The Indian Finance minister Nirmala Sitharaman presented the Union Budget 2023-2024 today (February 1). In her budget speech, the FM said that the promotion of tourism will be taken up on mission mode, with the active participation of states, convergence of government programmes and public-private partnerships.
With an integrated and innovative approach, at least 50 destinations will be selected through challenge mode. In addition to aspects such as physical connectivity, virtual connectivity, tourist guides, high standards for food streets and tourists’ security, all the relevant aspects would be made available on an App to enhance the tourist experience. Every destination would be developed as a complete package. The focus of the development of tourism would be on domestic as well as foreign tourists.
Under the Vibrant Villages Programme, tourism infrastructure and amenities will also be facilitated in border villages. States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for the promotion and sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all other states.
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Michael Jain, Director, Belair Travel – The Global Travel Company
The Union Budget 2023-2024 presented by the Finance Minister (Nirmala Sitharaman) is a growth-oriented one and highlighted that the Indian economy is moving ahead in spite of the global economic challenges. The change in the individual tax regime with those with incomes up to Rs. 7 Lakh will now pay no tax is a good move to boost middle-class spending. I hope that the income tax exemption announced will help spur consumption in activities like travel.
With the government announcing that states will be encouraged to set up a “Unity Mall” in the capital city or most popular tourist destination for the promotion of ‘One District, One product’ theme, such initiatives will help to unleash the potential vested in the tourism sector. The announcement made by FM to develop 50 destinations for domestic and international tourists will also help to boost the growth of tourism and hospitality segments.
Regional connectivity is key for helping India to showcase its diverse tourism experiences. With the government’s plans to renew 50 additional airports, helipads, water aero drones, and advanced landing grounds, regional connectivity will improve strongly.
Sabina Chopra, Co-Founder & COO, Corporate Travel & Head Industry Relations at Yatra Online Limited
Travel and tourism sector which is projected to hit 9.9% of the country’s GDP before the end of this decade, has suffered a lot during the pandemic so we were expecting more relief from the government for accelerated revival. The 4% hike in ATF price will increase the burden on airlines, impacting the end consumer. However, on the brighter side, the announcement of highest ever railway outlay at Rs 2.4 lakh crore will help boost affordable regional connectivity and logistics of cargo freights.
The development of 50 new airports, helipads, and advanced landing grounds to improve regional air connectivity will provide a tremendous boost to niche segments like religious, spiritual & wellness tourism by easing passenger’s commute. Further, 50 tourist destinations being developed as a whole package for domestic and international tourism should attract more foreign tourists to the country. Overall, very encouraging to see an intense focus on our sector.
Asif Fazlani, Managing Director, Fazlani Nature’s Nest
The government’s focus on tourism in the budget by giving it a top priority is commendable. The allocation of resources highlights the importance placed on boosting employment through the tourism sector. The budget demonstrates the government’s commitment to the holistic development of the industry. The plan to develop 50 tourist destinations for both domestic and international tourists will revolutionize the tourism industry in India.
Sarbendra Sarkar, Founder & MD, Cygnett Hotels and Resorts
The Union Budget 2023-2024 presented by the Finance Minister (Nirmala Sitharaman) is a growth-oriented one aimed to help India weather the current global economic challenges. With the FM announcing plans to renew 50 additional airports, helipads, water aero drones, and advanced landing grounds, it will boost regional connectivity. Moreover, the announcement to develop 50 destinations for domestic and international tourists will also help to draw attention to the country’s tourism and hospitality sectors.
The FM said that these tourist destinations will be selected through challenge mode. The impetus on Dekho Apna Desh will provide a further boost to the growth of domestic tourism in the country. The FM also highlighted that states will be encouraged to set up a “Unity Mall” in the capital city or most popular tourist destination for the promotion of the ‘One District, One product’ theme. Such initiatives will also help unleash the potential taped in the tourism sector.
