Budget 2017: Waiting for big-ticket ride

Rebate on foreign exchange earnings, more funds for infrastructure, incentives for cashless transactions, lower rates under GST are some of the demands of the tourism industry.

Subhash Goyal, president, Indian Association of Tour Operators said, “We want tax rate of not more than 5% during GST implementation as that’s the global standard. Anything over than that will have negative effect on the sector. In case the GST could not be rolled out this year, the government should abolish service tax like the way the exporters of physical products get rebates on certain part of foreign exchange earned.”

As per the statistics available with India Brand Equity Foundation, a Trust established by the Department of Commerce, Ministry of Commerce & Industry, tourism accounts for 7.5% of the GDP and is the third largest foreign exchange earner.  

With effects of demonetization still lingering, the efforts to push cashless transactions is another concern. “We believe that post demonetization, it is necessary for the government to come up with measures that will help boost cashless transactions, in turn, facilitating seamless and easy online travel bookings. We also anticipate a lowered GST on travel-related services and the government investing heavily in the development of travel infrastructure,” said Aloke Bajpai, CEO & co-founder, Ixigo.

Ankur Bhatia, executive director, Bird Group echoes same sentiments. “We are hopeful that the government will lay more emphasis on tourism and provide effective solutions to promote domestic tourism,” adding, “The implementation of GST should be a prime focus. This will rationalise multiple tax structure.”

The expectations remain even as Ministry of Tourism on Monday announced that the country registered an 11% year-on-year increase in foreign tourist arrivals during last calender year.

However, a member of National Tourism Advisory Council, on condition of anonymity, rebuffed the growth, saying most of the foreigners who visited India are from countries like Bangladesh, Sri Lanka, Afghanistan, Bhutan  for medical and spiritual tourism. “These are not the tourists who spend money like leisure travellers.”

The industry observers claim that developing tourism has always taken a back seat as India being a developing country, spending on other social sectors takes priority.

“While the government’s initiatives to strengthen domestic connectivity as well as international accessibility have borne positive results, there is a huge gap in terms of travel facilities, infrastructure, hotels, recreational outlets, high taxes and tourist safety that still needs to be addressed,” said Vikas Chadha, executive director, Keys Hotels.