Tag Archives: Union Budget 2024-2025

“Tourism and hospitality play a crucial role in the growth of the Indian economy. However, there has been no policy announcement to facilitate the development of hotels and the promotion of inbound tourism”, says KB Kachru, President, HAI. The industry will continue to ask for a grant of infrastructure status for the hospitality sector, he said.

The budgetary allocation for the Civil Aviation Ministry has been reduced to ₹2,357.14 crore for the current fiscal ending next March. Meanwhile, the regional air connectivity scheme is set to receive ₹502 crore during the same period. In the budgetary allocation for 2023-24, the amount for the Civil Aviation Ministry was ₹2,922.12 crore.

Presenting the Union Budget 2025, Finance Minister Nirmala Sitharaman proposed a simpler tax regime for foreign shipping companies operating domestic cruises in India, aiming to boost cruise tourism. She highlighted plans for ownership, leasing, and flagging reforms to enhance the domestic shipping industry’s share and create more jobs.

Commenting on the Union Budget, KB Kachru, President, HAI, stated, “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, there is no mention of any policy changes to expedite the growth.” He further said, “Tourism and hospitality play a crucial role in the growth of the Indian economy. The continued focus on government spending on infrastructure development augurs well for the sector. Improved infrastructure would translate into better connectivity which will be beneficial to the promotion of tourism. The development of the eastern region especially Odisha, temple corridors in Gaya and  Bodhgaya, Rajgir and the identification of Nalanda as a key tourism site continue to demonstrate the government’s intent to utilize the potential of tourism. Regrettably, however, there has been no policy announcement to facilitate the development of hotels and promotion of inbound tourism. The announcement of GST simplification, comprehensive review of the income tax Act provides some hope for the sector that has been seeking rationalisation of taxes. The benefits to individuals on taxation will augment the spending power. The focus on skilling and incentivising employers for creating jobs are other positives that will benefit all sectors.” Although not directly linked to this budget, the industry would continue pursuing its ask for grant of infrastructure status for the hospitality sector and industry-related benefits by all state governments, Kachru added.

Giving his reaction to the Union Budget announced today, PP Khanna, President, ADTOI, said, “The budget was expected to be a comprehensive roadmap for the next five years but appears to lack substantial long-term strategies. Specific sectors, such as tourism, received attention, but the initiatives may seem insufficient in scope.” Commenting further, he said, “The government has implemented GST, which has reduced the compliance burden on trade and industry by unifying the highly fragmented indirect tax regime in India. The tax base of GST has more than doubled, and the average monthly gross GST collection has almost doubled to ₹1.66 lakh crore. On the other hand, no specific information on TCS in the tourism industry is available. The tourism industry has been impacted by the introduction of GST and TCS, with some tour operators and travel agencies facing challenges in complying with the new tax regime. However, the government has taken steps to simplify the tax process and reduce the compliance burden on businesses. The general sentiment is that the budget does not fully meet the high expectations set by previous promises.”

Reacting to the Union Budget which has been announced today, Gajesh Girdhar, National Coordinator, NIMA, said, “We welcome some of the initiatives proposed in the Union Budget such as the government’s continuous focus on the development of domestic and inbound tourism, 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 significant move not only for domestic tourists but also to attract foreign tourists, who always look for new cruise destinations.” Giving a further boost to religious tourism, the Finance Minister has emphasised developing new destinations in Gaya and Bodh Gaya. However, there is no mention of any specific concession on GST and TCS for Indian Outbound Travellers to the dismay of the Tour Operator Fraternity, Girdhar further said.

Expressing her views on the Union Budget 2024-2025 presented by Union Finance Minister, Nirmala Sitharaman today, Jyoti Mayal, President, Travel Agents Association of India and Vice Chairperson, FAITH, said, “The budget for tourism is a huge letdown. Out of 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 companies and a simpler tax regime for foreign shipping companies’ operations in the domestic market for cruise tourism.” She added that the focus on skilling is appreciable but where will the jobs be created in the tourism sector unless the employer can absorb more and pay the skilled youth?

Ahead of the Union Budget, Jyoti Mayal, President, TAAI, said, “To make India a preferred travel destination, the Union Budget 2024-2025 must focus on infrastructure, more favourable GST rates and GST credit, industry status including travel operators, development of new airports, and rapid expansion in rail, road and waterways.”

KB Kachru, President, HAI, said, “The forthcoming Union Budget offers an opportunity to unleash the potential of India hospitality in its contribution to India Vision 2047. We request the government to make key policy shifts in the sector by giving infrastructure status to hotels rather than categorising them as luxury, elite or even ‘sin’ goods”.

Rajiv Mehra, President, IATO said, “We requested the Prime Minister for financial support to be provided to tour operators based on their foreign exchange earnings. Additionally, we urged the Ministry of Commerce, Government of India, to allocate a Unof rupees ₹1000 crore or more for the revival of incoming tourism.”