The Hotel and Restaurant Association of Odisha (HRAO) has suggested the Central Government to allocate adequate resources and incentivize the Tourism and Hospitality sector in the Union Budget 2023-24 for the overall development of tourism infrastructure in the country.
In a letter to Union Finance Minister Nitmala Sitharaman, enumerating the industry’s budget expectation, Chairman HRAO J K Mohanty said ‘Tourism’ has been identified by Prime Minister Narendra Modi as one of the 5 key pillars of the country’s economy.
The sector, which was badly affected for over the last two years on account of the Covid-19, is gradually bouncing back due to resumed travel and bookings. At this critical juncture, favourable policy in the forthcoming Union Budget will go a long way in giving a boost to the sector which accounted for 8% of the total employment in the country (39 million jobs) in 2020 before the onset of the pandemic.
“By 2029, it is expected to account for about 53 million jobs, while the travel and tourism sector’s contribution to the GDP is expected to reach USD 512 billion as per the World Travel & Tourism Council’s Economic Impact Report, 2022,” said Mohanty who is also the Chairman of FICCI Domestic Tourism Committee.
To give competitive advantage to tourism sector vis-à-vis the South-East Asian neighbours and augment employment in service sector, the HRAO has submitted a list of 8 suggestions before the Union government for consideration in the Union Budget 2023-23.
Firstly, Mohanty said, Tourism sector should be declared a ‘priority sector’ and accorded Infrastructure Status by the Central Government. “Uniform industry status across the country will facilitate access to long term funds at suitable interest rates. This will attract private capital in hospitality to create all India jobs and build quality accommodation supply. Moreover, the threshold investment of Rs 200 Cr, or more, to build a hotel in order to attract Infrastructure Status should be brought down to Rs 10 Cr to give fillip to budget segment hotels,” he said.
Secondly, the HARO has suggested that hotels should be charged power rates as applicable to Industries. Thirdly, GST be rationalized at 12 % across all hotel categories and room tariffs for enabling competitive edge to the sector.
Mohanty said waiver of Minimum Alternate Tax (MAT) for two years (April 2023 to March 2025) has been suggested for the “survival and growth’ of tourism sector in India.
Increase in the term of ECLGS loans for the hospitality sector to 15 years by banks forms the fifth suggestion advanced by the hotellier’s body.
HARO has also urged the Union Finance Minister to bring about modifications in the Leave Travel Allowance (LTA) rules to include the amount spent on hotel stays to be considered as LTA expense in order to increase traffic of domestic travelers, along with incentivizing infrastructural investment.
Finally, the HARO has suggested the restoration of the benefits to hotels under the Service Exports from India Scheme (SEIS) for at least 5 years beyond 2019-20 and maintaining hotel reward points under the Scheme at 5%.
“The travel trade is optimistic that the government will give special focus to tourism and various attractive incentive schemes to be introduced in the Union Budget 2023 for the development of tourism infrastructure across the country,” Mohanty added.