New Delhi: Finance Minister Nirmala Sitharaman’s maiden budget has evoked mixed reactions from various stakeholders in the tourism industry. For hospitality and tourism, the announcement of developing 17 iconic world-class structures and the plan to make India an aviation manufacturing hub is highly appreciated. However, industry demand of downward revision in GST rates, definitive steps on the input tax credit, boosting travel-related foreign exchange earnings and long-pending requirement industry status continued to be ignored. Destination Reporter presents the reactions from the travel and tourism community:
Nalini Gupta, Head of Costa Cruises, India
“Indian Coastline has immense potential for cruise tourism. The proposed Inland waterways development by the government is a positive step towards boosting coastal tourism in India. The Varanasi – Haldia route will be an opportunity for river cruises to provide inland waterways tourism to domestic and foreign tourists. Additionally, the Government’s plan to enhance 17 iconic tourism sites into world-class tourist destinations will not only increase inbound foreign tourists and domestic tourism but will also boost related infra structural development. The proposal of an ATM-like, One Nation One Card for pan India travel will ease inbound travel and will be convenient for tourists to explore India without any hassles. We look forward to leveraging these opportunities for the upcoming season.”
Rakshit Desai, Managing Director, FCM Travel Solutions (Indian Subsidiary of Flight Centre Travel Group)
“The Union Budget 2019, presented today by the honourable Finance Minister, Niramala Sitharaman has quite a few takeaways for the tourism industry. The government’s continuous commitment towards building a better physical and social infrastructure is a commendable gesture. Several initiatives which the government has undertaken like the Pradhan Mantri Gram Sadak Yojana, Bhartamala and Sagarmala projects, Jal Marg Vikas, industrial corridors and dedicated freight corridors are laudable and reflect how these infrastructural reforms will impact the tourism industry positively in the coming years. The UDAN Scheme which is designed to enable air connectivity to smaller cities is going to make air travel more accessible.
The Rs. 70,000 crore capital credit infusion for PSU banks should facilitate the growth of consumer credit and accelerate consumption of travel experiences. Also, the decision to develop 17 iconic tourism sites into world-class tourist destinations will further help in boosting tourism in those regions and at the same time serve as a model for other tourism sites in the country. The launch of railway station modernization programme this year will also attract more travellers and enhance railway travel experience. Crude oil prices have relaxed, however, the cost of Aviation Turbine Fuel (ATF) remains a concern as ATF constitutes around 35 % of the total operating costs of an airline in India, while globally it stands at about 25%.”
Madhavan Menon, Chairman & Managing Director, Thomas Cook (India) Ltd.
The travel and tourism industry is a crucial contributor to India’s GDP with a powerful multiplier impact, including employment generation, and hence we appreciate that the Union Budget 2019-20 reflects a clear growth priority for NDA 2.0, with potential to catalyse India’s domestic, inbound and MICE segments. Steering away from a populist approach, the Government has taken a long-term view with focus on revitalising the Indian aviation and travel and tourism sector. With this budget, the Government has addressed the key fundamental challenges like liquidity, FDI, employment and infrastructure development. It has also focused on enhancing the role of AI, robotics, technology which will lead the nation on the path to be future ready and benefit employees and workforce, at large.
The lowering of corporate tax (25%) up to companies with turnover of 400 Cr. is a welcome move especially to MSMEs and social enterprises. The effort is clearly on environmentally responsible growth, thereby living up to our promise of sustainable development.
Transportation infrastructure forms a critical base for the travel and tourism sector. And hence the budget announcements that focus on road and waterways via Bharatmal, Jalmala, Sagarmala, equally on massive railway modernisation and safety initiatives, backed by an overall budgetary outlay of INR 100 lakh Cr, is truly a welcome move. In addition, the government’s continued focus on UDAN to boost regional air connectivity and access, while simultaneously ensuring affordability to common man, is indeed laudable.
From an aviation perspective, much anticipated support to the sector has seen delivery via the Finance Minister’s announcements on FDI, aircraft financing and leasing, policy interventions for development of maintenance, repair and overhaul in India (MRO) to resuscitate the industry, and will certainly bring in a multiplier effect on airfares and job creation.
A noteworthy initiative is the setting up of 17 iconic tourism sites as world-class tourist centres, coupled with a Digital Repository to serve as a bank of documentation on India’s tribal history and heritage containing folk songs/dances, videos on their evolution, traditional arts, anthropological documentaries of tribes to preserve the rich tribal heritage.
Mahesh Iyer, Executive Director & Chief Executive Officer, Thomas Cook (India) Ltd.
The maiden budget of NDA 2.0 clearly seeks to mobilise resources and open up investments through increased FDIs in insurance, aviation and media sectors among others. We are optimistic about the long term roadmap towards addressing liquidity concerns as well as the corporate tax reduction.
