Expert Opinion on Union Budget 2019 Expectations: The key to the success of the Incredible India programme lies in a robust hospitality ecosystem and right policy support.
By Roop Pratap Choudhary
Union Budget 2019 Expert Opinion: Total contribution by travel and tourism sector to India’s GDP is expected to increase from Rs 15.24 trillion (US$ 234.03 billion) in 2017 to Rs 32.05 trillion (US$ 492.21 billion) in 2028. Hospitality being the backbone of tourism is the biggest contributor to India’s tourism GDP and is one of the biggest employers of the skilled and unskilled workforce. Although last year’s Union Budget was a setback to India’s promising Hospitality industry, this year we are expecting much more attention, favourable policies, fund allotments and better tax reforms.
The key to the success of the Incredible India programme lies in a robust hospitality ecosystem and right policy support. Since the Hotel industry is the key component of Travel and tourism, the upcoming budget should rationalise GST. Till date, we are taxed three times more under GST as compared to other overseas markets. Although higher tax slabs on five-star hotels have put the top line under pressure but tax reforms such as replacement of the concept of the declared tariff with the actual transaction or actual tariff for calculating the GST on hotel rooms can boost industry’s confidence to passionately contribute in the growth of both inbound and outbound tourism.
Also, there is a dire need for uniformity of taxes. There are 2 major taxes on different categories of rooms viz 18% and 28%, which should be reduced to a uniform tax of 5%. This will act as a breather for the consumer as well as for the hoteliers and will increase the influx of guests. This will further support the new emerging hospitality trends such as palatial luxurious hotels and heritage forts and resorts in India. GST refund is also a big concern for the industry and must not be delayed for more than 30 days.
We are seeking for positive measures such as the introduction of tax incentive scheme for making the investment in hotels. The upcoming budget also needs infrastructure allotment to support the growth of aviation, hotels and other tourism logistic industries in the country. In addition to generating tourism revenue, hotels are also a great source of employment and upliftment for the local communities they operate in and around. The upcoming budget should bring in reforms and subsidy so that these hotels in small cities and remote locations can create and nurture larger employment generation avenues and ensure scalable contribution to Skill India initiatives.
The author is Managing Director of Noor Mahal and Jewel Group of Hotels