Riaz Munshi, President of OTOAI (Outbound Tour Operators Association of India)
It’s highly disappointing from outbound travel point of view. We requested honourable Finance Minister to reduced TCS percentage from 5% instead the government has increased to 20% which is going to hamper our business and at the same time there is going to be a huge deficiency in government revenue as people would prefer to either book through foreign tour operators or foreign OTAs to save GST and TCS both. At present also outbound tour operators and government of India is losing revenue on the same grounds.
Ravleen Sethi, Associate Director, CareEdge Ratings
The key announcements in the Union Budget 2023-24 to promote the tourism industry through active participation of state and public-private partnerships will further provide demand impetus for the sector and will act as a booster dose for the sector and this in turn shall also create demand for the hospitality sector. Further, the focus on increased regional connectivity and additional airports as announced will also promote tourism throughout the country and is a positive for the sector.
Kulbhushan Talwar, Cluster General Manager, Mosaic Hotels
We welcome the announcement made by FM to develop 50 tourist destinations in the country as a whole package to encourage both domestic and international tourism. As this step includes the development of destination in terms of transport connectivity, virtual connectivity, tourist guides, tourist security and high-standard food joints, it will definitely boost the employment opportunities generated collectively by hotels, F&B players, tour and travel agencies, OTA etc. Overall, Union Budget for 2023-2024 was balanced and I expect the direct tax recommendations will empower the middle class to spend money on lifestyle and travel.
Shamsher Dewan, Senior Vice President & Group Head – Corporate Ratings, ICRA Limited
Measures announced in the Union Budget 2023-24, such as the focus on infrastructure improvement across the country, including last mile and rural/border areas; improvement in regional air connectivity and theme-based tourist circuits are likely to facilitate access to tier-II and tier-III towns and improve tourism prospects in these areas. Further, enhancing tourist security and the availability of an app for enhancing the tourist experience are steps in the right direction.
Enhancing ease of doing business will also be beneficial for the industry, considering the pickup in new supply announcements in the last few months. Given that the travel and tourism industry accounted for about 9% of employment in the country in CY2019 pre-pandemic, sector-specific skilling and entrepreneurship development will augur well for the sector over the medium term.
Sakshi Sawant, Social Entrepreneur, Maati Nature Resort
For a surging travel and tourism industry post the pandemic, the Budget booster to the sector will increase tourism potential of under-developed or undeveloped micro tourism pockets in the country, develop undiscovered tourist spots into full – grown tourist destinations especially in smaller towns and villages, create tech-enabled innovative tourism assets and bring more entrepreneurship by creating job opportunities for youth. The plan to select 50 tourist destinations for domestic and international tourism will spin the local economy and help increase the foreign exchange inflows.
The Unity Mall seems to be a unique concept that will compel all the States to create prominent centres of tourism. The One District – One Product Scheme will help the local craftsmen and the GI – mark will enhance their market prospects. For instance, the fastest growing tourism places like Sindhudurg may benefit perfectly with such pro – tourism initiatives where new tourism spots could be developed and promoted, local youth and craftsmen could get better prospects
Rajiv Mehra, President, Indian Association of Tour Operators (IATO)
For the first time the Finance Minister (Nirmala Sitharaman) has in the start of the budget addressed the importance of tourism in India and recognised its potential for growth in employment generation and it needs to be tapped. Initiatives like tourism Infrastructure facilities to be developed in villages, especially in the border areas and One District One Product are very encouraging for the sector. However, none of our demands like, rationalisation of GST on the tourism industry, exemption of GST on foreign exchange earnings and refund of tax on shopping under Tax Refund to Tourist (TRT) scheme on shopping etc. for which there is already a provision in GST Act, have been considered. The government should consider our demands sympathetically which are very important for the revival of tourism post-pandemic.
Paritosh Ladhani, Joint Managing Director, Sincere Developers – owners of Taj Hotel & Convention Centre Agra
The Union Budget 2023-2024 presented by the Finance Minister (Nirmala Sitharaman) highlighted that the Indian economy is on a growth trajectory in spite of the global economic challenges. In her Budget speech, the FM emphasized that the country offers “immense attraction” for both domestic and international tourists. With the government announcing that states will be encouraged to set up a “Unity Mall” in the capital city or most popular tourist destination for the promotion of ‘One District, One Product’ theme, such initiatives will help to unleash the potential vested in the tourism sector. I also expect that the change in tax regime announced in the Union Budget will result in more disposable income in the hands of middle-class consumers – which I expect ultimately will spur consumption in activities like travel. Regional connectivity will see a boost with the plans to renew 50 additional airports, helipads, water aero drones, and advanced landing grounds.
