Indian Market & Trends

Budget 2017: Tourism industry reactions

DELHI: The Union Budget for 2017-18 spent barely three minutes on the tourism sector directly.

The travel sector, especially its infrastructure fared better as large fund allocations have been made for infrastructure.

For more on the Budget, click here

Here are reactions from the sector:

Vishal Suri
Managing Director SOTC Travel

The Union Budget for 2017-18 would help to boost the rural, infrastructure and industrial sectors. The Budget focuses on a long term growth in 10 strategic areas. The measures announced for agriculture, housing sector, infrastructure, financial services are expected to create demand in mid to long term in the economy. Thrust in the area of youth education, online courses etc. are expected to increase the quality. Government’s focus on JAM (Jan Dhan, Aadhar and Mobile) is a welcome move. Series of initiatives on digital payment is expected to bring efficiency in the collection and is positive for the formal sector. Income Tax benefits announced for income up to ₹5 Lakh annually is a positive move.

Tourism is an important part of the global economy and a significant employment generator. Five special tourism zones will be set up in partnership with the states. The Incredible India’s second campaign will be launched across the world. The Government’s initiative on digitisation and governance is expected to improve transparency and ease of doing business; is positive for the formal sector. The ban on cash transaction over ₹3 lakhs is a welcome move and it is expected to provide a level playing field. Focus on railway security and up gradation of services is expected to give boost to rail tourism. Measures to control defaulters as announced in the budget, was the need of the hour. Development of tier 2 airports through PPP mode will give boost to the travel from these areas.

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Mahesh Iyer
COO, Thomas Cook (India) Limited

“This budget has very little to offer to the tourism industry, but with plans to launch Incredible India 2.0 as the next phase of growth for domestic tourism with respect to India, there is something to look forward to. India has a vast railway network and the recently announced Railway Budget acknowledges the strength of this. One of the biggest announcements is the withdrawal of service charge on rail tickets booked through IRCTC.”

“This will not only lead to more bookings but will enable the consolidation of a digital economy. Another significant development is the emphasis on safety and sanitation, by introducing bio-toilets, which will increase passenger comfort. It is also encouraging to note the measures that will be incorporated to make the Railways friendlier for the disabled. With emphasis on a Digital Economy, by introducing measures like elimination of service charge while booking rail tickets on IRCTC, launching DigiGaons to facilitate employment & skilling, and even augmenting transactions done via the BHIM app; the Finance Minister has laid out a path that directs the country towards digital transformation.”

“These are signs of a progressive growth story and we are confident that the steps charted in the Budget will act as catalysts for change and thus move people from the unorganized sector to organized sector. Having said that , from my point of view this budget is a subdued one.”

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Subhash Goyal 
Chairman, Stic Travel Group
“We are hugely disappointed and were expecting a relief on the 9% levy. The mention of special tourism zones is nothing new and was mentioned in the last budget as well. Launching the Incredible India campaign in its second phase is good but it is of little use when the end to end infrastructure in the country is not taken care of. We are lagging behind the other countries like Thailand and Malaysia and much more needs to be done to boost tourism,” he told The Economic Times.

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Rakshit Desai
Managing Director, FCM Travel Solutions
“I believe, the Union Budget provides a good perspective on building a stronger ecosystem by focusing on development of key aspects such as rural areas, infrastructure and poverty alleviation. The year 2016, overall has been a good year for both tourism and hospitality. The industry contributes close to 7.5 per cent of India’s GDP and has been a key contributor to the Indian economy. With an objective to clearly give a further impetus to both domestic and inbound tourism, we feel the strategic vision for ‘The Incredible India 2.0’ campaign announced by the finance ministry is a positive step. This kind of support from the government goes a long way in creating awareness and should further help India get a distinct competitive edge vis-à-vis other destinations.”

“Connectivity is a very significant feature in tourism. The budget this year focuses on building infrastructure with significant investments in roads, railways and airports in Tier II cities to boost regional connectivity to far-flung areas. This we believe will encourage tourists to visit more places in their local vicinity or within India itself.”

“Meanwhile, the overall trickle-down effect of reforms in the budget is likely to benefit the common man in the near future and last but not the least, the clear agenda to transform, energise and clean India, will be appreciated by one and all.”

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Dinesh Agarwal
Founder and CEO, IndiaMART.com

“The budget 2017 has laid a foundation of an enterprise and business pro India. Important factors to boost GDP are thought of the Union Budget 2017. Most important elements such as young demographic dividend, skill development, women employability, digital education, transport have been well accounted for.”

“Also, it is reflected that the burden of taxation is more evenly split with all demographies of the society.”

“It is a good year for SMEs, India’s backbone given the direct and indirect reforms announced for them. 5 special tourism zones will enhance MSME development and bolster schemes for employment in textile, transport, agriculture, leather and hospitality sector.”

