The Interim Budget 2024-25 presented by Indian Finance Minister, Nirmala Sitharaman on February 1 has been met with mixed reactions from the travel and tourism industry. While there is general appreciation for the government’s long-term vision and focus on infrastructure development, some key demands of the past like industry status and rationalization of taxes were once again overlooked.
As per the interim budget, states will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them at global scale. A framework for rating of the centres based on quality of facilities and services will be established. Moreover, long-term interest free loans will be provided to states for financing such development on matching basis.
Navneet Nagpal, Principal Consultant and Director, Spectra Hospitality Services said, “As someone deeply involved in the hospitality sector, I can’t help but express my enthusiasm about the interim budget for 2024–25, especially its focus on the tourism industry. It’s heartening to see the government recognizing the vast potential of India’s travel destinations. The initiative to create renowned tourist spots and provide states with long-term, interest-free loans is a commendable step.”
The FM recognized that Metro Rail and NaMo Bharat can be the catalyst for the required urban transformation. Expansion of these systems will be supported in large cities focusing on transit-oriented development. For the unversed, the NaMo Bharat is an Indian Electric multiple unit (EMU) train built for RapidX (Regional Rapid Transit services). Currently, it is running and operational on Delhi Meerut RRTS system.
Manish Rathi, co-founder and CEO, IntrCity SmartBus said, “The government’s prioritization of improving public transportation and connectivity in the 2024 interim budget highlights the critical importance of efficient and reliable transportation in the country.”
In order to address the emerging fervour for domestic tourism, projects for port connectivity, tourism infrastructure, and amenities will be taken up on our islands, including Lakshadweep, Sitharaman highlighted in her speech.
In fact, the Indian government in the past too has taken a number of initiatives like ‘Dekho Apna Desh’ to promote the domestic tourism sector. The industry expressed happiness that the domestic tourism market once again found mention in the FM’s address to the parliament.
“We welcome the special focus on domestic tourism which represents a vibrant growth driver via the government’s plan of long-term interest free loans to states; development of iconic tourism centres with marketing on global standards. What was noteworthy is the reference to spiritual tourism and projects for port connectivity, tourism infrastructure and amenities on islands including Lakshadweep – aimed at development of India’s hidden gems,” said Madhavan Menon, Executive Chairman, Thomas Cook India.
The industry is expecting that the government will look into their demands when the full budget is presented later this year after the formation of a new government.
“The projects to enhance connectivity in the country through the development of airports, railways metro lines, ports in our unexplored islands and tourism infrastructure, will enhance demand and generate employment. This is not just a boost for tourism, it’s an investment in India’s potential. We are optimistic about additional futuristic support from the Government in granting infrastructure status to hospitality and tourism, which will help us achieve a long-awaited status. We foresee that this will have a multiplier impact and drive significant investment from the private sector,” said K.B. Kachru, Chairman Emeritus & Principal Advisor, Radisson Hotel Group, South Asia.
On the other hand, the Travel Agents Association of India (TAAI) expressed disappointment, noting the lack of immediate relief for travel agents and tour operators, especially regarding issues like the TCS levy on overseas tour packages.
“TAAI being the nodal and premier body feels that although being an interim budget pending challenges and concerns from over two years could have been addressed by the FM, especially on the TCS levy on overseas tour packages which is impacting business of travel agents operating in India making them non-competitive,” read a press release issued on the behalf of the association.
Some more reactions on the interim budget 2024
Kanika Tekriwal, Founder, JetSetGo: “Aligned with the government’s forward-looking initiatives, we celebrate the doubling of airports to 149, enabling private aviation companies like ours to extend our reach and serve as a vital link for India’s economic leaders, entrepreneurs, and decision-makers. The expansion of airport infrastructure complements our commitment to efficient time management and personalized services, ensuring a seamless travel experience.”
Gautam Aggarwal, Division President, South Asia, Mastercard: “The government’s decision to invest significantly in the tourism sector, as stated by the FM in the interim budget, is a welcome step that bodes well for the Indian economy. Coupled with a strong focus on infrastructure development, it will lead to the emergence of new tourism corridors, resulting in greater interest from domestic and international travellers to visit the less explored parts of the country.”
Shikhar Aggarwal, Joint Managing Director, BLS International: “The government’s fast-track development and investments in airport infrastructure and road connectivity projects will play a pivotal role in boosting connectivity. This, in turn, is expected to result in a substantial increase in the number of inbound travellers, further solidifying India as one of the most sought-after destinations globally. Additionally, the focus on spiritual tourism is poised to contribute immensely to the industry’s tremendous growth, ultimately bolstering the overall economic progress of India.”
