Budget 2022 | Hotel Associations and Hoteliers Reaction to FM Sitharaman’s announcements
Budget 2022 | Hospitality sector has suffered immensely due to the pandemic. The Hotel Industry in India needs immediate measures to support the pandemic-battered industry. Therefore, here are reactions From Hotel Associations to Hoteliers inputs
Budget 2022 | Hospitality sector has suffered immensely due to the pandemic. The Hotel Industry in India needs immediate measures to support the pandemic-battered industry. Therefore, here are reactions From Hotel Associations to Hoteliers inputs on allocations announced by the Finance Minister Nirmala Sitharaman.
Mr Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI)
“Though the Budget has been gravely disappointing, the extension of ECLGS with additional allocation to the crawling hospitality sector and provisioning an outlay of Rs.2 lakh crore through CGTMSE are the only relief measures provided as part of the Union Budget 2022-23. The special allocation through ECLGS will support the struggling sector to mitigate some of the pandemic-induced challenges and the CGTMSE scheme is expected to facilitate additional credit of Rs 2 lakh crore for micro small enterprises and expand employment opportunities. This move has come as a result of the multiple representations and extensive meetings FHRAI held with the authorities since the start of the pandemic. The Hon’ble FM acknowledged the massive losses incurred by the sector. However, this is just a drop in the ocean for a sector that has been severely battered. Given the massive damages that decimated the entire sector’s ecosystem, these measures are not adequate to bridge the losses and offer impetus to the hospitality and tourism industry. The number of meetings we held with the Finance Ministry and other ministries led us to believe that they were surely going to announce some sort of specific relief for the industry but it is a huge disappointment that it has not come through. We had requested the Hon’ble FM to allow domestic travel for individuals and corporates to be a deductible expense in their IT returns. Inclusion of Hotels and Tourism related sectors in the National Infrastructure Pipeline (NIP), Infrastructure status and Industry status for the Hospitality industry and allowing Input Tax Credit (ITC) for restaurants. These are equally crucial requirements for the hospitality industry. The industry has been requesting long-term credit facilities in view of the vulnerabilities and the time it would take for businesses to resume normalcy,”
Ritesh Agarwal, Founder & Group CEO, OYO
“The Budget, presented by Finance Minister Nirmala Sitharaman, is progressive and growth-oriented. I see it in three words – innovation, inclusivity and infrastructure. It will help in India’s progress towards its aspiration of a $ 5 trillion economy. The focus on start-ups, which have emerged as drivers of growth for our economy, was evident. The extension of incorporation period for eligible start-ups will certainly give a boost to this segment. Hospitality services by the small & medium sector are yet to bounce back, and the Finance Minister’s decision to extend the ECGL service for this sector up to March 2023 expanding the cover by ₹50,000 cr is a welcome move.
The budget also puts a huge focus on infrastructure and logistics which is a welcome development and ensures that the economy continues to witness not only revival but also show robust growth in the long run. Steps such as e-passport issuance will strengthen overseas travel and expansion of highway network by 25000km and contracts of 8 ropeways under PM Gati Shakti to develop seven engines will also benefit domestic travel.
Relief to the small businesses and startups through the recent future (Amrit Kaal) is reassuring and these, coupled with steps taken towards digitalization (Drone Shakti, Digital University, Digital Banking and Payments, EVs, Launch of 5G) and Web3.0 (Digital Rupee) will provide new opportunities for young emerging India. Focus on upskilling employees and allocating resources to invest in new technology is the need of the hour and we are happy to be partners in this initiative.”
Mr. Vineet Verma Executive Director & CEO, Brigade Hospitality
“Hospitality & Tourism sectors have most regrettably been given the short shrift in the Union Budget 2022-23. Except for the extension of ECLGS till March 2023, there is no other announcement that could have provided the much needed succour for sectors that have been the worst hit.”
Rakshit Sharma, CEO and Director on Board – Intellistay Hotels
“We welcome the positive move of Government to extend the Emergency Credit Line Guarantee Scheme (ECLGS) up to March 2023 with an additional corpus of 50,000 crore for hospitality. Issuance of e passports will help faster revival of international travel. 400 new generation Vande Bharat trains to be brought in three years will provide better rail connectivity to various parts of the country.”
Mr Sarbendra Sarkar, Founder, Cygnett Hotels and Resorts
Extension of ECLGS scheme with additional allocation for the hospitality sector is a welcome move. As we all are aware the hospitality sector has been one of the hardest hit sectors because of COVID. This will help the small and mid sized hotels overcome liquidity issues and to return to growth. The big focus on infrastructure development will also help the tourism and hospitality sector. We also welcome the announcement of the National Ropeways Development Programme.
