Home Spotlight India Union Budget 2020: Views of Tourism and Hospitality Industry

India Union Budget 2020: Views of Tourism and Hospitality Industry

The Union Budget for 2020-2021 presented by Nirmala Sitharaman, the Finance Minister has generated tepid response from the tourism sector.

Sriparna Pal Bhattacharya

The Finance Minister, Nirmala Sitharaman, in her speech said, India had moved up to 34th position in 2019 from 65thposition in 2014 in the Travel and Tourism Competitive Index (World Economic Forum). Owing to this, foreign exchange earnings for January 2019 grew from Rs. 1.75 lakh crore to Rs. 1.88 lakh crore which is a growth of 7.4 per cent. She urged state governments to develop a roadmap for certain identified destinations and formulate financial plans during 2021 against which specified grants will be made available to the states in the financial year 2020-21.

The allocation for Tourism and Culture Ministries has been enhanced to Rs. 2500 crores for the financial year 20-21 from `2189 (revised estimate Rs. 1416 crore) of the previous budget.

The budget proposes 100 more airports by 2024 under the subsidised UDAN scheme, introduction of more Tejas trains from iconic destinations and development of five iconic destinations.

It has also been a positive step to increase the infrastructure spending like creating five ‘smart cities’ and extending grant to states for destination development. Five archaeological sites, Rakhigarhi in Haryana, Hastinapur in UP, Dholavira in Gujarat, Shivsagar in Assam and Adichanallur in Tamil Nadu will be developed as iconic destinations with museums on the site to provide boost to the tourism sector.

Finance minister Nirmala Sitharaman has also proposed to allocate Rs. 3150 crore for the Ministry of Culture. The first Indian Institute of Heritage and Conservation will be set up with the status of a deemed university to be operated under the Ministry of Culture.

The budget also proposed the setting up of a maritime museum to highlight Harappan Age at Lothal Ahmedabad by the ministry of shipping, the renovation and recuration of four more museums across India and providing support for setting up a tribal museum in Ranchi, Jharkhand.

JurgenBailom, CEO & President, Jalesh Cruises

We welcome the government’s initiative to allocate Rs. 2500 crore for tourism promotion. Being one of the key drivers of growth and the third-largest forex earner for India, this initiative will further create employment and strengthen the tourism industry at large. We believe that India is poised for a quantum leap in the space of tourism which will contribute to the GDP growth in the coming years.

VineetVerma, CEO & Executive Director, Brigade Hospitality Services

Considering the budget was going to focus on tourism this time around, it piqued my interest. With the allocation of Rs. 2,500 crores in the tourism budget, and the State governments being requested to develop tourism road map, which the centre will support is very encouraging. For tourism is one of the largest employment generators and has the potential to place India among the top five tourism destinations in the world, the announcements made at the Union Budget will have a significant impact on the overall growth of the sector. And, we welcome the move to identify and develop new destinations but it is critical that we also focus on improving connectivity and infrastructure at our existing locations.

IndroneelDutt, CFO, Cleartrip

The government has backed its vision to turn India into one of the world’s top tourism hubs by allocating Rs. 2,500 crore for promoting tourism in general and setting aside a sum of Rs. 3100 crore for the Culture Ministry to boost regional tourism. What would be wonderful is to have an empowered nodal body comprising of the Govt / OTA / airline, hotel and other industry representatives with the objective of promoting discoverability, ease of booking and fulfilment of our cultural, natural and heritage sites. Introduction of more Tejas Express type trains and the inauguration of several culturally-significant archaeological sites are other much-needed moves. We also welcome the Hon’ble FM’s proposal to develop 100 more airports as well as the doubling of the airline fleet by 2024. This calls for skilled manpower development in parallel. The aim to double the fleet to 1200 in the next three years will certainly accelerate the passenger growth rate.

Sarbendra Sarkar, Founder & Managing Director, Cygnett Hotels and Resorts

The government’s push for infrastructure development by building more airports and as also the announcement of new Tejas trains will boost tourism outside the main centres. This, in turn, will have a positive impact on the hotel sector. We are building hotels in many new locations and with this kind of infrastructure development we will surely be a gainer.

Madhavan Menon, Chairman & Managing Director, Thomas Cook (India)

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 per cent 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.

