Union Budget 2023-24 highlighted tourism as one of the major sectors contributing to the overall economy of the country.
Finance minister Nirmala Sitharaman stated that the sector holds huge opportunities for jobs and entrepreneurship for youth in particular and stated that promotion of tourism will be taken up on mission mode, with active participation of states, convergence of government programmes and public-private partnerships.
Out of the total Rs. 2400 crores allocated to the Ministry of Tourism, a major portion of the outlay amounting to Rs. 1742 crore is allocated for development of tourism infrastructure and an amount of Rs. 242 crore for promotion and branding.
An outlay of Rs. 1412 crore has been allocated for the Swadesh Darshan Scheme, a flagship scheme of the Ministry of Tourism.
The ministry has earmarked an allocation of Rs. 229 crore for tourism infrastructure, promotion of North-Eastern States under this year’s Budget allocation.
Experts believe that a focus on tourism is a huge plus for hospitality and travel industries as these are very well connected with each other.
The push for infrastructure in aviation, railways, waterways and roads, will also help travel and tourism grow within and outside India. Further, 50 tourist destinations being developed are expected to attract more foreign tourists in the country.
Ritesh Agarwal, founder and group CEO, OYO, said, “Increment in the capital investment by 33% in infrastructure and Urban Infrastructure Development Fund (UIDF) will have a multiplier effect. Announcing a capital outlay of Rs 2.40 lakh crore for the railway sector, addition of 50 airports, heliports, water aerodromes, and advanced landing grounds will further provide impetus to overall infrastructure, leading to improved connectivity across the country and enhancing domestic travel and tourism.”
Nishant Pitti, CEO and Co-founder, EaseMyTrip, said, “Theme-based tourist circuits and introduction of ‘Unity Malls’ by states to promote locally manufactured goods is yet another move that will result in revitalising the tourism industry, along with providing multiple opportunities for employment generation and entrepreneurship. Moreover, the introduction of the new income tax slabs will avail newer and better opportunities for people to travel and discover India’s rich diversity.”
Notably, the government has identified tourism as one of the key sectors, with huge potential to generate employment for the youth, and reiterated the government’s commitment to promote tourism on ‘mission mode’.
“We welcome the move to develop 50 cities across India as a complete package for domestic and international tourism, and developing an app to ensure all the key metrics related to travel and tourism for the said cities are regularly updated. We also laud the move to incentivise states to set up ‘Unity Malls’ in their most popular tourism destination for promotion of GI, ‘Made in India’ products and handicrafts,” Agarwal added.
Rajesh Magow, co-founder and group CEO, MakeMyTrip, also highlighted that the budget entails multiple welcome initiatives like the revival of 50 airports, the building of 50 new destinations, and high budgetary outlays on railways, roads, and highways, which will help long-term growth for the domestic travel and tourism industry.
However, Magow also underlined that “the budget proposal that will negatively impact the industry is the move to increase the TCS mandate from 5% to 20% on overseas tour packages. This will not only increase the upfront cash outflow for customers but will also give an unfair advantage to foreign-based online travel booking platforms over India-based travel agents and tour operators.”
Sabina Chopra, co-founder and COO, corporate travel and head industry relations, Yatra Online, underlined the travel and tourism sector has suffered a lot during the pandemic so the industry was 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 and wellness tourism by easing passengers’ commute,” Chopra added.
Aloke Bajpai, co-founder and group CEO, ixigo highlighted that the travel industry has bounced back phenomenally well in 2022, the next goal should be focussing on encouraging a faster revival of foreign tourist inflow and international travel.
“Setting up ‘Unity Malls’ in state capitals and popular tourist destinations will mark tourist spots, monuments, and spaces for visitors which will further boost the sector. The development of 50 new airports will improve regional air connectivity and benefit travellers from tier 2 and 3 cities which have seen significant growth in demand for air travel and first-time flyers post-relaxation of travel restrictions.”
Bajpai also highlighted that while these initiatives will benefit domestic travel in the long run, leisure vacations abroad can get costly for Indian travellers with TCS for overseas tour packages increasing from 5% to 20%.
Higher costs to Indian travellers because of an increase in tax can impact the international travel demand which was slowly gaining momentum, Bajpai added.
Experts from the hospitality sector pointed out some of the relief they were expecting in the budget.
Chander Baljee, chairman and managing director, Royal Orchid & Regenta Hotels, said, “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,” Baljee added.
“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,” Baljee highlighted.
Rajesh Ghanshani, director business development, Indian Subcontinent, STAAH, added that with the country’s vast size and diverse offerings, the travel sector is poised for growth.
The integration of technology, such as a centralised travel app, is expected to bring greater efficiency and convenience for both travellers and businesses. This could not only drive an uptick in domestic travel but also attract foreign visitors to experience India’s rich cultural offerings.
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