Mehul Sharma, Founder & CEO, Signum Hotels & Resorts
“The Emergency credit scheme increased from 50k crores to 5 lakh crores, and extended till March 2023, will bring some relief to the ailing hospitality sector. However, I see only a marginal impact of the e-passport announcement. 50,000 crore earmarked for hospitality and related sectors is also a welcome move.“
Mr. Vikas Suri, Senior Associate Vice President, Lords Hotels and Resorts
“On the one hand, the Union Budget 2022-23 has proposed to extend the ECLGS as well as allocate an additional INR 50,000 crore to finance the credit demands of the hotel and hospitality sector. This is highly welcomed and appreciated by the industry. However, our industry has faced the brunt since last two consecutive years because of the pandemic, the expectation was for more direct and immediate support. Long pending demand of reduction of GST, waiver or reduction of licence fee would have aided business revival have not been addressed. Lords Hotels and Resorts is a leading hotel chain, and we will encash on the budgetary allocation for major tourism infrastructure schemes, Rs1181.30 crore, which has been earmarked for the Swadesh Darshan Scheme, and Rs235 crore for the Pilgrimage Rejuvenation and Spiritual and Heritage Augmentation Drive (PRASHAD) Scheme as we look forward to expand our hotels further ”
Abhishek Rajagolkar, Area Director Sales & Distribution South & East India, Sri Lanka and Bangladesh Marriott Hotels India Pvt. Ltd
”2022 is pegged to be the year of growth in the post pandemic era and the union budget is pertinently designed to drive this through capex, digital expansion, Make in India, and credible and conservative financial projections. With a 35% rise in allocation, the bulk of the Budget was focused on large-scale capital investment, which will spur economic activity and jobs in the country. India has already had a record export surpassing 300 billion in 2021-22. The PLI scheme, which is now extended to 5G manufacturing, Semiconductors, and solar plants, will further boost the export numbers for the country.The ECLGS will be exclusively extended for the tourism sector which will provide immediate debt servicing relief to many hotel investors.There is a specific focus on pilgrimage circuit, and investments will be encouraged in these circuits. New Taskforce to boost fledging e-gaming and animation industry will create new opportunities In Summary, the hotel industry will benefit from substantial activity in infrastructure, Pharmaceutical, and manufacturing sectors. Simplification of corporate cess will further drive spending among many SME’s and conglomerates.“
Rohit Bajpai, General Manager, Sheraton Grand Palace Indore
The Union Budget 2022-23 has reflected a development and investment orientation, with much needed emphasis on infrastructure, technology, skill development and health for the country as a whole. However, it has left India’s hospitality and tourism industry disappointed. The travel along with tourism and hospitality sectors has been the worst impacted sector due to the COVID Pandemic. Hospitality is a labor-intensive sector, employing lakhs of people Pan-India. The Hospitality industry was expecting much-needed relief and incentives from the Union Budget 2022-23 for our revival and for the smaller players who are on the brink of their business survival. The extension of Emergency Credit Line Guarantee Scheme (ECLGS) is a welcome move and indicates that the government has acknowledged the distress in the hospitality and tourism sector.
Rohit Kapoor, Chief Executive Officer, OYO
As the pandemic panic gives in to sober reflection, the economy is poised to take off during fiscal 2023. This budget by the honourable finance minister is just the shot it needed to dash forward. The past couple of pandemic-induced years have had their run. The next fiscal promises to be an uninterrupted galloping time for the Indian economy. This budget has clearly laid out the track. The finance minister has focused more on growth rather than drive consumption. The government’s plans to increase capex on infrastructure and other projects will clearly have a multiplier effect. Transit oriented development of urban centres looks very promising for us at OYO. Hopefully, this will create a very conducive environment to grow the app-based hospitality company like ours exponentially.
The tourism and hospitality sector employing at least 40 million people is integral to the Indian economy, contributing to its GDP, its foreign exchange and driving socio-economic growth. However, lending institutions have remained averse to credit and risk exposure on the hospitality projects. A priority sector lending status to this sector would have helped lower costs of funds for hospitality projects. However, the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 augurs well for this sector. Its guarantee cover has also been expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore. We welcome this move. This will help many small players cope.
It is obvious the budget has focused on high growth areas. Acknowledging start-ups as drivers for the Indian economy’s growth, the finance minister has also extended the existing tax benefits for such businesses by one more year till March 31, 2023. Some other steps announced in the budget also point towards infusing a never-before dynamism in the Indian economy. Rolling out E-Passports embedded with chips will make the Indian passport a powerful force in the world. The announcement of block-chain digital rupee to be introduced by the Reserve Bank of India is another very progressive move. The ball is now with India Inc. It remains to be seen if 2023 will prove to be a slam dunk year, as it promises to be.
Aditya Sanghi, Co-Founder, Hotelogix,
“The Indian hotel industry has taken a hit of over ₹1.30 lakh crore in revenueduring the fiscal year 2020-21. The hospitality industry generates employment for close to 4.5 crore people in India and so we welcome the decision taken by the government to extend the ECGL service towards the Hospitality industry but this may not be enough. We are looking forward to seeing some GST relief in the budget for the sector. Being a hospitality startup we also welcome the tax incentives for Startups until March 31, 2023. Startups are the backbone of a thriving economy and we are glad that the government is focused towards prioritising this sector”