“The SMEs in pharmaceuticals and logistics are bound to experience accelerated growth as Healthcare hold high on Arun Jaitley’s agenda in the Budget 2017. Ease of Doing Business for SMEs will thrive with push for infra in digital economy, Aadhaar-enabled payment systems, m-wallets and digital payments.”

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Ritesh Agarwal

Founder & CEO, OYO
“The launch of the Incredible India 2.0 campaign will result in greater tourist interest and inflow from overseas, creating a huge demand and opportunity for the Indian hospitality industry. The proposed creation of 5 special tourism zones in partnership with state governments will also provide excellent fillip to domestic tourism. It is encouraging to note the government’s focus on infrastructure development as it forms the backbone of tourism and hospitality sector. Furthermore, reduction in tax rate for SME and the push towards digital economy by de-incentivizing cash transactions will support new-age businesses and start-ups.”

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Aji Nair

Chief Operating Officer, F&B Division, Mirah Hospitality 

“Budget 2017 proposes to lay a brighter road for the hospitality segment with the announcement of the Incredible India-2 campaign.  We welcome this move as it will enable the hospitality and tourism sectors collectively serve the increased inflow of tourists.

“The announcement of setting up 5 special tourism zones will also attract more traffic. These special tourism zones would be created as Special Purpose Vehicle (SPVs) in connection with the state government which again is a positive move for the industry and indicates a high potential of increase in job opportunities.”

“Extending tax holidays for start-ups upto 3 years of the first seven years will attract more entrepreneurs to the hospitality sector. Overall, the budget would bring back the lost sheen to the segment.”

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D Sudhakara Reddy,
Founder & National President, Air Passengers Association of India (APAI)
“The Finance Minister had done a fine balancing act with the Union Budget. He should be complimented for presenting a budget, which among other things, has laid emphasis on infrastructure development including aviation sector.”

“The budget proposal to enhance infrastructure outlay to the record level of 3.96 lakh crore is commendable and will give a critical push to the sector. A sizeable chunk of this allocation should go to aviation sector.”

“Focus on airports in tier-II cities, coastal economic zones, introduction of five special tourism zones, emphasis on last mile connectivity etc will augers well. However, the stress should be on implementing these projects on time.”

“Adoption of public private partnership model, emphasis on cleanliness will go a long way in meeting the aspirations of the people and in unbundling development stimuli. Particularly, the proposal to amend Airports Authority of India (AAI) Act will pave the way for more meaningful public private partnership in the civil aviation sector. This is critically important since some of the airport projects are stuck on account of procedural delays, lack of interest shown by the bidding partners etc., Coupled with these, an early roll out of the regional connectivity scheme is critically important. This initiative will provide for strong hub and spoke model for ferrying air passengers to different economic and tourist zones across the country.”

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Peter Kerkar
Director, Cox and Kings
“Road and rail infrastructure are crucial in terms of boosting tourism as these are widely used mode of transport in India….Stepping up the allocation for national highways, announcement to launch dedicated trains for pilgrimage and service charge withdrawal on booking of rail tickets are welcoming moves” (via Business Standard)

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Gautam Adani, Chairman Adani Group
Gautam Adani, Chairman Adani Group

Gautam Adani
Chairman, Adani Group
I see this year’s budget in the backdrop of fragile global economic condition and continuing uncertainty. Amidst this backdrop, India is considered to be a bright spot by international agencies including IMF, UNCTAD and others.

The Government has clearly shown it’s resolve in continuing to provide resources to rural India on three dimensions viz. agricultural front – by enhancing the crop insurance allocation and Model contract farming law plus targeting higher credit availability for the sector; on the rural employment front, by enhancement of over 26% to MNREGA and on Rural Infrastructure front – a massive push to PM Gram Sadak Yojna, PM Awaas Yojna, rural electrification allocation as well as Dairy processing infrastructure fund.

These measures will enhance the public spend on the rural front and help the Government fulfill its target of enhancing quality of life for the underprivileged in rural India; in combination with increased allocation on Swach Bharat, Skill enhancement, etc.

The other two notable initiatives are:

a) Integrated rail, road, airport and water way infrastructure with a total spend of Rs.2.41 lac crores; keeping in focus redevelopment of railway stations, 700 km of additional railway lines, airport up-gradation in tier-2 cities with PPP model, 2000 kms of coastal road linking with major cities and Ports and development of multi modal logistics parks.
b) Affordable housing by assigning “infrastructure” status.
All these initiatives are taken with adherence to fiscal discipline which shows the Government’s ability to balance growth with prudence.

All in all, growth for the rural and underprivileged – build-up of infrastructure in Urban India, affordable housing, fiscal prudence and most importantly more money in the hands of honest tax payers. A refreshing approach towards growth through prudent budget measures.

Musafir Namah Bureau

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