SP Jain, Chairman and Managing Director, Pride Hotels Limited
The Honorable Finance Minister Smt. Nirmala Sitharaman has announced the development of tourist places jointly by public and private partnerships. This will give a much-needed boost to the domestic tourism segment. The budget specifies that 50 tourist destinations will be selected and developed as a whole package for domestic and international tourism. We welcome this announcement. For domestic tourism “Dekho Apna Desh” has already been promoted very widely now similarly international tourism too will be revived with these initiates. The tourist infrastructure will also be provided on the border and in North East India which will be highly beneficial for the inflow of tourists. The industry can harness the direct and multiplier effects of tourism in employment generation to the youth of India as the sector creates direct and indirect job opportunities. We believe these implementations will play a pivotal role in overall economic development. This is a good budget for the hospitality and tourism sectors.
Jyoti Mayal, President, Travel Agents Association of India (TAAI)
TAAI is disappointed with the lack of consideration given to the country’s travel agents and tour operators. However, we applaud the FM’s (Nirmala Sitharaman) idea of promoting travel on a ‘mission mode’. With the Union Budget 2023-24, the FM has shown solidarity towards the tourism sector and has left the travel fraternity hopeful. However, there’s a huge wave of disappointment among the travel agent fraternity as the budget holds nothing for this large section which contributes 11% of employment and generates over 10% of the revenue in GDP. We are shocked that instead of abolishing it, the government has raised the TCS from five to 20%! For foreign remittances for other purposes under LRS and the purchase of overseas tour program, the TCS rates are proposed to go up from 5 per cent to 20 per cent, which is going to be detrimental to our business. However, we are still waiting for more clarity on TCS levied on overseas tour packages.
Nothing has been done for our request on ease of doing business be it on TCS abolishment or ITC for Tour Operators on interstate GST credit which is one of the main concerns requiring urgent redressal. As part of the larger travel fraternity, we are very happy that the FM gave importance and mentioned tourism as a priority sector for providing jobs. The budget shall be advantageous for overall tourism growth in inbound and tourism infrastructure development but the growth of travel agents and tour operators remains unchanged this year too.
We are also happy to hear about the FM’s decision on selecting 50 tourist destinations through ‘challenge mode’ to push domestic and international tourism. Facelift and development of these destinations will encourage both inbound and domestic tourism. With a loud and clear declaration of taking up tourism promotion on a large scale, the FM’s decision of promoting tourism on ‘mission mode’ is quite encouraging. The travel industry is happy about the Swadesh Darshan scheme for the integrated development of theme-based tourist circuits. The Vibrant Villages Programme, tourism infrastructure and amenities facilitation in border villages will encourage sustainable development.
The decision of developing 50 additional airports, heliports, water aerodromes, advanced landing grounds is a positive step. The decision of setting up a Unity Mall in their state capitals or most prominent tourism centre for the promotion and sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all other states is also a step ahead in promotion of domestic tourism and ‘atmanirbharta’.
Chander Baljee, Chairman and Managing Director, Royal Orchid & Regenta Hotels
In my view, the budget is very promising for our sector this year. Tourism has in some way been given the spotlight that was required for a long time. The focus on ‘Bharat Dekho’ is commendable as this is an initiative that will push Indians to explore India and see their own country like never before. However, there are several areas, especially in the hospitality industry that have been missed. There are no loans for long terms as well as no industry status which has been our request for years. Though tourism has been recognised as one of the drivers for the economy, yet, the suggested 50 additional airports will certainly help the industry but will take another 3-5 years to be built. The same can be said for the 50 tourist destinations that will be selected. This will take a very long-time , maybe even five to 10 years before completion.
