
The budget of 2016, presented by
The spread looked delicious and the major players were too happy to believe. But on the fateful night of 8th November last year, the debacle happened. PM Modi demonetized Rs 500 and Rs 1000 notes and tourism industry among many others was badly hit. While the government had the logic of digital transaction, foreign tourists coming to India inspired by ‘Atithi devo bhava’ were taken aback. November being Thanks Giving month for most people in the West became quite thankless to the foreign tourists. With too much limitations on withdrawal and exchange, an online travel portal on condition of anonymity told
So does the upcoming budget look like a silver lining?
Let’s hear it from the experts:
Chander K. Baljee, Royal Orchid
The industry is still saddled with multiple layers of tax include VAT, service tax, luxury tax etc. and ranges from 20% - 30%. Lowering the threshold of infrastructure status for hotel projects to Rs. 25 Cr. would also do well. Some of the aspects which can be considered are: special incentives 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. More support to drive job creation in this industry will help improve the poverty alleviation in the country.”
Talking about building of infrastructure, Ritesh Agarwal, Founder & CEO, OYO said, “Infrastructure development is a pre-requisite to provide the much-needed impetus for the industry’s growth. Additional incentives should be provided for infrastructure investments in the travel and tourism sector to accelerate growth. A lower tax rate for hospitality business and the lower rate of interest for real-estate development will ensure opening up of more supply for the nascent branded budget hospitality sector. This will be in line with supporting small owner-friendly policies, such as the exemption of service tax in the sub-Rs. 1000 hotel room category.”
Not just Indian entrepreneurs, even tourism boards of various countries are equally excited about the budget on Februray 1. Hanneli Slabber, Country Manager, South African Tourism India said, “Positive taxation of course will help propel domestic tourism forward. We look forward to positive taxation on airline tickets and airport services to make the proposition of flying domestically and internationally more accessible to all Indians.”