Union Budget 2022-23 leaves tourism industry disappointed

By BOTT Desk

Highlights of Budget 2022-23

E-Passport with embedded chip to be introduced this financial year for ease of international travel.
The PM Gati Shakti master plan for expressways will facilitate faster movement of people and goods. It is set to encompass 7 engines for economic transformation, seamless multimodal connectivity, and logistics efficiency.
A new scheme called PM Development Initiative for North East to be launched.
National Ropeways Development Programme to be taken up in PPP, to improve connectivity, besides promoting. 8 ropeway projects for 60 km to be awarded in 2022-23. As preferred ecologically sustainable alternative to conventional roads in difficult areas.
Emergency Credit Line Guarantee, which has provided additional credit to MSMEs, extended till March ’23. Guarantee cover to be expanded by Rs. 50,000 Cr. to a total cover of Rs. 5 lakh crores. Additional amount has been earmarked exclusively for hospitality, related sectors.
Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) to be revamped with required fund infusion. Will facilitate additional credit of Rs. 2 lakh crore for Micro and Small Enterprises and expand job opportunities.
Raising and accelerating MSME Performance (RAMP) with outlay of Rs. 6,000 crore over Keycap digit five years, to be rolled out. This will enable MSME sector to become more efficient, resilient and competitive
2,000 km of rail network to be brought under the indigenous world-class technology.
A new Vibrant Villages Programme to be introduced. This will bring development gains to villages on the northern border, with limited connectivity, infrastructure and sparse population. Activities to include construction of village infra, roads, support for livelihood.

G Kishan Reddy, Union Minister For Culture, Tourism And Development Of North Eastern Region (DoNER), Government of India gave the following reactions to the budget 2022.

Congratulations to Hon’ble Prime Minister Shri @narendramodi ji and Hon’ble Finance Minister Smt @nsitharaman ji for a development, growth, infrastructure & welfare centric #AatmaNirbharBharatKaBudget. pic.twitter.com/FCxt5OLPqy

— G Kishan Reddy (Modi Ka Parivar) (@kishanreddybjp) February 1, 2022

Industry Reacts to Budget 2022

The whole tourism travel & hospitality industry is feeling quite dejected. The union budget provides some relief and medium to long term infrastructure measures to stressed tourism travel & hospitality industry but there was an immediate opportunity for more direct intervention to support the highly stressed tourism travel and hospitality companies and their employees. This could have come in the form of wage support for employee of tourism travel and hospitality companies till tourism revival happens, abolishment of TCS on outbound travel, Infrastructure status to hotels, E visa fees waiver for all tourist visas till inbound revival happens, Domestic income tax travel credit for Indian citizens and Indian companies, Export status for tourism export earnings, Global bidding fund for Indian mice companies & Setup of GST review committee to re-examine the tourism travel & hospitality GST pain points.” – Nakul Anand , Chairman, FAITH

“Nothing concrete has been announced and this industry is bleeding for the last 3 years. The Tourism industry was expecting some relief to be announced in this Budget but we are really disappointed. The Government should understand that Tourism is the largest employment generator and has been contributing 9-10% of GDP and about 30 billion dollars in foreign exchange earnings. The greatest need of our country is to tackle the problem of unemployment which can only be done by supporting an industry like Tourism. About 35-40 million people have either lost their jobs or are in the process of losing them. While ECLGS has been a great benefit. Its extension till 2023 and guarantee cover extended to Rs.5 Lac Crore is a welcome step. The additional amount of Rs. 50,000 crores for the Hospitality & related industry is welcomed but it will not solve the immediate problem of survival, unemployment and bleeding of the tourism industry.” – Subhash Goyal, Chairman, Stic Group

“Our trade has been ignored once again. Our trade has suffered tremendously due to the pandemic and it was expected that the Government would atleast work towards positive upliftment of the travel and tourism in India, which they always portray as a priority. In our representations to the Finance Minister over last two months, we had requested for GST input credits be made available across states for hotels and travel-tour operators. We were also expecting to the least that travel and tourism be brought under the concurrent list for industry status.” – Jyoti Mayal, President, TAAI

“We had requested one time grant based on our 2019-20 turnover, reduction in GST, restoration and enhancement of SEIS benefit, reducing taxes on International airfares and overall reduction of taxes on Hospitality sector .Most disappointingly none of these found mention in the budget presented. There has been huge employment loss besides financial loss in our sector. Just few years ago we were earning huge foreign exchange for the government and in this hour of despair we expected some handholding by the government.” – Rajiv Mehra, President, IATO

“It was good budget as far as economy growth is concern but has been disappointing for travel and tourism sector. We had good expectations from the Budget this year, which overall has been a disappointing one. The tourism sector has once again been ignored completely. The Government has totally side-lined the trade and the only positive mention has been the E-Passport, which will facilitate international travel. There was no mention of TCS and GST, which are the biggest hindrance in the development of tourism.” – Riaz Munshi, President, OTOAI

“To say one is disappointed at today’s budget is a gross understatement. The extension of the EGCL is a paper whitewash. Only those with existing debt could use the scheme to begin with. And to make the industry take debt on debt is cruel. It does not reduce the cost as the interest clock is still clicking. The Modi government has yet again kicked an industry that is already on its knees. I am saddened for all of us in the larger tourism and hospitality space. So many people tried their best to get something for us. So many representations were made. But the truth is we simply don’t matter.” – Rajeev Kohli, Jt. MD, Creative Travel

“Budget 2022 presented by FM that is likely to see growth of 9.27% has made it clear that the current government vision of 2047 does not see the importance of industry that contributes 10% employment and approx. 8% to the GDP. Amrit Kal of 25 years under highest leadership vision disappointed tourism industry. ECLGS will not help and create another trap of loans. It is further disheartening to note that the MICE industry has also been completely ignored.” – Amaresh Tiwari, Vice Chairman, ICPB

