Overseas promotion funds slashed

The 7th Union Budget mentions about tourism but did not really meet the expectations of tourism and hospitality stakeholders with reduced overseas promotion allocation and no tax relief for the industry.

TT Bureau

The budget allocation for Ministry of Tourism was increased from Rs. 1,692.1 crore in 2023-2024 to Rs. 2,479.62 crore in 2024-25. However, the allocation for overseas promotion and publicity, including Market Development Assistance (MDA) was slashed from `100 crore to `33.02 crore. On the other hand, allocation for domestic promotion and publicity & MDA was increased from `95 crore to Rs. 176.97 crore. The finance minister announced the development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor, besides promoting Rajgir and Nalanda as tourist destinations. Focus will also be on Odisha to be developed as a tourist destination. A major announcement was of simpler tax regime for foreign shipping companies operating domestic cruises in the country, aiming to give a fillip to cruise tourism in India. Apart from that, Sitharaman highlighted the government’s Startup Credit Guarantee Schemes.

Rajiv Mehra, President, IATO
There has been a continued neglect of the tourism sector. Once again, the Union Budget has completely ignored us, as it has in the past. There is nothing at all, except for the development of some temples in Bihar and Odisha. There is no provision for inbound or domestic tourism. The only positive aspect is a `30 crore increase in the overseas marketing budget, up from `3 crore in the interim budget. However, this marks a decrease from `100 crore to just `33 crore.

Jyoti Mayal, President, TAAI
As President of the Travel Agents Association of India & Vice Chairperson of FAITH, the budget for tourism is a huge letdown for us. Out of the 28 states and 8 Union Territories, the FM focuses on the infrastructure development of a couple of states, which is quite disappointing. However, the promotion of a religious corridor in these states is appreciated. The only word of inclusion is the reduction of TDS for all e-commerce firms and a simpler tax regime for foreign shipping firms.

Ajay Prakash, President, TAFI
As usual, the tourism industry has been left high and dry this year too. Every year, we put forward what we think are necessary steps if tourism is to realise its full potential. And like every year, it has been ignored. While tourism was mentioned as one of the three important aspects, the only thing, the FM said, the government would do is to develop the temples and corridors at Rajgir and Bodh Gaya, revive the Nalanda university, and there was some concession for domestic cruises.

KB Kachru, President, HAI
There is a continued focus on infrastructural development, fiscal prudence and consolidation whereas tourism continues to be accepted as an engine of growth for the economy. The emphasis has been given to spiritual tourism. However, no policy announcement has been done to facilitate the development of hotels and promotion of inbound tourism. The announcement of GST simplification, and comprehensive review of the Income Tax Act provides some hope.

Pradeep Shetty, President, FHRAI
There is nothing spectacular in the budget to bring structural changes to address the fundamental challenges it faces in a competitive world order, and to accelerate the growth of the sector to be a $3 trillion economy by 2047. Some key demands of tourism and hospitality to revitalise the sector, such as GST rationalisation, granting of infrastructure status and bringing ease of doing business and policy reforms have not been considered in the budget once again.

Riaz Munshi, President, OTOAI
Once again, there seems to be nothing in the budget for outbound tourism, although we were expecting some reduction in TCS and GST. We had submitted a representation to the tourism ministry, explaining how these taxes are affecting our members’ businesses and causing revenue loss for the government. Unfortunately, it appears they either do not understand or do not wish to acknowledge these impacts. They are also experiencing revenue losses.

Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited
This year’s Union Budget has opened new doors to development, specifically for domestic and inbound tourism. We are optimistic about the significant allocation of `11.11 lakh crore towards infrastructure development. When introduced, TCS was considered disadvantageous to salaried, but they can now avail immediate credit of TCS paid on account of their foreign travel. The discontinued SEIS scheme should have been reinstated.

Rajesh Magow, Co-Founder & Group CEO MakeMyTrip
The Union Government’s continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots. The decision to reduce the TDS rate on e-commerce operators to 0.1 per cent is a welcome move. The provision of credit for TCS under ‘Income from Salaries’ is logical.