Rahul Chaudhary, CEO & MD, CG Hospitality & CG Corp Global

The tourism industry’s proposed Budget allocation of Rs. 2,500 crore for the financial year 2020-21 is very encouraging. With the growth of tourism, comes the creation of jobs. While the tourism sector contributes almost 10 per cent of India GDP, expected to create employment growth of 10 per cent annually. State governments have been given more incentives to promote infrastructure and heritage sites through the UDAN and Tejas schemes which will further link less travelled locations which have the potential to become very attractive circuits. Most importantly, the new personal income tax regime would put higher disposable incomes in the hands of the individuals which would certainly also go into the tourism sector. After all, India’s growth story will always be linked to the rise of the middle class and subsequently the mid-market segments where the potential of growth is the highest.

Rohit Kapoor, CEO, OYO, India South Asia

It is heartening to see a budget that focuses on improving standards of living as well as economic development. A grant of Rs. 2500 crores for tourism promotion and the development of five iconic archaeological sites and museums in the country are bright indicators of the renewed focus of the government on the travel and tourism industry. Apart from these initiatives, the overall focus on increased disposable income, better infrastructure, better connectivity and the digital push will help boost demand for the hospitality industry in India. It is also heartening that the government acknowledges and understands the role of entrepreneurs in both capital and job creation in the country. Government’s efforts towards creating more opportunities for start-ups will spur entrepreneurship.

Rakshit Desai, Managing Director, FCM Travel Solutions – Indian Subsidiary of Flight Centre Travel Group

The tourism industry is a crucial contributor to India’s GDP and we appreciate that the Union Budget 2020-21 presented today by the honourable Finance Minister Nirmala Sitharaman reflects a potential for growth in domestic and inbound tourism. We see a clear focus on revitalising the aviation and tourism sector which will also boost employment in the industry. Several initiatives such as enhancing the role of AI and machine learning will make the industry more technologically competent and help us become future ready.

The decision to add 100 more airports by 2022 under the Udan scheme is a much anticipated support to the sector. It will further enhance regional air connectivity, making travel affordable and accessible across the country. With regard to the road connectivity, the central government’s plan to construct 2500 access control highways, 9000 km eco-development corridors, 200 coastal and port roads, 2000 km strategic highways along with the Delhi-Mumbai expressway and two other corridors to be completed by 2023 are commendable initiatives for bridging the urban–rural divide and significantly bolstering growth in the sector.

Allocation of Rs. 3,100 crores to Cultural Ministry for developing five archaeological sites as iconic sites with on-site museums along with a tribal museum in Ranchi are laudable and will impact the tourism industry positively in the coming years. Thankfully tourism is now being viewed as an important growth driver of the economy.

JB Singh, President and CEO, InterGlobe Hotels

The Union Budget 2020 largely lays emphasis on development of various sectors including transport, aviation, tourism and majorly infrastructure. With Rs. 1.7 lakh crore being allotted for transport infrastructure in terms of expansion of highways, new Tejas trains and 100 more airports getting announced, we expect seamless travel between tier II and urban cities. The initiatives to develop five new smart cities as well as building archaeological sites with on-site museums, will open new avenues and experiences for visitors and boost travel. With infrastructure being at the core for economic growth, we are hoping that this budget will help in creating and developing new and iconic destinations, thereby redefining the tourism industry, for the better and further improve spending, domestic travel and all this will have great long term benefits for the economy.

NishantPitti, Co-Founder & CEO, EaseMyTrip

In tune with the present government vision to encourage Indian travellers to travel more and contribute towards the nation’s growth, this budget takes it a step ahead. The budget has focused on promoting tourism and travel with an overall budget of Rs. 2500 crores in year 2020-21. Government aims to develop 100 more domestic airports under the UDAN scheme. To promote travel via railways, government will focus on more Tejas type trains that will connect tourist destinations in India. The Finance Minister has also laid stress on the development of archaeological sites into iconic sites with on-site museums. Five such sites are- Rakhigarhi, Hastinapur, Shivsagar, Dholavira and Adichanallur. Government has also announced renovation of four key museums. Rs. 150 crore have been allocated for the ministry of culture in 2020-21. We are hopeful that this budget will open new avenues for the travel industry.

Jaideep, Ghosh, Partner, Travel, Hospitality and Leisure, KPMG in India

Continued emphasis on infrastructure, energy, education, and healthcare will boost the economy over a long term. National Infrastructure Pipeline projects worth US$14 trillion, if implemented on a timely basis, would be a game-changer. Special focus on technology, connectivity and digital areas are very timely. Also, continued emphasis on investments in transport and digital areas would boost tourism and hospitality sector, which currently faces challenging economic situation. Grants to states for specified tourism initiatives, development of heritage sites and museums are welcome steps. Would expect the investments proposed in tourism, however, to be upped in the coming years.