The Union Budget 2023 | Reactions from Travel & Tourism sector to FM Sitharaman’s announcements
Here’s how the Travel and Tourism players reacted to the announcements made by the finance minister. Vishal Suri Managing Director, SOTC Travel Limited. The Union Budget 2023-24 presented by Hon’ble Finance Minister provides a positive focus on infrastructural development/investment, digital enhancements,
Here’s how the Travel and Tourism players reacted to the announcements made by the finance minister.
Managing Director, SOTC Travel Limited.
The Union Budget 2023-24 presented by Hon’ble Finance Minister provides a positive focus on infrastructural development/investment, digital enhancements, sustainability, agriculture, domestic tourism. We appreciate the Government’s plan of continued focus on domestic tourism, railways, new airports, heliports, water aerodromes that will improve regional connectivity and be one of the key drivers of the domestic tourism sector.
Further the announcement on the launch of an app to enhance domestic tourism experience reiterates our country’s focus on digitization. The ‘Dekho Apna Desh’ initiative focusing on sector specific skilling and entrepreneurship development while the facilitation of tourism infrastructure under the Vibrant Villages Programme, and setting up a ‘Unity Mall’ in state capitals/ popular tourist destinations to promote ‘One District, One product’ for GI products and other handicrafts will strongly support domestic tourism.
The travel & tourism industry supports one in 10 jobs and provides livelihoods for a significant number of people, therefore the Government’s support on prioritizing tourism with active participation from local authorities, sustainable practices and encouraging public-private partnerships is a positive pivot towards revival/road to recovery.
However this Union Budget did not provide the travel & tourism industry the respite we anticipated with respect to rationalization of taxes. Instead the proposals increased TCS on outbound travel and other LRS transactions from 5% to 20% without any threshold exemption. In our view, such high rates of taxation are an added liability to outbound travelers and negatively impacts tour operators recovering from the pandemic. We request the Government to reconsider this proposal.
We also hoped this budget would offer elimination of the 5 crore capping for the SEIS benefit and incentives to Corporates for organizing meetings and conference in India through partial or full tax exemptions.
Chairman & Managing Director, Thomas Cook (India) Limited
“The proposal in the Union Budget 2023, to increase the rate of TCS from 5 to 20 per cent for purchase of overseas tours & overseas remittances other than education will significantly increase the upfront cash outflow for end customers. It will drive more of these customers to use alternate channels that are outside the domestic tax net. We urge the Government to reconsider this.
On the positive side:
- Income tax rebates announced in the budget will result in an increase of disposable incomes which is welcome.
- Tourism promotion being taken up on a “mission mode”- with active participation of states, public-private partnerships and convergence of government programs will drive domestic tourism growth.
- Strong infrastructural focus in the announcement of 50 new airports, heliports, water aerodromes and revival of advanced landing grounds will enhance regional access and connectivity.
- Financial support via loans to be provided to states for developing enhanced road and rail connectivity will help uplift of the domestic tourism sector.
- The selection of 50 destinations to be developed as holistic tourism packages – combined with the focus on local level tourism & the promotion and sale of GI products & handicrafts will give a boost to local arts and artisans.”
Co-Founder and Group CEO of MakeMyTrip.
“It is noteworthy that the Honorable FM has highlighted tourism as a focus area. The union budget entails multiple welcome initiatives like the revival of 50 airports, the building of 50 new destinations, and high budgetary outlays on railways, roads, and highways, which will help long-term growth for the domestic travel and tourism industry.
However, one budget proposal that will negatively impact the industry is the move to increase the TCS mandate from 5% to 20% on overseas tour packages. This will not only increase the upfront cash outflow for customers but will also give an unfair advantage to foreign-based online travel booking platforms over India-based travel agents and tour operators.”
Co-Founder & COO, Corporate Travel & Head Industry Relations at Yatra Online Limited.
“Travel and tourism sector which is projected to hit 9.9% of the country’s GDP before the end of this decade, has suffered a lot during the pandemic so we were expecting more relief from the government for accelerated revival. The 4% hike in ATF price will increase the burden on airlines, impacting the end consumer. However, on the brighter side, the announcement of highest ever railway outlay at Rs 2.4 lakh crore will help boost affordable regional connectivity and logistics of cargo freights. The development of 50 new airports, helipads, and advanced landing grounds to improve regional air connectivity will provide a tremendous boost to niche segments like religious, spiritual & wellness tourism by easing passengers commute. Further, 50 tourist destinations being developed as a whole package for domestic and international tourism should attract more foreign tourists in the country. Overall, very encouraging to see intense focus on our sector.”
President and CEO Waterways Leisure Pvt Ltd
The budget mentions that there is a larger potential to be tapped in tourism and I personally believe that this is true and to add to it the tourism industry is growing and experimenting more than ever. Not only does tourism help the economy but also, this sector holds opportunities for jobs and entrepreneurship. As mentioned in the budget, that the states and government will actively participate in promotions for tourism in India, I think it’s a great initiative to elevate the sector and travel culture. It is a huge step that for the first time in the Union Budget , tourism is the key focus policy area. Tourism and Hospitality sectors have a huge potential to cater to the diverse nature and culture of the country and we Cordelia Cruises are happy to be catering to just that. We do have big plans for the year, starting with the Sri Lanka sails from June 2023.
Co-founder at StayVista
“Even though the tourism and hospitality industry has bounced back after taking a significant hit during the COVID-19 epidemic, we are pleased to see the sector come back into the spotlight again in the 2023 budget.
The Finance Minister’s “Dekho Apna Desh” scheme gives the sector and the villa rental category a much-needed boost. There is a clear need for the government to promote tourism in undiscovered and off-beat locations in India to avoid saturation in places like Manali, Lonavala, and Ooty.
Further, I’m delighted to see that tourism promotion will be carried out on a “mission mode” basis, with the active participation of states, the convergence of government programmes, and public-private partnerships. Instead of traveling abroad, the scheme encourages Indians to visit 50 tourist destinations across India. The budget also encourages youth employment and entrepreneurship by providing financial incentives to less-frequented destinations.“
India as a country has a lot to offer for travel experience. Infrastructure was a missing piece of the puzzle in the previous budget. This FY budget emphasizes on growth of the infrastructure, tourist destinations, airports. It has turned out to be an important aspect for better connectivity and to identify cultural sites as places of tourism.
This year’s budget will not just boost tourism but also contribute to the idea of sharing our culture, history and heritage with a larger audience. While there are many other things which can be done, this is a great start. Travel business and startups can and must take full advantage of this.
Director, Belair Travel
The Union Budget 2023-2024 presented by the Finance Minister (Nirmala Sitharaman) is a growth-oriented one and highlighted that the Indian economy is moving ahead in spite of the global economic challenges. The change in the individual tax regime with those with incomes up to Rs. 7 Lakh will now pay no tax is a good move to boost middle-class spending. I hope that the income tax exemption announced will help spur consumption in activities like travel. With the government announcing that states will be encouraged to set up a “Unity Mall” in the capital city or most popular tourist destination for the promotion of ‘One District, One product’ theme, such initiatives will help to unleash the potential vested in the tourism sector. The announcement made by FM to develop 50 destinations for domestic and international tourists will also help to boost the growth of tourism and hospitality segments. Regional connectivity is key for helping India to showcase its diverse tourism experiences. With the government’s plans to renew 50 additional airports, helipads, water aero drones, and advanced landing grounds, regional connectivity will improve strongly.
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