Budget 2024 expectations: GST exemption, increased allocation high on travel, tourism and hospitality sector’s wish list – Budget News 2024

As India gears up for a full budget after the elections, the travel, tourism and hospitality industry is poised for significant growth and development. The February 2024 interim budget had already laid out a positive roadmap, with substantial increases in budgetary allocations for the ministry of tourism, highlighting a clear focus on improving tourism infrastructure.

Furthermore, the emphasis on foreign direct investment (FDI) and the development of iconic tourist centres underscore the government’s strategy of using tourism as a catalyst for economic growth.

Let’s see what the industry specialist provides:

According to Somesh Agarwal, Chairman and Managing Director of Radisson Blu Palace Resort and Spa, Udaipur, with the industry growing rapidly, strategic investments and policy changes are crucial. Simplify GST structures and addressing tax differentials will enhance the competitiveness of the sector in the global market and make tourism accessible and affordable for all across the world. In addition, providing infrastructure to hotels and convention centres in cities is crucial for investment and boosting the growth of the sector. “We urge the government to abolish the 18% GST category for hotels with high room rates above Rs. 7,500/ and merge it with the 12% GST category,” he added.

Furthermore, the new government recognizes the hospitality sector as a formal industry due to its significant contributions to national GDP and employment. A key expectation is to simplify taxation with a uniform tax rate and reduce property taxes, which will strengthen operational fundamentals and encourage strategic investments in infrastructure development. “It will be equally important to streamline regulatory processes as well. By making it easier to navigate through compliance requirements, the sector will reduce its external expenditure, thereby reducing costs and accelerating expansion efforts. We also hope that resources will be allocated to training programs that will enhance the skills of those entering the hospitality workforce,” said Aji Nair, Chief Advisor and Consultant at Mirah Hospitality.

For Nishant Pitti of EaseMyTrip, the government’s commitment to improving connectivity through new rail and port corridors, besides growing air links and airports, is infrastructure, aligns with broader economic goals. These initiatives are expected to boost the local economy and attract both domestic and international tourists.

Overall, the travel and tourism industry will benefit from these strategic initiatives as they will boost growth, employment and international cooperation.

“Now that travel in India is returning at a rapid paceit has indeed been an exciting period for Indian aviation and tourism sectors. To cater to the robust growth in travel volumes, particularly from Tier 2 and Tier 3 cities in the country, 15 airport projects have already been announced in the past quarter in key destinations. This is further complemented by the opening of new airports, new terminals being developed at existing airports and expansion of flight routes,” said Sumit Prakash, Country Director, India and South Asia, Collinson International.