE Media Network

Register Now for Singapore MICE Virtual Show

Click here to Register javascript:nicTemp();