Budget 2017 didn’t promote much of tourism in India. Here’s why

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Budget 2017 by the Finance Minister Arun Jaitley wasn’t much of an excitement for the tourism industry except for announcing establishing of five special tourism zones in the next financial year.


Prior to the budget, Business Insider had discussed what the hurdles in this industry are. What needed to be done like tax-free bonds and income tax exceptions on profits used in re-investment in the tourism sector, development of tourism infrastructure at heritage site, setting up centres for adventure activities and experiential zones weren’t addressed. More support to drive job creation in this industry will help improve the poverty alleviation in the country.

Travel industry without sunshine
"The Budget 2017 has once again disappointed the travel industry . Despite being a key sector of the economy that brings multiplier benefits, the travel and tourism sector stands largely ignored. Our concerns about high tax rates are valid concerns and we are dejected that the government paid no heed to them. Across the world, governments provide huge incentives and tax breaks to the travel industry to encourage inflow of tourists . However, in India we continue to be a highly taxed sector which makes us less competitive as compared to other destinations,” said Kapil Goswamy, CEO and Managing Director, BigBreaks.com

Silver lining
However he added that the announcement to improve road infrastructure also has latent benefits for the tourism sector as it encourages travelling.

Apart from that, there are some silver linings in the industry, though.

“The 5% tax cuts proposed for MSMEs is one welcome step in this direction. Speeding up of infrastructure development for airlines, rail & highways will also help to boost more inter-state business activity,”said Adarsh Manpuria, Co-Founder , FabHotels.

Cash less travel
Vikram Ahuja of Byond Travel, a boutique travel start up feels, “Focus on digital payments and encouraging online payments (Via BHIM and other initiatives) is a huge plus for a tech-first company like ours. Also the cap on cash deposits hopefully creates more transparency in the way travel services and packages are offered since the scope for inbuilt “cash-led” services will hopefully reduce.”

Better railways and broadband
“The announcement for increase in railway connectivity to the remote areas and upgradation of airports in Tier 2 cities, a huge number of people will be able to travel smoothly from Tier 2 and Tier 3 cities. The high speed internet connectivity in rural areas will be the biggest advantage to them. This will help them to do more purchasing and online bookings. We are expecting more travel coming ahead. Along with this, reducing the income tax to 5% for the people having an earning bracket of 2.5 lac -5 lacs, it will be a crucial factor in their saving. This will increase their budget to travel and will also motivate youngster and young entrepreneurs to pay taxes, " said Gursahib Singh Sethi, Co-Founder, Travkart.com. ALSO READ: CAN YOU OWN A CAR AFTER THIS BUDGET?
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