In my view, more prominence has to be given to our industry. There should be more focus on the connectivity of airports, especially from the city centres by road or metro. Tourist places should basically have clean and hygienic toilets, which should be permitted especially where the archaeological departments do not permit it. Finally, instead of food stalls at tourist destinations, there should be proper food courts and parking facilities.
Ashish Sidhra, Co-founder of Alike.io
Government’s decision to launch a challenge-based model for selection of at least 50 destinations across India is a hugely welcome step for the development of world class tourism experience in the country. With a holistic focus on not only hard infrastructure, like physical connectivity, but also on softer aspects of Tourism experience delivery like Travel agent quality and tourist safety, the proposed destination rankings will help foster friendly competition among destinations to rank higher than their compatriots. While we await the exact details of the scheme, what gives us optimism is the success of a similar model used for the Swachh Bharat City rankings. We have all seen the positive impact these city rankings have had on the cleanliness across cities in India, driven in large parts due to the sense of competition introduced by the scheme. In a survey done by Local Circles during Sep-Oct 22, 53% of respondents believed that the scheme had led to improvement of civic sense among the general public. A similar grassroot level change will go a long way in delivering a true “Atithi Devo Bhava” experience for guests to these destinations.
Priya Thakur, Founder, Larisa Hotels and Resorts
We are very pleased to see that the Union Budget for 2023–2024 includes funding for the development of tourist sites in India for both domestic and foreign visitors. With LaRiSa’s strong presence in popular tourist areas like Goa, Manali, Shimla, and Mussoorie, we hope to see an increase in travelers. With a boost in infrastructure and enhanced air connectivity, we hope to welcome guests from varied locations. LarRiSa has always supported and endorsed the spirit of uplifting the local community. With the promotion of local tourist spots and spaces, it will not only result in the upliftment of these cities but will also provide more jobs and opportunities for the locals all around the year.
Vinay Dube, Founder and CEO, Akasa Air
The Union Budget presented by the Hon’ble Finance Minister is growth oriented and will steer India towards holistic development across all pillars. The announcement of 50 additional airports and ramping up of air transport infrastructure is a welcome move and will support the nation’s growing demand for air travel. The focus on promoting domestic tourism will provide impetus to further revival of the sector and aligns with our vision to strengthen India’s transportation system. As India’s greenest airline, we are delighted to acknowledge Green Growth as one the key priorities of this Union Budget and be at the forefront of creating green job opportunities in the country.
Vishal Suri, Managing Director, SOTC Travel Limited
The Union Budget 2023-24 presented by Hon’ble Finance Minister provides a positive focus on infrastructural development/investment, digital enhancements, sustainability, agriculture, domestic tourism. We appreciate the Government’s plan of continued focus on domestic tourism, railways, new airports, heliports, water aerodromes that will improve regional connectivity and be one of the key drivers of the domestic tourism sector.
Further the announcement on the launch of an app to enhance domestic tourism experience reiterates our country’s focus on digitization. The ‘Dekho Apna Desh’ initiative focusing on sector specific skilling and entrepreneurship development while the facilitation of tourism infrastructure under the Vibrant Villages Programme, and setting up a ‘Unity Mall’ in state capitals/ popular tourist destinations to promote ‘One District, One product’ for GI products and other handicrafts will strongly support domestic tourism.
The travel & tourism industry supports one in 10 jobs and provides livelihoods for a significant number of people, therefore the Government’s support on prioritizing tourism with active participation from local authorities, sustainable practices and encouraging public-private partnerships is a positive pivot towards revival/road to recovery.
However this Union Budget did not provide the travel & tourism industry the respite we anticipated with respect to rationalization of taxes. Instead the proposals increased TCS on outbound travel and other LRS transactions from 5% to 20% without any threshold exemption. In our view, such high rates of taxation are an added liability to outbound travelers and negatively impacts tour operators recovering from the pandemic. We request the Government to reconsider this proposal.
We also hoped this budget would offer elimination of the 5 crore capping for the SEIS benefit and incentives to Corporates for organizing meetings and conference in India through partial or full tax exemptions.
Madhavan Menon, Chairman & Managing Director, Thomas Cook (India) Limited
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.