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Wednesday, November 29, 2023

Union Budget 2020 – What’s In It For Travel and Tourism Sector


Travel and Tourism is the third-largest contributor to the country’s GDP, contributing nearly 10% of the total GDP of India. Being one of the largest employment creating sectors in the country, the Travel, and Tourism sector has been long anticipating some major reforms in government policies to bring a much-awaited boost and trigger growth trends. With high expectations for relaxation of GST policies, development of overall tourism infrastructure and various other sector-specific policy reforms and most importantly within the Aviation and Hospitality sector.

Mr. Amitabh Kant, Chief Executive officer NITI Ayog recently suggested the need of having a National Tourism Policy for the development of the sector. With India looking, at becoming the third-largest travel economy in the world, Union Budget 2020, was released on February 1st, 2020, by Finance Minister Nirmala Sitharaman.

ALSO READ : India Needs a National Tourism Policy: CII

Here are the Key Highlights from the budget for Travel and Tourism Sector.

  • Development of on-site museums at the following five archaeological sites in the country.
    • Rakhigarhi in Haryana,
    • Hastinapur in Uttar Pradesh,
    • Sivasagar in Assam,
    • Dholavira in Gujarat and
    • Adichanallur in Tamil Nadu
  • Proposed setting up of tribal museum in Ranchi
  • Proposal to set up an Indian Institute of Heritage and Conservation 
  • Allocation of Rs 2,500 crore to the Ministry of Tourism and Rs 3,150 crore for the Ministry of Culture for the year 2020-2021.
  • Proposal to set up 100 additional airports by 2024under the UDAN scheme
  • Introduction of more Tejas – type trains to improve connectivity at the tourist destinations
  • Overall allocation of 1.7 Lakh Crore for transport Infrastructure in 2020-2021

Speaking about Union Budget 2020 to Travel Newsy, Ms. Nidhi Mondal, AVP- Hotel & Holiday, Via.com, Says :

Time is changing, ideal holiday or event definitions have transformed with time. It’s no more 7 am pickup for a tour that fascinates masses on their holiday, events are all about themes and innovations rather than food taste and backdrops. 

It’s time to transform and bring new travel products to this market. Tour Operators to focus on next-generation products like Self-drive cars, Car Rentals, Home rentals, Villas.

The online Travel industry needs a boost in Tier 2, 3 cities. Quality tourism must reach cities like Odisha, Raipur, Aurangabad, etc.”

What is Good: Grants to states for specified tourism initiatives, development of heritage sites and museums are welcome steps. 

The Union Budget has seen encouraging focus to the Travel & Tourism sector with the allocation of INR2500 Cr, equally critical allocation of Rs 1.7 lakh crore towards transportation infrastructure in 2020-21.

Setting up of 100 additional airports by 2024 and doubling of aircraft as part of the unique Udaan scheme to further boost domestic connectivity.

2000 kms of strategic highways and Tejas equivalent trains to connect iconic tourist destinations. 

What Could be Better: Apart from Domestic boosts there is a big market for international travel. 2019 has seen shut down of a big Outbound connectivity contributor carrier. The huge vacuum of the new carrier remains to cover sectors like Bali, Thailand, Australia, New Zealand, Korea, Japan.

Mr. Madhavan Menon, Chairman & Managing Director, Thomas Cook (India) Ltd. says

 “A far-reaching and long term initiative that I truly welcome is the Finance Minister’s announcement that an Indian Institute of Heritage and Conservation will be set up with the status of a deemed university, and this is an imperative towards education and skill development of our sector that contributes a significant 10% to India’s GDP; additionally playing a critical force-multiplier role in job creation-accounting for 26.7 million jobs in 2018 and expected to provide employment to nearly 53 million people, directly and indirectly by 2029.

Even as the Industry Leaders rejoice the giveaways from the budget and see this year’s budget, bringing a positive growth for the tourism Industry, Full potential of the Travel and Tourism Sector will be seen only with the growth of individual segments of the industry.

Individual sectors especially aviation and hospitality still need some Major policy reforms to be sustainable and profitable.

Also Read: Hospitality Sector is Losing Even as India Jumps to 63rd Position in Ease of Doing Business

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