The emphasis on rejuvenating the aviation sector through FDI in finance, leasing and MRO, is a much-needed step in the right direction. The tourism sector stands to gain significantly from modernisation of railways and aggressive budgetary outlays towards infrastructural schemes like Bharatmala, Jalmarg and Sagarmala. The second phase of UDAN will further enhance regional air connectivity between India and Bharat, making travel affordable and accessible across the country. A visionary inclusion from a transportation perspective was the announcement of the inter-operable One Nation-One Card. We see these initiatives bridging the urban–rural divide and also significantly bolstering growth in the sector.
A noteworthy announcement was that of a Digital Repository of tribal heritage with the aim of preserving rich tribal art and culture and promoting it. We also applaud the Government’s plans to develop 17 iconic tourism sites as world-class tourist centres. Showcasing the grandeur of the country among tourists, this will also position the country as a key destination for visual attractions. Clearly, tourism is being viewed as an important growth driver of the economy.
Amit Madhan, President & Group Head – Information Technology & Ebusiness
“The Union Budget 2019-20 announces increased efforts towards improving the skills of our youth in areas such as artificial intelligence, big data, robotics, etc. We look forward to the new influx of talent in the market with increased understanding and capabilities furthering cutting-edge digital innovation. Such skills will enable an increased focus on a seamless customer experience that is playing a key role across sectors including the tourism industry. Additionally, we also welcome the move to push cashless payments by waiving off the charges on digital payments enabling a broader spectrum for adoption and usage.”
Indiver Rastogi, President & Group Head – Global Business Travel – Thomas Cook (India) Ltd.
The Union Budget saw much required focus to India’s aviation sector with Finance Minister Nirmala Sitharaman unveiling plans towards aircraft finance and leasing – aimed at self-reliance in the aviation sector. This will see a cascading fillip to job creation/employment generation. Noteworthy is the Finance Minister’s announcement of plans towards opening up FDI in the aviation sector. The announcement that the government plans policy interventions for development of maintenance, repair and overhaul in India (MRO) is another highly pro-aviation move. Furthermore, the Union Budget’s focus on the Government’s UDAN regional connectivity scheme saw announcement of scaling up of regional airports thus increasing ease, access and affordability of air travel to the common man.
Balu Ramachandran, Sr. Vice President, Cleartrip
“The union budget has made the aviation sector more conducive for increased FDI by proposing to increase the FDI caps. This will attract increased interest in the Indian aviation space by enabling controlling stake for foreign carries and should add increased momentum to the Air India privatization process. The success of the AI privatization process is crucial to the health of the Indian aviation space as we can’t afford another airline bankruptcy after the jet airways event.”
Varun Chadha, MD & CEO, TIrun Travel Marketing (Royal Caribbean International)
“We are glad that the government has focused on the travel and tourism sector in this year’s budget and proposed positive steps to enhance the sector’s prospects. The government has pledged to develop 17 iconic world-class tourist sites while simultaneously popularizing the existing tourist spots. India is one of the few countries that offers a dynamic tourism landscape including natural, cultural, spiritual and experiential tourism. On the domestic tourism front, the National Common Mobility Card will add to the convenience of travellers significantly for making cross-segment payments. Hopefully, the government’s initiative will help establish India as a global tourism hub and help the sector contribute much more than the 9 percent it is contributing to the GDP currently.”
Jaideep Ghosh, Partner & National Head – Transport, Leisure & Sports, KPMG in India
“Travel & Tourism contributes nearly ten percent of our GDP. Union Budget 2019 continues to encourage promoting heritage attractions, and proposes a digital repository for tribal and rural tourism attractions. These measures along with the proposed massive transport and social infrastructure backed by digital platforms and financial sector reforms will further boost tourism.”
Aditya Ghosh, CEO – India & South Asia, OYO Hotels & Homes
The budget breaks away from tradition and nudges the public and policymakers to think outside the brown briefcase. It sets a vision for the next decade for India with an intent to bridge the socio-economic and urban-rural divide. The boost to infrastructure, labour reforms, access to capital and talent for start-ups and MSMEs alike will drive productivity and consumption, which is also good news for the hospitality, travel and tourism industry. The real test of this vision, however, will lie in its realization, which is essential to deliver on the government’s mandate of providing ease of living and ease of doing business. This will be possible only through concerted efforts from all stakeholders.
Subhash Goyal, Chairman – ASSOCHAM – Tourism & Hospitality Committee
We are disappointed that nothing substantial about tourism has been mentioned in the Budget. If we have to realise the Prime Minister’s vision of creating million of jobs and doubling inbound to 20 million, we need to increase air seat capacity in and out of India by at least 15 million. No new incentives have been provided to the exporters of Goods and Services. The industry, including services export and tourism, should be given incentives and benefits. In many countries the total tax on tourism including GST is not more than 5%. By over taxing tourism, we killing the goose that lays golden eggs.