Requesting Expert’s Opinion on the Budget 2018-19

Union Budget

With reference to the union budget, I wish that the tourism industry would have received the importance it should have. There is no uniformity in policies which the industry deserves, for example, a single window clearance would have been of great help knowing the kind of difficulties faced especially by Hospitality chains like ours with multiple hotels and restaurants. Coming from a sector which contributes to 12% of Indian workforce and one of the biggest employers of unskilled and semi-skilled labour, a uniform policy that includes Single Window Clearance and reduction in no. of Licenses required for operating a restaurant would have been much appreciated.

Keeping aside the negatives, the budget also had a positive impact on the tourism industry which in turn would benefit hospitality as well. Plan to improve infrastructure at 10 tourist sites in the country and for improving facilities for 110 monuments will help in better tourist experience and give a stimulus to the travel sector. It is heartening to see the government backing up the ambitious UDAN plan with budgetary provisions for airports. In addition to connectivity there is a separate mention of expanding airport capacity by five times, which is a pressing problem, for many congested airports of the country.

The industry was hoping for a thrust on a tax relief, especially on indirect taxes for big-ticket transactions like travel and accommodation. We still lie in hope that this would be taken into consideration in months to come. An important issue that was not addressed in the budgets was the high GST rates on hotel tariff and restaurants in Hotels. With domestic travel increasing and customers spending anywhere from Rs. 2,500 to 7,500, on daily accommodation, the tax rates are a dampener on the entire sector. The restaurant industry sees removal of input tax credit as a major drawback as it impacts the profitability and forces the restaurant to look at volumes.

To sum it up, I would say that although we didn’t get the GST benefit and input credit we were hoping for, the industry sees an opportunity by the other announcements particularly the plans to increase connectivity and expand or augment infrastructure.

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