Budget 2021 Expectations: Amendment in Constitution, 4 policy changes key for Tourism sector to become Atmanirbhar

Union Budget 2021-22 Expectations for Travel and Tourism: The never-seen-before Coronavirus pandemic has cast a shadow on the “Travel and Tourism industry” and taken a toll on the Indian economy. As domestic and international travel plans are shrouded under a veil of uncertainty, a new-normal model is required for the revival of the tourism sector. The Indian tourism market needs the convergence of industry and the government. The Indian tourism market needs to use this opportunity to cater to the domestic needs of the population and create and advertise domestic tourist destinations to help increase tourist footfall, industry body Confederation of Indian Industry (CII) has said in its recommendations ahead of the Union Budget 2021. It has recommended the following steps:

1. Fixed Costs are required to be charged only for the period (pre and post-Covid pandemic) when the hotels were and are functional and operational. Currently, hotels are charged with Commercial Tariff (Highest Tariff Bracket) and Industrial Duty (Highest Duty Bracket). Therefore, fixed costs should be waived off for the period of lockdown. This includes Heat, Light, Power (HLP), gas etc. Post lockdown, for the sustenance of business, it is suggested to reduce the HLP rates by 50 per cent, the CII said in its recommendations ahead of Budget 2021.

Also Read: Budget 2021 Expectations: Hit by Covid, tourism can still play key role in achieving $5 trillion economy dream

2. A deferment for twelve months of all statutory dues at the state government level like the excise fees, levies, taxes, power and water charges, deferred renewals periods for all permits, licenses, bank guarantees & security deposits across the tourism, travel, hospitality and aviation industry.

3. Utility Payment: Ahead of Union Budget 2021, CII has recommended exemption towards paying the electricity duty, 50 per cent reduction in connected load charges, reduced rates on gas and water charge, and utilities can charge on residential unit rates and not commercial pricing to save on operational costs for the establishment

4. Auto-renewal of license fees – Several licenses and permits that are going to expire during the lockdown period, and as these will not get renewed in time, a blanket exemption for 6 months is required or auto-renewal of licenses for the next one year.

A policy change regarding registration of lease document of hotels and restaurants with land revenue department is required, CII said. CII also proposed registration fees of 1 per cent of the overall lease amount payable annually from the existing 10 per cent- and one-time relation of any penalty or arrears to the hotels or restaurants whose lease agreement is unregistered till date. This would encourage most leased hotels/restaurants to register their lease deed and ensure compliance, the CII’s recommendations ahead of Budget 2021 stated.

5. Tourism to be brought under the Concurrent List

Ahead of the Budget 2021, the CII has recommended that the Tourism industry should be brought under the “concurrent list” by amending Schedule VII of the Constitution. This will help elevate the sector to a priority one on the national agenda. Its introduction will alleviate the problems of the overlapping of administration and regulation of this sector that is hampering the ease of doing business. Tourism would benefit by being placed under the concurrent list to create a more enabling and cohesive approach in formulating policy measures. It would be ideal for each state to remove certain regulatory and licensing requirements that are currently in place to ease the cost and process of doing business. Thus, a more defined approach will be adhered to for the tourism sector, which would be driven by the unique needs of each state. Therefore, including tourism in the Concurrent List will enable the Centre and States to effectively legislate and demarcate clear roles for the Centre and states/Union Territories (UTs)