Budget 2021 leaves tourism and hospitality sector disappointed, FAITH

Not addressing any of the critical measures in the Union Budget 2021 announcement, has thrown the tourism, travel and hospitality industry into a state of shock and deep dismay. The industry is battling the worst in century crisis from the impact of COVID-19, revival from which will not be seen minimum for the next financial year till vaccination is fully undertaken with no observed side effects in all source and destination markets.

The union budget laid out proposals for enhancing rail, road, ports, metro lite infrastructure and Public Private Partnership (PPP) in buses, airports and ports including vista coaches in tourist routes. These infrastructure measures may boost tourism over a long term but only once they are implemented.

The first and worst COVID-19 affected industry has huge expectation from the budget in terms of direct immediate support i. e.

• Creation of a National Tourism Council of Chief Ministers headed by the Prime Minister along with the Tourism Minister.

• Corpus of Rs. 2500 cr for global branding of three tourism segments Indian MICE, Indian adventure and Indian Heritage.

• For post Covid revival it was important to bring down the 18% GST category for hotels to the category of 12% GST.

• Immediate release of SEIS for 2020-2021.

• SEIS of 10% to all foreign exchange earning members for at least next 5 years.

• Abolishment of TCS with immediately effect.

The measures to change the small companies’ capitalisation and turnover and support to single person company may boost the micro and small tourism entrepreneurs in boosting their organised state. However, the new Agri Infra Cess will be a further dampner.

While analysing the Budget 2021-22 FIATH’s Chairman, Nakul Anand said: “Lack of immediate direct support in budget has disappointed the Indian travel and tourism industry. While infrastructure measure announced in the Budget may boost tourism over long term, the opportunity for immediate support has regretfully been missed out.”

To ensure that there was an immediate national common tourism vision and revival action plan, post COVID across the centre and state, FAITH had proposed the creation of a National Tourism Council of Chief Ministers headed by the PM along with tourism minister.

There was an immediate need for common industry status across the country for the complete tourism industry by putting it in the concurrent list to organise the industry and make them post COVID ready.

To ensure that the export potential of Indian Tourism would have been realised post Covid tourism industry should have been fully recognised at par with merchandise exports, export earnings from tourism should have been made tax free and also incidence of taxes in tourism earnings should have been zero rated.

SEIS of 10% to all foreign exchange earning members in tourism should have been made applicable for 5 years to ensure a post covid recovery. The SEIS for 2020-2021 should have been released immediately.

FAITH Associations were also looking forward to GST policy issues in tourism being addressed. For post Covid revival it was important to bring down the 18% GST category for hotels to the category of 12% GST. There was a need for providing an option of GST at 12% to restaurants with full set offs.

A Global Mice Bidding Fund was required to have been setup with Rs. 500 crs to restart immediately and double India’s mice share.

There was a need for 100% tax exemption and permission to write back income / TDS/ GST etc to travel agents and tour operators on their transactions when airlines windup or closedown. This would have protected them and also Indian consumers.