The tourism industry has hailed the Union Budget of 2019 as a boost to the growing tourism sector of India.
The first budget of the second term of the Narendra Modi government was presented on July 5 by the newly minted finance minister Nirmala Sitharaman which brought in a mixed reaction for the tourism sector. The budget announced the developing of 17 iconic sites to encourage tourist arrivals in India.
“The government is developing 17 iconic tourism sites into world-class tourist destinations and to serve as a model for other tourism sites. The iconic tourism sites would enhance visitor experience which would lead to increased visits of both domestic and international tourists at these destinations,” said Sitharaman.
The expenditure set for the tourism and culture ministries have got a marginal increase in the Union Budget 2019-20 with INR 21.89 billion allocated to Tourism ministry and INR 30.42 billion for Culture ministry.
Nirmala Sitharam also said that “a digital repository is developed where documents, folk songs, photos and videos regarding their evolution, place of origin, lifestyle, architecture, education level, traditional art, folk dances and other anthropological details of the tribes in India are stored.” This development will also help in promoting the rich tribal and cultural heritage of India.
Reactions from the industry
Sitharaman also highlighted about the National Common Mobility Card standards launched by PM Modi in March this year for commuters to pay for different kinds of transport charges such as metro, toll tax, parking charges across India. This is also expected to boost domestic tourism.
“We are glad that the government has focused on the travel and tourism sector in this year’s budget and proposed positive steps to enhance the sector’s prospects. On the domestic tourism front, the National Common Mobility Card will add to the convenience of travellers significantly for making cross-segment payments. Hopefully, the government’s initiative will help establish India as a global tourism hub and help the sector contribute much more than the nine percent it is contributing to the GDP currently,” said Varun Chadha, MD and CEO, Tirun.
The minister also stressed on the need to develop India’s inland waterways to shift from road and rail-based cargo and use the rivers for cargo transportation. According to Nalini Gupta, head of Costa Cruise India this idea can benefit and help boost coastal tourism in India by providing opportunities like Varanasi-Haldia route which can also be used for river cruises to promote inland waterway tourism to domestic and international tourists.
“The union budget has made the aviation sector more conducive for increased FDI by proposing to increase the FDI caps. This will attract increased interest in the Indian aviation space by enabling controlling stake for foreign carriers and should add increased momentum to the Air India privatisation process. The success of the AI privatisation process is crucial to the health of the Indian aviation space as we can’t afford another airline bankruptcy after the jet airways event,” said Balu Ramachandran, senior vice president, Cleartrip.
“This Union budget is not only pro-working class, but also pro-development and growth. Tax exemption of upto INR 0.5 million is a huge benefit. Increased FDI in key sectors like aviation will help boost the sector. Rationalisation of multiple labour laws and making India hub for the manufacturing of electric vehicles is a positive step,”said Vijay Dewan, MD, Apeejay Surrendra Park Hotels & Chairman, CII, West Bengal State Council.
However, a few of them felt that their demands of revision of GST rates and boost for foreign exchange related travel earnings remained unanswered and the high prices of the crude oil and fuels may affect the tourism sector. “The Indian travel and tourism sector which has emerged as a key growth driver and is one of the biggest employment generators did not see any concrete provisions in this Union Budget,” said Dewan while adding how the industry’s demands of free visas for five years and competitive GST rate had not been met.
“There was no specific mention of fund allocation for UDAN, the regional connectivity scheme which is disappointing given it needs special attention to boost domestic travel which has seen some headwinds over the last few months. While the single quarterly GST for those with revenue less than INR 50 million is a welcome move, further simplification of the GST, including centralised registrations under GST laws to bring compliance burden down for the e-commerce and services sector is required,” said Deep Kalra, founder and group CEO, MakeMyTrip.