New Delhi, July 23, 2024: The Union Budget 2024-2025, presented by Finance Minister Nirmala Sitharaman, has elicited a range of reactions from key players in the tourism and hospitality industry. While some industry leaders welcome the budget’s focus on infrastructure, employment, and regional development, others express disappointment over unmet expectations regarding structural reforms and policy changes.
Naina Parekh, Founder, EUME
The Union Budget 2024-2025 brings several transformative changes for the growing D2C sector. The reduction of the TDS rate for e-commerce operators from 1 percent to 0.1 percent is likely to ease their financial burdens for e-commerce businesses, allowing them to concentrate more on scaling their operations and driving innovation. The proposed removal of the angel tax is expected to be a game-changer for startups. This move could simplify the fundraising process and reduce the tax-related challenges faced by new ventures, fostering a more supportive environment for entrepreneurial growth.
Furthermore, the new eco policy framework has put spotlight on the development of tourism and regional growth in states like Bihar and Odisha. These states are projected to emerge as significant growth hubs, and this focused attention could stimulate local economies and open up new markets for D2C brands.
Pradeep Shetty, President of FHRAI
The hospitality sector has been pinning high hopes on the Union Budget for 2024- 25 presented by Smt. Nirmala Sitharaman today, on the backdrop of the Government of India’s stated vision of Viksit Bharat by 2047 and the critical role the tourism industry holds in achieving it. However, there is nothing spectacular in the budget to bring structural changes to address the fundamental challenges it faces in a competitive world order and to accelerate the growth of the sector to be a $ 3 trillion economy by 2047.
Some key demands of tourism & hospitality to revitalise the sector such as GST rationalisation, granting of infrastructure status and bringing ease of doing business and policy reforms have not been considered in the budget once again, given the well-accepted multiplier effect of tourism on employment and economy. The hospitality sector is disappointed but not dejected as the overall focus on infrastructure development, employment generation skill development and the development of religious tourism centres are the silver linings which will help the sector to tide over some of the critical challenges that it faces today. The focus of Budget 2024 on youth employment, skill development and job creation are welcome initiatives. The industry has been facing a shortage of skilled workforce, especially in the hospitality sector.
It is also laudable that the Honourable Finance Minister’s Budget speech highlights the Governments’ commitment to make India a premier global travel destination through targeted investment and strategic initiatives. Development of iconic spiritual sites along with promotion of cruise and beach tourism can be helpful in attracting both domestic and international tourists.
Sandeep Arora, Director of Brightsun Travel, India
We welcome the 2024 budget, especially the focus on boosting spiritual tourism which not only honours the country’s rich cultural heritage but also opens up new avenues for travel and tourism. The special focus on Bihar and Odisha will see extensive development and promotion of religious and historical sites such as Bodh Gaya, Rajgir and Nalanda. Odisha also has great potential as a destination for religious and beach tourism. The new initiatives to improve infrastructure and connectivity in these offbeat destinations will attract both domestic and international tourists, offering a much-needed boost to the local economy.
Jatinder Paul Singh, CEO & Co-Founder of Viacation Tourism
We warmly welcome the 2024 Union Budget, which underscores a visionary approach to enhancing India’s tourism sector. FM Sitharaman’s commitment to developing Nalanda and the Nalanda-Rajgir corridor as premier tourist destinations is a significant step in reviving and promoting our rich cultural heritage. The proposed comprehensive development of the Vishnupad and Mahabodhi Temple Corridors, modeled on the successful Kashi Vishwanath Temple Corridor, promises to elevate these spiritual sites to world-class pilgrim destinations.
The focus on transforming Rajgir into a comprehensive development hub highlights the government’s dedication to preserving and showcasing our historical and religious landmarks. Additionally, the support for Odisha’s tourism infrastructure reflects a broader strategy to leverage India’s diverse attractions, from its scenic landscapes to its vibrant cultural and historical sites.
These initiatives not only aim to position India as a global tourist destination but also to create significant job opportunities and stimulate investments across various sectors. We applaud this forward-thinking approach, which will undoubtedly enhance India’s global tourism profile and drive economic growth.
