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Budget fails to deliver for tourism and hospitality industry

Players in the tourism sector have expressed their disappointment with the budget 2016. The industry was hoping for some key recommendations on lower goods and service tax for related services, extension of e tourist visa, promotion of medical tourism and lowering the threshold of infrastructure status threshold for hospitality projects to 25 cr, which did not figure the budget. The budget does not meet up to the expectations of the industry, which has been projecting innovation with wide reforms and a more dynamic India. Sunil Kumar, President, Travel Agents Association of India (TAAI), says “Tourism has been again been put on the back burner. It is a big tragedy for an industry that has so much to offer many countries of the world. Wonder when India will consider this industry as an important economic success strategy. Also there were expectations on Service Tax reliefs; boost to tourism sector; incentives for foreign exchange earnings, and these appear to have missed out.

The income tax relief should have been on most classes, but is only done for lower slabs. Whatever must happen in the areas of travel, tourism and aviation, will not be dependent on this budget at all. In fact, the new 0.5 per cent is going to add liability to all. The new budget has hardly any positive impact on our industry, which is sad. For this industry being a very large employer of people and generator of huge revenues for government in the form of taxes, government’s attention is rather disappointing. Unless the government firmly reviews the challenges of all stakeholders in this industry, it will not be able to support the growth that is available in plenty. The only silver lining to a gloomy picture is the focus on skill development.

With the growing size of the industry, it is important that we have skill development as major HR initiative to create the right leaders to run the show. Hope the details of application will cover investments to be made by our industry leaders on deputing their personnel in skill development. All expenses related to skill development must be well subsidized by the government.”