“The budget overall is an in-depth one looking at spurring economic growth for overall benefit. With reference to the tourism industry, while the budget talks about a 20000 crores outlay…it is not clear on its allocation. the budget has ignored completely some key aspects that are hurting the industry….like wage support, and Revival of inbound tourism, TCS issue for outbound agencies. Further when so much is being said about domestic travel the least they could have done was to offer tax benefits to domestic travellers and/ or companies doing large MICE events in India.” – Vasudha Sondhi, MD OMPL Group, Co- Founder Parvada Rural Stays, Mukteshwar, Uttarakhand

“The launch of the issuance of e-passport with embedded chips is a welcome move for travel and tourism industry as it would ease international travel facilitating more people to travel abroad. In addition, the introduction of 400 vande bharat trains in the next three years is expected to assist in augment online train booking in the coming years.” – Ankush Nijhawan, Co-Founder, TBO.Com

“While there were several announcements for the infrastructure the proposed extension to the Emergency Credit Line Guarantee Scheme (ECLGS) and E-Passport seems to be the only news for tourism, which shall enhance the inflow of overseas travellers. E-passports using embedded Chips and futuristic technology shall ease the entry. More infrastructure development programs of 400 new generation Vande Bharat trains and National ropeway development taken by PPP mode shall ease commuting and promote tourism in the long way. But what about present situation to cope with the financial aids to Tour operators or for their survival has not been looked by the government? Despite best efforts from the industry eg FAITH and leaders, it looks like all went in vain. Unless there is no involvement of industry or a Task force with industry involvement in the Tourism, parliament committee shall not put any pressure on government. Open pressure is the need of an hour for the health of tourism otherwise tourism industry shall again experience ICU.” – P P Khanna, President, ADTOI

“Though the Budget has been gravely disappointing, the extension of ECLGS with additional allocation to the crawling hospitality sector and provisioning an outlay of Rs.2 lakh crore through CGTMSE are the only relief measures provided as part of the Union Budget 2022-23. This move has come as a result of the multiple representations and extensive meetings FHRAI held with the authorities since the start of the pandemic. However, this is just a drop in the ocean for a sector that has been severely battered. We had requested the Hon’ble FM to allow domestic travel for individuals and corporates to be a deductible expense in their IT returns. Inclusion of Hotels and Tourism related sectors in the National Infrastructure Pipeline (NIP), Infrastructure status and Industry status for the Hospitality industry and allowing Input Tax Credit (ITC) for restaurants. These are equally crucial requirements for the hospitality industry.” – Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI).

“Budget 2023 appears to be growth oriented by increase in capital outlay of INR 7.5 Lacs crores, fiscal deficit caped at 6.4% and efforts are being made to reduce compliance burdens and improve ease of doing business. We expect budget would enable India to achieve growth estimate of 9.2%. We welcome the new incentives of issuing of E passport and introduction of digital currency. The government’s relentless focus on national transportation infrastructure development with the PM Gatti Shakti plan will strengthen the much-needed multimodal connectivity and facilitate seamless movement of cargo, while reducing logistics costs. Having said that we were expecting tax concession to Aviation industry in the forms of cut in ATF excise duty and allocation of concessional finance to airlines to help us come out of the pandemic.” – Ronojoy Dutta, Whole Time Director and Chief Executive Officer, IndiGo

“The extension of ECLGS moratorium extension by one year for the hospitality sector will come as a breather for the hotel players grappling with burden of loan repayment and uncertainties in revenue generation. The move will bolster the much-needed liquidity to the sector which employs a large number of people. It is appreciated that inspite the revenue constraints faced by the government and its impact on the widening fiscal deficit, the government has taken cognisance of the strain the hospitality sector is going through. This will help the sector tide over the cash crunch and working capital issue.” – Kush Kapoor, CEO, Roseate Hotels and Resorts

“Finance Minister has considered the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) and its guarantee cover has been expanded by Rs. 50,000 crore to the total cover of Rs. 5 Lakh Crore. This will be a great boon for the hospitality and travel trade sector which has been adversely impacted by the pandemic for the last 2 years. This will give a much-needed boost to the sector by providing additional liquidity and helping it revive its position. The industry can now provide employment to millions of people who have lost their jobs. We welcome this announcement. This is a good budget for the hospitality and tourism sector.” – S P Jain, Managing Director, Pride Hotels Ltd.

“In her budget speech the Hon’able Finance Minister setout “Amritkal” being positive for the growth of the country, we feel that this is not Amritmanthan but “Mahapralaya” – dissolution of the travel and tourism trade in India. Our appeals to the government to liberalise taxes and grant tax holidays on GST for boosting travel and tourism has being ignored. Further, he stated that, it was also expected that earnings from inbound travel would have been supported by Export Status, which would have enabled trade growth enhancing the economy.” – Jay Bhatia, Vice President, TAAI

“Extension of ECLGS scheme with additional allocation for the hospitality sector is a welcome move. As we all are aware the hospitality sector has been one of the hardest hit sectors because of COVID. This will help the small and mid-sized hotels overcome liquidity issues and to return to growth. The big focus on infrastructure development will also help the tourism and hospitality sector. We also welcome the announcement of the National Ropeways Development Programme.” – Sarbendra Sarkar, Founder, Cygnett Hotels and Resorts

E Passport with embedded chip to be introduced this financial year for ease of international travel: @nsitharaman #travel #tourism #Budget #Budget2022 @TAAI1951 @iato_india @ADTOIconnect @TourismFaith @OTOAI_India @info_icpb @INDSITECHAPTER

— BOTT- Business of Travel Trade (@BOTT_Tweets) February 1, 2022