Naveen Nahar, Partner, Travelz Factorry: “FM Sitharaman’s foresight promises a golden era of unprecedented development in our nation over the next 5 years. Furthermore, by prioritizing the empowerment of youth and enhancing digital, social, and physical infrastructure, the government is actively encouraging the younger generation to play a pivotal role in the country’s growth and contribute significantly to the GDP.”
Manoj Sihag & Rahul Uppal, Directors, Echor Hotels & Resorts: “We celebrate the government’s commendable increase in capex for road infrastructure. There is a missed chance in the new budget to merge GST categories. Despite this, the enhanced connectivity will positively impact local tourism, cutting travel time from major cities like Delhi to scenic destinations like Himachal and Kashmir through improved tunnels and roads.”
Pradeep Shetty, President, The Federation of Hotel & Restaurant Associations of India (FHRAI): “The enhanced focus of the Government for promotion of MICE, religious tourism, iconic tourism centres and domestic tourism will lay the foundation of tourism development in the ‘Amrit Kal’ and equip the sector to achieve the ambitious target of welcoming 100 million tourists by 2047. The tourism and hospitality sector are also very delighted to hear about the government’s vision to grant long term financing to states for developing iconic tourism centres.”
Rajesh Magow, Co-founder & Group CEO, MakeMyTrip: “We acknowledge, with satisfaction, the government’s sustained focus on travel and tourism as reaffirmed in the interim budget. The commitment to bolster domestic tourism through initiatives spanning rail and air travel, coupled with the ongoing emphasis on tourism-led destinations, particularly in the realm of island tourism and spiritual tourism, reflects a strategic vision for the long-term growth of the sector.”
Param Kannampilly, Executive Chairman, Concept Hospitality, The Fern Hotels & Resorts: “We applaud the government’s foresight in recognizing the immense potential within tourism, particularly the uncharted territory of spiritual tourism as the people of India are now willing to travel and explore more. This visionary approach not only unlocks doors for local entrepreneurship but also serves as a catalyst for employment generation. The emphasis on developing iconic tourist centers and global-scale marketing aligns seamlessly with our commitment to providing unparalleled experiences.”
Chirag Agrawal, Co-Founder, TravClan: “Tourism cannot grow without investment. We welcome the government’s initiatives on developing iconic tourist centers and investing in tourism and connectivity infrastructure. Measures such as long-term loans to states will foster long term development and unlock India’s tourism potential. We hope for more measures from the government that continue to build our air infrastructure and hospitality sector.”
Aditya Sanghi, CEO & CO-Founder, Hotelogix: “By catalyzing investments in pivotal areas such as port connectivity, tourism infrastructure, and amenities, the budget heralds a new era of growth. Such targeted investment not only amplifies tourist inflows but also enhances the quality of the traveller experience, providing a significant boost to the hospitality sector.”
Sibasish Mishra, Founder and CEO, Bookingjini: “The commitment to developing iconic tourist centers and global marketing is a positive step that can significantly boost tourist influx, benefiting hotels and hospitality establishments nationwide. The ongoing expansion of airports over the past decade has enhanced infrastructure for the aviation and tourism sectors, improving connectivity for domestic and international tourists. This not only makes travel more accessible but also creates new opportunities for growth and expansion within the hospitality sector.”
Dr. Vikram Kamat, Founder and CMD, The Vitskamats Group: “While appreciating the broader economic outlook presented in the interim budget, the hospitality and restaurant sectors also play a pivotal role in our economic landscape and require targeted support to navigate the challenges they face. As we anticipate the full budget, our hope remains steadfast for a more comprehensive approach to address the specific needs of these vital sectors.”
Kush Kapoor, CEO, Roseate Hotels & Resorts: “FM Sitharaman’s interim budget speech underscores a strategic move to reshape India’s MICE landscape by encouraging states to develop iconic tourist centers. The commitment to promoting these centers through long-term interest-free loans signifies a visionary approach, fostering a thriving ecosystem for local entrepreneurs. The recognition of G20 meetings as a showcase of India’s diversity is a powerful endorsement.”
Vishal Suri, Managing Director, SOTC Travel: “The special focus on strengthening domestic tourism via implementation of rail connectivity corridors under the PM Gati Shakti initiative and upgrading 40,000 regular train boogies into high-speed Vande Bharat trains will definitely strengthen surface transportation. The Government’s plan to focus on spiritual tourism, development of iconic tourist spots and island destinations of India including Lakshadweep (projects for port connectivity, tourism infrastructure, and amenities) will generate employment thus boosting India’s economy.”