Budget 2021 expectations: Formalise wedding industry with RERA like framework, create tourism circuits for wedding destinations
Updated: Jan 30, 2021 4:44 PM
Union Budget 2021: Over the past few years, several organised wedding planning aggregators, digital wedding services, etc have mushroomed across India, thereby, driving transparency, standard procedures, implementing written contracts and quality.
Encouraging and enabling technology for small and local businesses has the power to accelerate digital transformation of the industry.
By Sandeep Lodha
Budget 2021 expectations: Across India, weddings are a significant milestone, deeply rooted in traditions and culture even today. Right from the venue to the décor, the ensemble to the food, couples and their families pay immense attention and invest in every minute detail to make this auspicious day memorable. To put things in perspective, in the pre-covid world, an average wedding in the country would span 2-3 days, with multiple events, hundreds of guests in attendance, and elaborate arrangements, averaging a cost of 2.5-3 lacs. However, in 2020, the COVID-19 pandemic transformed the ‘big fat Indian wedding’ into a ‘small & intimate affair’, with average guest lists comprising merely 60-100 guests owing to social distancing norms, in line with the government protocols across different states.
Budget 2021 expectations from the wedding industry
Since times immemorial, when a wedding was scheduled to take place, the entire village would come together, lend a helping hand and ensure all preparations were nothing short of perfect. However, with changing times, the emergence of nuclear families, migration to urban cities, and career-oriented millennials, the wedding industry has a new untapped consumer base to cater – modern Indian couples.
Today’s millennial couples take the onus of organising, planning and budgeting for their own wedding, as opposed to families being the key decision makers previously. While these couples are immensely involved in the planning process, these contemporary couples are short on time, prefer one-stop-shop solutions, rely heavily on technology, and digital offerings. In my perspective, while the consumer has changed over the years, the wedding industry has been resistant to evolving, therefore, it still remains a largely unorganised sector.
Wedding industry Budget 2021 expectations
As we know it, in India, this sector is defined by its highly competitive nature and involvement of several ancillary participants such as photographers, decorators, makeup artists, caterers, among others. As per a report published by KPMG, India’s current wedding market is estimated at $50 billion, accompanied by a rapid annual growth rate. Thereby, making it one of the biggest contributors to the travel and hospitality industries. However, as mentioned, it continues to be largely dependent on informal contracts and inconspicuous verbal agreements. This acts as a great barrier to the formalisation and growth of the sector. It is also highly unreliable for many couples who face several inconveniences, mainly due to the absence of a written/legally binding contract between vendors and consumers.
For instance, sometimes, vendors fail to deliver on their verbal promises, such as last-minute cancellations, offering low-quality products and services, as well as many inconsistencies in payment terms, leaving consumers with little to no option to rely on their vendors, solely based on mutual trust. At times, vendors tend to quote exorbitantly high rates and promise world-class services, but fail to deliver on quality.
Budget 2021 expectations: Digital wedding services on the rise
On the bright side, over the past few years, several organised wedding planning aggregators, digital wedding services, etc have mushroomed across India, thereby, driving transparency, standard procedures, implementing written contracts and quality.
In the long run, such startups and companies will help formalise the industry and in turn, generate more demand and steady revenue streams, while offering consumers value for money and assured great experiences. This will also give a great impetus to the government, who will benefit from the organisation of the sector.
As we step into 2021, the industry is on its path to recovery from the effects of COVID-19. In this sense, the Union Budget 2021 can be truly reformative for the hospitality and wedding industry. As a part of the ecosystem, and a tech-enabled wedding company, we propose two main suggestions for the recovery of the sector in 2021:
1. Expectations of financial aid by allowing GST relief for the sector: We urge the government to support the sector, specifically, small and medium scale businesses by offering a minimum reimbursement of 25% of the GST or as an alternative, allow an equivalent credit amount. Such support by the government will aid small and medium-sized hotels to run their operations and recover from the losses that occurred due to the COVID-19 lockdown.
Additionally, if the budget lowers the GST requirement from the present 18% to 5% in the long run and 2% in the short-term for banquets as well as other supporting services, it would come as a huge relief for both – business owners as well as consumers.
2. Organising the highly unorganised wedding sector: Further, there is a pressing need to formalize the sector. By establishing an orderly system, the government will be levelling the field, giving competitors across the board a fair chance to put forward their services in a meaningful and more transparent manner, thereby benefiting consumers.
For instance, RERA protects the interests of home buyers and boost investments in the real estate sector, whereas, IRDA protects the interests of the policyholders, regulates, promotes and ensures orderly growth of the insurance industry. We urge the government to create such a framework for the Indian wedding industry so that consumers can be treated fairly as well as encourage formal investments in the sector.
Finally, encouraging and enabling technology for small and local businesses has the power to accelerate digital transformation of the industry. It will enable customer convenience, increase demand on the digital front and ensure that customers have access to the most suitable services in their choice of destination.
In addition to the above, relaxation of restrictions for hotels and banquets, ensuring single-window clearance for local entrepreneurs in the hospitality sector, tax rebates for consumers to increase spending power, and creating tourism circuits across important tourist or wedding destination locations like Jaipur, Goa, Lucknow, etc. will fastrack the recovery of the wedding industry in India.
We have immense faith in the government and are confident that Budget 2021 will help us turnaround the downturn brought about by COVID-19.
The columnist is CEO – OYO’s Weddingz.in. Views expressed are the author’s own.