India’s hospitality sector ‘ignored’ in national budget

India's finance minister Arun Jaitley proposed developing ten prominent tourist sites

The Union Budget 2018-2019 announced earlier this month has left the Indian trade largely unimpressed, as members cite unmet demands and question the lack of hospitality undertakings.

“The hospitality sector has once again been almost entirely ignored in the union budget. Developments in ancillary sectors like infrastructure and aviation are certainly positive but that alone isn’t adequate,” said Dilip Datwani, president, Hotel and Restaurant Association of Western India (HRAWI). “Promoting and encouraging investments in hospitality can place India on the map of tourism destinations of the world.”

Finance minister Arun Jaitley proposed developing ten of the country’s prominent tourist sites

Hospitality associations in the country were expecting that one of their long-standing demands for the hospitality sector to be accorded infrastructure status would be considered in this year’s budget.

The associations had also requested the government to levy a uniform 12 per cent GST rate, irrespective of the room tariffs, for all hotel categories.

“Undoubtedly infrastructure development and improving connectivity will help the tourism sector, however with no specifics spelled out, we are not sure how it could benefit the hospitality sector. We were hoping to hear from the finance minister about tax reforms that would have made Indian tourism competitive with neighbouring tourism countries,” said Rishi Puri, vice president, Lords Hotels & Resorts.

He agreed that the budget has “fallen short of expectations for the hospitality segment”, adding that promoting the ease of doing business remained a “dormant subject” this year.

Meanwhile, several initiatives announced by the government are expected to bring benefits to the broader tourism industry.

In his budget speech, Indian finance minister, Arun Jaitley proposed to develop 10 prominent tourist sites with focus on infrastructure and skills development, technology, attracting private investments, branding and marketing. In addition, tourist amenities at 100 monuments of the Archaeological Survey of India will be upgraded to enhance visitor experience.

The finance minister further shared that the regional connectivity scheme of UDAN initiated by the government last year would connect 56 unserved airports and 31 unserved helipads across the country. Operations have already started at 16 such airports.

Vishal Suri, managing director at SOTC Travel, said these would give a “much-needed boost to domestic tourism”.

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