Speaking to The Financial Express, tourism secretary Rathi Vinay Jha said the demand was justified as the industry had been ignored for long and a lot needed to be done to put it in shape.
For the 10th Plan, the ministry has asked for a Rs 5,500 crore against Rs 793.75 crore given to it during the Ninth Plan. “Tourism has been low on the priority list of the government for long. Interestingly, the first two Plans did not have any provision for the sector,” the secretary pointed out.
The tourism industry, which has been suffering a slowdown for some time, got a sharp blow with the September 11 terror attacks on the US which brought tourism to a grinding halt. The following terror strikes in the country further worsened things for the industry.
Foreign tourist arrival has gone down by 5.8 per cent during 2001 mainly due to the steep fall in tourist inflow after the September 11 attacks. The country received only 24,88,648 foreign tourists during January-December 01 compared to the 26,41,157 arrivals during 00. Foreign exchange earnings during 01 also slumped to about Rs 14,181 crore from the Rs 14,238 crore figure during 00.
To help the industry cope with the adverse circumstances, the ministry has asked the finance ministry to extend the exemption in service taxes given to hotels beyond March 02. The ministry has also called for a complete scrapping of the expenditure tax on hotels.