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India’s tourism world comments on Union Budget 2023

Finance minister Nirmala Sitharaman.

Finance minister Nirmala Sitharaman announced a number of changes in the income tax slabs in the new tax regime.

Finance Minister Nirmala Sitharaman presented the last full-fledged Union Budget of the Modi government before the 2024 Lok Sabha elections on 1 February, 2023.

New income tax slabs 2023 – 24:

  • Up to Rs 3 lakh income there is 0% or NIL tax
  • From Rs 3 lakh to Rs 6 lakh the tax rate is 5%
  • From Rs 6 lakh to Rs 9 lakh the tax rate is 10%
  • From Rs 9 lakh to Rs 12 lakh the tax rate is 15%
  • From Rs 12 lakh to Rs 15 lakh the tax rate is 20%
  • Above Rs 15 lakh the tax rate is 30%

To the announcement, Mr Gaurav Bhatia, Executive Director, Bird Group comments: “The Union Budget announcement of 50 additional airports will augment the need for enhanced air connectivity. It will also have a tremendous rub-off effect on the allied sectors such as catering, ground handling and MRO, among others and in effect generating more employment both directly and indirectly. It has long been India’s dream to become a global aviation hub. We can see that dream taking shape , thanks to continuous growth in domestic aviation and such measures taken by the government to aid the sector post-Covid.”

Mr. Nandivardhan Jain, CEO & Founder, Noesis Capital Advisors has shared his expectations from the Union Budget 2023 for the Hospitality Sector says: “One of the biggest hurdles to growth in the hospitality sector is the cost of capital and a relatively short duration of debt tenure. As this is a high Capex asset class, it has a longer gestation period similar to infrastructure projects like railway, road, metro and aviation. Infrastructure status to the hospitality industry is a long-standing demand of the industry. We hope the finance minister will extend this status to the hospitality industry in this union budget.

The hotel room inventory in India is significantly lower than in other peer nations. With the Prime Minister charting the path for India to be a developed country by 2047 it has a comparatively low room-to-people ratio, i.e. We have only 0.7 room spaces per 1000 people whereas it is 10 in the United Kingdom and 20 in the United States. As the income levels are rising, the growth in our country revolves around its consumption story. The hospitality industry is one of the major contributors, hence it is imperative to increase the room supply, infrastructure status is the only long-term solution.”

Mr. Madhavan Menon, Chairman & Managing Director, Thomas Cook (India) Limited says: “The proposal in the Union Budget 2023, to increase the rate of TCS from 5 to 20 per cent for purchase of overseas tours & overseas remittances other than education will significantly increase the upfront cash outflow for end customers. It will drive more of these customers to use alternate channels that are outside the domestic tax net. We urge the Government to reconsider this. On the positive side:

  • Income tax rebates announced in the budget will result in an increase of disposable incomes which is welcome.
  • Tourism promotion being taken up on a “mission mode”- with active participation of states, public-private partnerships and convergence of government programs will drive domestic tourism growth.
  • Strong infrastructural focus in the announcement of 50 new airports, heliports, water aerodromes and revival of advanced landing grounds will enhance regional access and connectivity.
  • Financial support via loans to be provided to states for developing enhanced road and rail connectivity will help uplift of the domestic tourism sector.
  • The selection of 50 destinations to be developed as holistic tourism packages – combined with the focus on local level tourism & the promotion and sale of GI products & handicrafts will give a boost to local arts and artisans.”

Varun Arora, CEO and Co-Founder of Ekostay, a homestay venture comments, “The Union Budget 2023 led by Finance Minister Nirmala Sitharaman came with several great propositions and opportunities for the travel and tourism sector this year. the government identified their lack of concrete monetary support to the sector in the previous budget and took steps to rectify that. The FM addressed the immense importance of the travel and tourism industry in India’s GDP and the ample job opportunities and economic growth potential it holds. To boost the inflow of tourism from domestic and international tourists, some of the steps taken by the government are impressive. For instance, the selection of 50 tourist destinations in the country to be developed as a whole package and the revamp of 50 airports, helicopters, and aerodromes for improving regional air connectivity and boosting the influx of domestic and international tourists will improve the tourism infrastructure tremendously. The railway sector is also receiving a capital outlay of ₹ 2.40 lakh crores, which will improve travel accessibility for the low-income sectors and, in turn, boost tourism. To ease the stay of international and domestic tourists, the government will also look into improving the standards of food safety, tourist security, and physical and virtual connectivity, which we find commendable. As a positive side-effect, we will also see more job opportunities for the public, especially the youth. On the capital outlay front, we think that the infusion of the Credit Guarantee Scheme with ₹ 9000 crores and the provision of ₹ 2 lakh crores collateral to MSMEs in a bid to boost fund flow to the MSME sector will encourage startups and small businesses in the travel and tourism industry to expand their operations and witness an increase in revenue. It will give confidence to MSMEs and startup owners to approach banks for loans and ease the burden on banks to lend funds to MSMEs without collateral. However, unfortunately there was no relaxation on the GST front which was much anticipated from the government. But overall unlike the last budget, these are some concrete developments that will aid in promoting and boosting the tourism industry by a decently fair margin.”

Kush Kapoor, CEO, Roseate Hotels & Resorts says: “Honourable FMs push for the tourism sector is a great booster for the Indian hospitality industry. While post pandemic there has been a significant increase in domestic tourism’s contribution to luxury hotels, ‘Dekho Apna Desh’ campaign will further add to the momentum. The government’s focus on tourism promotion is evident in their opening up opportunities for joint participation of the states and private players in Government programs via the PPP mode. This will be a major driver for growth to tourism across India. Further, the development of 50 new airports and 50 destinations through challenge mode to develop a consolidated package for both domestic and international tourism also augurs well for India’s hospitality industry that has long grappled with infrastructure bottlenecks.”

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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