CA Krishnan R, CEO & Director, Unimoni Financial Services Limited.
“The Budget lays great emphasis on promoting tourism, especially making Indian pilgrim centres world-class tourism destinations. Developing temple corridors, connecting ancient cultural landscapes and pilgrim centres such as Rajgir, Nalanda, Odisha and southern temple cities has huge potential to attract foreign as well as domestic tourists. India’s tourism industry has attracted more than 90 lakh foreign tourists in 2023, registering a growth rate of over 40% year on year. The Budget’s continued thrust on infrastructure development and promotion of the aviation sector will have a cascading effect on the growth of the tourism industry as well. It will also rejuvenate allied industries like healthcare, hotels, transport services and money exchange services.”
Ahsan Shervani, Vice President, Star Hotels Pvt Ltd (Shervani Hotels)
We welcome the allocation of approximately ₹2,450 crores to the sector, marking a 44.7% increase from previous estimates. This funding aims to enhance employment and stimulate tourism growth which is a welcomed move. As an industry, we are still eagerly looking for a bit more rationalization in the GST structure for hotels and the grant of infrastructure status to the industry.
Kunal Vasudeva, Co-Founder & Managing Director, Indian School of Hospitality
The government’s allocation of ₹1.48 lakh crore for education, employment, and skilling, including training 20 lakh youth and upgrading 1000 institutes, is a significant step forward. For those pursuing vocational routes, this is a major win. It will help people develop practical skills and excel in their fields, bringing more youth into the formal economy. Additionally, with manufacturing bases in or near districts, there’s less need to migrate to cities, reducing mobility. Such initiatives are crucial for hyper-local job creation and boosting the manufacturing sector, driving India towards becoming a $10 trillion economy in the next 7-10 years.
The Union Budget’s provision for ₹10 lakh education loans with interest relief for higher education in India is a big win for those pursuing the academic route. Given our low gross enrollment ratio, these loans will make quality education more accessible, allowing students to choose institutions of merit. This embodies ‘Sabka Saath, Sabka Vikas,’ fostering inclusivity from the ground up. By enhancing local education opportunities and increasing our GER from 26% to at least 40% in the next 5 years, we can cultivate a skilled, competent, and agile-thinking workforce. This workforce is essential for job creation, manufacturing growth, and meeting the workforce needs across various sectors, supporting ‘Made in India for India and Made in India for the world,’ and propelling us towards becoming a $10 trillion economy in the next 7-10 years.
Akash Bhatia, CEO of Eco Hotels and Resorts Limited
“The recent budget plan highlights a game-changing vision for India’s tourism industry. Building up the Vishnupad and Mahabodhi Temple corridors, along with the extensive development of Rajgir and re-establishing the Nalanda University, will elevate India’s cultural and historical charm. We’re delighted about the assistance for making Odisha an ultimate top-spot for tourists. As one of the key players in the hotel business, it is our aim to ensure that our services will be exceptional enough to match these improvements and give guests amazing experiences that draw attention to India’s deep roots and lively culture.”
SP Jain, Chairman and Founder, Pride Hotels Group
“We warmly welcome the budget announced today by Finance Minister Nirmala Sitharaman. The government’s focus on the tourism industry, especially the development initiatives for Jharkhand, Odisha, and the North East, is commendable. The special emphasis on Rajgir and Nalanda will undoubtedly enhance religious and cultural tourism, creating new opportunities for growth and community engagement.
In 2023, India’s tourism sector attracted over 9 million foreign tourists, marking a remarkable growth rate of over 40% year-on-year. The budget’s commitment to enhancing spiritual tourism, particularly through the development of significant sites like Bodh Gaya and the Vishnupada Temple, is a strategic move that promises substantial economic benefits for the regions involved.
However, we had hoped that the Honorable Minister would grant infrastructure status to the hospitality industry. As a highly capital-intensive sector, our industry requires significant investments, and the initial 3-4 years often yield no profits due to high-interest loans from banks. Granting infrastructure status would enable us to access loans at lower interest rates, facilitating the development of more hotels and improving the quality of facilities offered. This is essential to attract both Indian and international tourists and to support the overall development of our industry.”
