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Thursday, October 5, 2023

Union Budget 2021 Disappoints The Tourism Industry


New Delhi: Much anticipated Union budget 2021 was tabled in the parliament today, included several tax-related schemes, budget for health and infrastructure projects etc. to boost the economic growth in the country.

As good as it sounds, the budget ended up missing the expectations of the tourism industry. Here is what some Industry Leaders have to say.

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

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 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 an 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 catalyse the government’s initiatives around Project UDAN and Regional Connectivity.”

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/rationalisation of 5% TCS for outbound tourism, rationalisation of taxes will create the necessary boost for the tourism segment.

Jyoti Mayal, President TAAI, 

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.

Further Dis-investment in AirIndia is still on the rocks and is expected to be completed this year. Clarity on the same is eagerly is 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 for foreign tourist and give more opportunities to travellers viz a viz:

For Passenger convenience and safety the following measures are proposed:

We will introduce 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.

She Further adds, 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 LTCsubject to incurring of specified expenditure”

Jay Bhatia, Vice President TAAI:

Private Public participation has be set forth in a big way along with privaisation. We hope this shall include in 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 labour welfare, social security, health, safety family etc. We are happy to note prima facie that with the implementation of the 4 labour 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 Finance Minister to completely ignore Travel, Tourism and Hospitality business in its focus during the Budget.

Subhash Goyal, Honorary General Secretary-FAITH and President Confederation of Tourism Professionals, Has the following analysis of the budget.

“1. This was the great opportunity for the Government to revive the Tourism Industry and save at least 30-40 million jobs which are on the verge of extinction out of 75 million people who are directly and indirectly employed in this industry.

2. Not just Tourism, there is no mentioned of the services sector which is the largest employment generator, in this Budget.

3. There are a few good things which may indirectly help the Tourism Industry like more Tourist Coaches and Trains in the Railways.  Privatization on PP basis of Sea Ports may help Cruise Tourism and 35,000 crores on Vaccine and increasing medical infrastructure etc. may indirectly help Medical Tourism.

4. Rs.15,700/- crores on MSME may help indirectly to just a few small operators.

5. Privatization of Air India, we have been hearing for the last so many years, unless there is a deadline this may or may not happen.”

There should be implementation deadlines in all Budgets and the previous Budget points that have been implemented should be read out before presenting the new Budget.

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