Budget 2021 Expectations: Will Union Budget 2021 boost PM Modi’s ‘Dekho Apna Desh’ initiative during Covid?

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New Delhi | December 21, 2020 11:33 AM

Union Budget 2021 Expectations for Travel and Tourism: Here are recommendations for Budget 2021 to boost the domestic tourism industry in line with the Central government's vision of "Dekho Apna Desh". The Confederation of Indian Industry (CII) has put forward a number of suggestions from Leave Travel Allowance (LTA), GST to entry tickets.

Travel Tourism Budget 2021 Expectations, Budget 2021 Expectations for Travel TourismBudget 2021 Expectations: The central government must support companies by reducing or waiving fees to participate in travel fairs and shows, other events and marketing events for a period of two years. (Image - India in Mali and Mauritania Twitter)

Union Budget 2021-22 Expectations for Travel and Tourism: From the iconic ramparts of Red Fort on August 15, 2019, Prime Minister Narendra Modi exhorted citizens in India to visit at least 15 domestic destinations by the year 2022. At that time little did he know that the Covid pandemic will change the lives of crores and hit the tourism sector. With the Union Budget scheduled to be held in just over a month’s time, the Modi government has the opportunity to boost the tourism sector at a crucial juncture. The Ministry of Tourism had launched the “Dekho Apna Desh” initiative in January 2020 to promote domestic tourism and develop the local economy by enhancing tourist footfalls.

Here are recommendations for Budget 2021 to boost the domestic tourism industry in line with the Central government’s vision of “Dekho Apna Desh”. The Confederation of Indian Industry (CII) has put forward a number of suggestions from Leave Travel Allowance (LTA), GST to entry tickets to historical places.

1. Leave Travel Allowance (LTA): According to the current rules, LTA can be claimed for travel fare or tickets within India only. Expenses incurred for accommodation, or any other fee are not eligible for exemption. To incentivize domestic tourism, the government may modify the rules and allow citizens to avail of LTA benefit on domestic tours including travel fare or tickets and accommodation for a period of two years. The central government may like to have an upper ceiling if required. The central government can provide a 200 per cent weighted exemption of all expenses to corporates on all domestic conferences, the CII said in its statement ahead of Budget 2021.

The central government must form a specialized team for homestays and village tourism development. Apart from this, the state government must expedite the registration process.

2. Goods and Services Tax (GST): The current rate of taxation on MICE, (Meetings, Incentives, Conferences, and Exhibitions), the business makes the Indian environment less competitive. It is imperative that the government provide a zero rating GST for MICE. This should be further expanded to the exports of goods and services to further strengthen India’s competitiveness in a global scale for a period of two years, the CII said ahead of Budget 2021.

3. GST on domestic Tours: The CII suggested that the government provide a zero-rating GST for bookings made on domestic travel and tours for a period of two years. According to the CII suggestions ahead of Budget 2021, the central government must look to extend or create new temporary exemptions or reduction of taxes i.e GST rates on accommodation, hotels, and restaurants, for at least for a period of two years.

4. Waive off of Entry ticket benefits: The monuments, museums, heritage tickets; national parks under the purview of any government arm may consider waiving off the entrance ticket benefits for all Indian citizens for a period of two years, the CII said in its recommendations ahead of Budget 2021.

5. The central government must support companies by reducing or waiving fees to participate in travel fairs and shows, other events and marketing events for a period of two years.

6. The central government must create special incentives to support MSME’s short-term business operations and recoveries such as incentives for digital transformation, market access, training, and hiring.

7. The central government must promote funds to incentivize the integration and disruption of supply chain stakeholders, especially the strengthening of MSMEs and digital travel tech startups.

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