Union Budget 2021: Bits and pieces for travel and tourism sector

Updated: February 02, 2021 2:28 PM

Union Budget 2021 India: A whopping allocation of Rs 2,83,846 crore for healthcare, which is around 137 per cent higher than the last budget.

Budget 2021-22, Union Budget 2021ECLGS 3.0 will offer a credit extension of up to 40 per cent of total credit outstanding vis-à-vis 20 per cent earlier.

By S.N.M.D. Sarkar, 

Indian Union Budget 2021-22: Union Budget 2021 upholds well-planned framework to boost the travel sector. A whopping allocation of Rs 2,83,846 crore for healthcare, which is around 137 per cent higher than the last budget. This outlay also includes Rs 35,000 crore for Covid-19 vaccines, ensuring faster rollout of mass vaccination and restoring economy sooner than expected.

Amid pandemic, the budgetary allocation for the Ministry of Tourism has been slashed from Rs 2,500 crore in 2020-21 to Rs 2026.77 crore this year, in a blow to the tourism industry which is reeling from huge losses. Small tourism companies have been severely hit and were hopeful for a revival.

Tourism sector primarily has two schemes – PRASAD and Swadesh Darshan – both of which have been continued this year. A new scheme of iconic sites has also been introduced. Infrastructure is significant for tourism and this budget has talked of air connectivity to smaller cities. This will benefit tourism. The budget has included the Development of Iconic Tourist Sites/ Destinations, a new central sector scheme, which has been framed for the development of 19 identified iconic destinations in the country following a holistic approach involving infrastructure and skill development, use of technology, attracting private investment, branding and marketing.

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The tourism sector saw a slight demand increase at the end of 2020. Furthermore, greater emphasis on health infrastructure also positions India as the global wellness destination of tomorrow. However, the sector was expecting some relief measures such as treating tourism at par with the IT sector or enhancement of the ‘Service Export from India Scheme’ from the current 7 per cent. None of these measures have found a mention in the budget proposal when the pandemic hit the tourism the hardest with inbound tour operators staring at almost nil income till date with no immediate revival in sight.

A greater emphasis on debt financing, coupled with the budget’s reformist tone including measures such as higher disinvestment target, raising of farm income, sops for affordable housing and various other initiatives to give an overall boost to the economy and spurring consumption & investment.

These reforms & growth-oriented initiatives are all set to position India as an evolving global tourism hub and drive higher demand for funding propelling the NBFC sector.

Meanwhile, allowance of (One Person Company) OPC would encourage entrepreneurs to grow without any restrictions on paid-up capital and turnover. With this, OPCs have the flexibility to convert into any other type of company at any point in time.

Lastly, the feared imposition of Covid cess has been aptly missed by the Finance Minister which brings a cheer across the industries.

(The author is CEO, TravelKaroo. Views expressed are personal and do no reflect position or police of the Financial Express Online.)

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