In the Union budget for 2023–2024, tourism is singled out as one of the main sectors contributing to the overall economy of the country.

Finance Minister Nirmala Sitharaman said that the sector offers huge opportunities for employment and entrepreneurship, in particular for young people, and stated that the promotion of tourism will be carried out in a missionary mode with the active participation of states, the convergence of government programs and public-private partnerships.

Out of the total Rs. The Ministry of Tourism has been allocated 2,400 crores, the bulk of the spending is Rs. 1,742 crores have been allocated for the development of tourism infrastructure, and the amount is Rs. 242 crore for promotion and branding.

The cost is Rs. 1412 crores has been allocated for the Swadesh Darshan scheme, the flagship scheme of the Ministry of Tourism.

The ministry has planned an allocation of Rs. 229 crores for tourism infrastructure, promotion of the northeastern states in line with this year’s budget allocation.

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Tourism-focused is considered by experts to be a huge plus for the hospitality and travel industries as they are very well connected to each other.

The push for infrastructure development in aviation, railways, waterways and roads will also boost travel and tourism in India and beyond. In addition, 50 developing tourist destinations are expected to attract more foreign tourists to the country.

Ritesh Agarwal, founder and CEO of OYO Group, said: “The 33% increase in capital investment in infrastructure and the Urban Infrastructure Development Fund (UIDF) will have a multiplier effect. The announcement of a capital expenditure of Rs 2.40 billion for the railway sector, the addition of 50 airports, helipads, waterfields and advanced landing sites will give further boost to the overall infrastructure, leading to improved connectivity across the country and the development of domestic travel and tourism. “

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Nishant Pitty, CEO and co-founder of EaseMyTrip, said: “Themed travel itineraries and the introduction of Unity malls in the states to promote locally produced goods is another step that will lead to a revitalization of the tourism industry, along with providing many opportunities for job creation and entrepreneurship. Moreover, the introduction of new income taxes will provide people with new and better opportunities to travel and discover the rich diversity of India.”

Notably, the government has identified tourism as one of the key sectors with huge potential to create jobs for young people, and reaffirmed the government’s commitment to promoting tourism in “mission mode”.

“We applaud the move to develop 50 cities across India as a complete package for domestic and international tourism, and the development of an app to ensure that all key travel and tourism related metrics for said cities are updated regularly. We also applaud the states’ initiative to establish “Unity Malls” in their most popular tourist destinations to promote GI, Made in India products and handicrafts,” added Agarwal.

Rajesh Magou, co-founder and CEO of the MakeMyTrip group, also stressed that the budget includes several long-awaited initiatives such as reviving 50 airports, building 50 new destinations, and high budget spending on railways, roads and highways, which will help the long-term growth of domestic travel and tourism industry.

However, Magov also stressed that “the budget proposal that will negatively impact the industry is a move to increase TCS’s mandate from 5% to 20% for overseas tour packages. This will not only increase the initial cash outflow for customers, but will also give foreign online travel booking platforms an unfair advantage over travel agents and tour operators in India.”

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Sabina Chopra, co-founder and chief operating officer of corporate travel and head of industry relations at Yatra Online, stressed that the travel and tourism sector has been hit hard during the pandemic, so the industry was expecting more help from the government for an accelerated recovery.

“Increasing the price of ATF by 4% will increase the burden on airlines, which will affect the end consumer. However, on the other hand, the announcement of the highest ever railway cost of Rs 2.4 million will help boost affordable regional connectivity and freight logistics. The construction of 50 new airports, helipads and advanced landing pads to improve regional air connectivity will give a huge boost to niche segments such as religious, spiritual and health tourism, making it easier for passengers to travel to work,” Chopra added.

Aloke Bajpai, co-founder and CEO of the ixigo group, stressed that the tourism industry has made a phenomenal recovery in 2022, and the next goal should be to encourage a faster resurgence of foreign tourists and international travel.

“The opening of Unity Malls in state capitals and popular tourist destinations will mark tourist spots, monuments, and visitor destinations, further elevating the sector. The construction of 50 new airports will improve regional air connectivity and benefit travelers from Tier 2 and Tier 3 cities that are experiencing significant growth in air travel demand, as well as those who are flying for the first time since travel restrictions were eased.”

Bajpai also stressed that while these initiatives will benefit domestic travel in the long run, overseas holidays could become costly for Indian travelers as TCS for overseas tour packages increases from 5% to 20%.

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Bajpai added that higher costs for Indian travelers due to the increase in tax could affect demand for international travel, which is slowly picking up.

Experts from the hotel sector have noted some relief, which they expected in the budget.

Chander Balji, Chairman and Managing Director of Royal Orchid & Regenta Hotels, said: “Tourism is in some way the focus that has been needed for a long time. The focus on Bharat Deho is commendable as it is an initiative that will push Indians to explore India and see their country like never before.”

“However, there are several areas, especially in the hospitality industry, that have been overlooked. No long-term loans, and no industry status that we have been asking for for years,” Bulgy added.

“Although tourism has been recognized as one of the engines of the economy, the proposed 50 additional airports will certainly help the industry, but they will take another 3-5 years to build. The same can be said for the 50 destinations that will be selected. It will take a very long time, maybe even five to ten years, before it is completed,” Bulgy stressed.

Rajesh Ganshani, Indian Subcontinent Business Development Director, STAAH, added that with the country’s sheer size and diversity of offerings, the tourism sector is poised for growth.

The integration of technologies such as the centralized travel app is expected to improve efficiency and convenience for both travelers and businesses. This could not only spur an increase in domestic travel, but also attract foreign visitors looking to experience India’s rich cultural offerings.

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