Rikant Pittie, Co-Founder, EaseMyTrip
The government demonstrates efforts to promote religious tourism and domestic tourism infrastructure. With special focus on Bihar, Nalanda, and Odisha, the government plans to develop the religious sites as world-class religious and tourist destinations. We are optimistic this will enhance the overall experience of religious tourists. Additionally, the government has also shown interest in simplifying taxation in cruise business.

Naveen Kundu, Managing Director, Ebixcash Travel
Terrible is the word for the Union Budget 2024, which is appalling when it comes to tourism. It’s all talk and no action! The already neglected sector has been simply ignored. Where have initiatives like ‘Meet in India’ and ‘Chalo India’ disappeared? Can all that be achieved with a budget of just `33 crore? I’m certain even that will remain unspent. This budget is bizarre and deeply disappointing! I am surprised that even after the G20, there has been no effort to learn.

Anil Parashar, Executive Director, ITQ
Budget marks a transformative moment for India’s tourism sector. With an substantial 44.7 per cent increase in funding to `2,450 crore, along with enhanced infrastructure, support for aviation, and simplified visa processes, this budget is poised to elevate India’s status as a premier travel destination. These measures will not only attract domestic and international travellers but also open up new opportunities for travel providers. The vision is clear to make India a tourism hub.

Pankaj Nagpal, Managing Director, Travstarz Global Group
Extremely disappointed with the budget, as it does not address any issues of grave concern to the tourism sector, like the GST, TCS, and industry status. There is no clear focus on promoting India as a tourism hub. Only developing temples and some specified corridors that lack basic infrastructure will not help India realise its true potential. It has been seen that all governments in power have only done lip service when it comes to tourism.

Gajesh Girdhar, Founder & National Coordinator, NIMA
NIMA welcomes some of the initiatives proposed in the Budget, such as the government’s continuous focus on the development of domestic and inbound tourism sectors, encouragement to the Indian cruise tourism industry by offering a simpler tax regime for foreign shipping companies looking to operate and lease the vessels in Indian waters. This is a move not only for domestic tourists but also to attract foreign tourists.

Pushpendra Bansal, COO, Lords Hotels & Resorts
The hospitality sector was optimistic about the Budget aligning with the Union Government’s vision of Viksit Bharat @2047, focusing on economic development, environmental sustainability, social advancement, and effective governance. Unfortunately, our important demands, such as granting infrastructure status to the hospitality sector and increase in funds for marketing and overseas promotions, were left unaddressed.

Shrikant Goenka, Chairman, IAAPI
The Finance Minister announced that the Union Government is working on many development projects to make India the international tourism hub. This will give a boost to the tourism sector. The budget provides for good investments for development of Rajgir, Nalanda, Vishnupad, Mahabodhi temple and various sculptural marvels of India. These will make wonderful corridors to attract huge investments.

Davinder Juj, General Manager, Eros Hotel New Delhi
We welcome the provisions presented in Union Budget 2024 by Finance Minister Nirmala Sitharaman, particularly the initiative to transform several iconic locations into world-class tourist destinations. This strategic move aims to attract businesses, support entrepreneurship, and create jobs for local communities. We also praise the government’s dedication to position India as a top global travel destination.

Aloke Bajpai, Chairman, MD & Group CEO, ixigo
The government’s policy initiatives to enhance spiritual tourism is a welcome move. We saw a 40-50 per cent increase in demand for spiritual tourism last year, for destinations like Varanasi, Ayodhya, and Tirupati. The government’s PRASAD Scheme has led to a remarkable transformation in Varanasi’s tourism sector, attracting 100 million visitors to Kashi Vishwanath Dham after the corridor project completion.

Kush Kapoor, CEO, Roseate Hotels & Resorts
Though the Budget did not provide direct tax rebates for the hospitality, it offers significant indirect benefits. The new centrally sponsored scheme for skilling 20 lakh youth over the next five years is a vital step. Revision of the Model Skill Loan scheme and the introduction of a new internship programme, funded through CSR, will assist in attracting skilled manpower. The government’s upskilling initiatives are commendable.

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