Snehdeep Aggarwal, Founder-Chairman, Bhartiya Group
“Finance Minister Nirmala Sitharaman’s announcement in the Union Budget 2024 is a visionary step towards transforming India’s travel and hospitality sector. The comprehensive development plan promises to create a robust framework for economic growth by enhancing iconic destinations and promoting spiritual, cultural, and natural attractions. These strategic investments will not only boost tourism but also stimulate job creation and attract significant investments. This initiative is a significant stride towards making India a premier global travel destination.”
Yogesh Mudras, Managing Director, Informa Markets in India
“Enhancing infrastructure around significant temples, pilgrimage sites, and scenic beach destinations will not only elevate the overall tourist experience but also position India as a premier global destination for spiritual and cultural journeys. These initiatives are expected to stimulate economic growth, create jobs, and attract substantial investments across various sectors. Improving infrastructure is especially crucial, as it will enhance connectivity, accessibility, and the quality of services, ensuring that visitors have a seamless and enriching experience. Furthermore, the Union Budget 2024-25 has introduced transformative measures for the cruise tourism sector, notably the streamlined tax regime for foreign cruise operators. This will facilitate smoother operations of domestic cruise vessels and significantly bolster our cruise tourism infrastructure. With a remarkable increase in cruise calls and passenger numbers over the past decade, this new policy aims to accelerate our growth trajectory.”
Ambika Saxena, CEO, TWH Hospitality
“The Union Budget 2024 has brought regional connectivity to centre stage. The strategic investment in the building of new expressways, airports, and rail corridors is going to revolutionize the scene of tourism. These developments will foster easier and quicker travel, promoting domestic and international tourism. They will bring life to the local economies by creating new employment opportunities and promoting active cultural exchange. Such new infrastructure developments are bound to entice more visitors to visit India’s diversified destinations—from vibrant urban centers to serene natural landscapes—ensuring that growth and prosperity for the tourist sector continue sustainably.”
Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited (Thomas Cook, SOTC, Sterling Holidays and TCI)
This year’s Union Budget has opened new doors to development, specifically for domestic and inbound tourism. With the focus on special development funds/ programs for the socio-cultural-religious potential of iconic temple corridors including Gaya’s Vishnupad & Mahabodhi temples into world-class pilgrim and tourist destinations (to be modelled on the success of the Kashi Vishwanath temple corridor), the Government of India’s intent is encouraging. Additionally, the comprehensive development of the Rajgir Jain Temple site; rejuvenation of the historical gem of Nalanda & Nalanda University into a major religious-tourist centre, would have a multi-pronged impact. While positioning India as a vibrant global tourism destination, it will also accelerate job creation and economic opportunities for allied sectors.
The Budget also appreciated the underleveraged potential of Odisha’s tourism industry by supporting the state’s rich heritage history, spirituality, craftsmanship and natural beauty.
Recognizing the high potential domestic cruise segment, the Union Budget announcement proposed a simpler tax regime to support/incentivize foreign cruise companies operating in India’s waters.
We’re optimistic about the significant allocation of INR 11.11 lakh crore (constituting 3.4% of India’s GDP) towards infrastructure development. The development of road, rail, air, and waterways will ensure a boost to access/connectivity and affordability, and force multiplier benefits for tourism and allied sectors.
When introduced, TCS was considered disadvantageous to salaried employees as their cash flows were negatively impacted. Post the Budget announcement, salaried employees can now avail of immediate credit of TCS paid on account of their foreign travel – against TDS on salary, enhancing the purchasing power of Indian consumers.
The discontinued SEIS scheme should have been reinstated, as this is meaningful towards encouraging inbound tourism, foreign exchange receipts, and a force multiplier for employment generation.
We are disappointed to note that key pillars in India’s Tourism agenda – Aviation & Hospitality were not mentioned as part of the Budget and both standardisation of GST rates on hotel tariffs to 12% and the reduction of ATF remained unaddressed.
