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What Tourism Sector Expects from Union Budget 2024?

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After surviving the onslaught of COVID-19, the tourism sector has grown manifold, even with certain changes that have come to the fore. Take for example the growing dependence of travellers on travel and tourism-related digital platforms. Such platforms offer ease of use to travellers. 

With the growth of disposable income of the Indian middle class, travelling to one’s dream destinations has increased, especially internationally.  Further, visa-free destinations have recently become popular among Indians for international getaways. 

The tourism budget 2024 India plans on introducing has added to the expectations of the sector. Travel agents body TAAI hopes for the rationalisation of the GST charges when it comes to tourism and a simpler visa or visa-free entry for tourists who wish to visit India. But these aren't the only expectations coming from the sector’s end. Let us go into a little more detail regarding this. 

Current Challenges Faced by the Tourism Industry

Even with the growth of spending on travel and tourism by the general public, the sector is full of challenges. Some of them include:

  1. Inadequate infrastructure: This includes airports, highways, public transportation etc. Another issue is the lack of basic amenities such as clean water, sanitation facilities, etc

  2. Safety: Inadequate safety and security measures during travels can dissuade potential travellers and tourists, both domestic and international alike.

  3. Limited Marketing: With the government’s travel promotions mostly focussed on heritage or cultural tourism, other aspects like eco, adventure and even medical tourism do not receive their due.

  4. Lack of Skilled Manpower: A shortage of trained professionals leads to the deterioration of the quality of services offered by the sector.

#BudgetSimpleHai!

According to reports, Finance Minister Nirmala Sitharaman will present the 2024 Union Budget on 23rd July. This Budget is expected to have announcements on policies, schemes, income tax rate slabs, and more that are likely to affect everything around us. 

 

To simplify this year’s Budget and to decode its impact on your life, your investment portfolio, and all that you do, we bring you #BudgetSimpleHai! 

 

Join us on our website or head over to any of our social handles to get the latest updates on the Union Budget as it happens. Read in-depth reports, watch videos, and get a clear understanding of what’s in store. 

 

Kyunki Bajaj Broking ke saath, #BudgetSimpleHai

 

Potential Tax Incentives for the Tourism Sector

Some of the potential tax incentives for the tourism sector might include:

  1. A uniform 12% GST rate on hotels, as right now, the GST percentage can range anywhere from 12% to 18% for a room booking

  2. Tax incentives for both hotels and homestays that are adopting sustainable practices, especially the ones aligning with the country’s commitment to the UN’s Sustainable Development Goals, particularly SDG 11 and SDG 13.

  3. Lowering of TCS to 1% or at the very least to 5% on foreign travel packages, compared to the current 5% and 20% 

Infrastructure Development and Its Impact on Tourism

Here is a list of the impacts that the development of infrastructure has had on the tourism sector:

  1. Growth of the road network has been able to connect remote destinations to basic facilities and amenities

  2. The increase in the number of airports in the country catering to better air connectivity is helping travellers save time and effort in reaching destinations that were not accessible at one point

  3. Catered to economic empowerment with Tier-2 and Tier-3 cities utilising tourism as a source of livelihood.  

  4. With an increased footfall of travellers, communities such as those of local artisans and micro-entrepreneurs are also benefiting.

Government Initiatives to Boost Tourism

Many government initiatives have helped boost tourism. These include:

  1. The Swadesh Darshan Scheme: Launched to promote theme-based tourist sectors. The scheme has led to better tourist experiences and infrastructure development in spaces like the Buddha Circuit, Eco Circuit, etc.

  2. Dekho Apna Desh Initiative: Encourages domestic tourism and promotes exploring the country’s diverse heritage and landscapes.

  3. Ek Bharat Shreshtha Bharat: Promotes cultural integration between states leading to increased domestic tourism and appreciation for Indian culture.  

  4. PRASAD Scheme: Focuses on the development and facelift of pilgrimage sites.

  5. Better financial assistance to State Governments/UTs to organise fairs/festivals to increase tourism while promoting Indian culture.

Expectations for Sustainable Tourism Policies

Some of the expectations for sustainable tourism policies in the tourism budget 2024 India plans to unveil are:

  • Encouraging the CSR or Corporate Social Responsibility contribution from companies and corporations to be utilised in the development of tourist sites

  • Tax benefits that help increase sustainable tourism practices while bettering the experience of tourists

  • Tax incentives to hotels and homestays that adopt sustainable practices aligning with the UN’s Sustainable Development Goals.

  • Encouraging energy-efficient technologies as well as waste-reduction measures.   

Impact of Budget Allocations on Travel and Hospitality

With the right budget allocations on travel and hospitality in the union budget 2024, some of the impacts that the tourism sector can expect include:

  1. Better connectivity because of investment in regional airport development

  2. Improved connectivity will lead to an increase in domestic tourism and job creation

  3. Enhanced tourism infrastructure

  4. Increase in India’s potential to become a world leader in domestic travel

  5. With a predicted doubling of air passenger traffic in India by 2030, better air travel facilities will bolster this growth

  6. Increased support for the country’s initiative to contribute towards sustainable development goals. 

Conclusion

With the tourism budget 2024 India is going to present right around the corner, the tourism and travel sectors hope to register further growth in their post-pandemic era. With travellers, especially the middle class, being keen on increasing their travelling experiences post-pandemic, the sector is sure to see more football. To be able to handle it however, the budget 2024 needs to support the industry in its endeavour to offer the best facilities to the tourist and travellers while also staying true to its sustainable development goals. 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

How will the Union Budget 2024 likely support the recovery of the tourism sector post-pandemic?

Answer Field

The budget can help better the tourism infrastructure, incentivize sustainable travel practices and offer better connectivity to help bolster and support the growth the tourism industry has seen in the post-COVID era.

What specific financial incentives or grants is the tourism industry hoping for in Budget 2024?

Answer Field

Some of these incentives the tourism industry hopes include:

Encouraging the CSR or Corporate Social Responsibility contribution from companies and corporations to be utilised in the development of tourist sites

Tax benefits that help increase sustainable tourism practices while bettering the experience of tourists

Tax incentives to hotels and homestays that adopt sustainable practices aligning with the UN’s Sustainable Development Goals.

Will there be any changes in GST rates for the hospitality and tourism sectors?

Answer Field

The tourism sector hopes that there will be revised GST rates in the tourism budget 2024 India is about to present.

What measures are expected to promote domestic tourism in the upcoming budget?

Answer Field

Some of these measures include:

Growth of the road network has been able to connect remote destinations to basic facilities and amenities

Better connectivity because of investment in regional airport development

Improved connectivity will lead to an increase in domestic tourism and job creation

Better financial assistance to State Governments/UTs to organise fairs/festivals to increase tourism while promoting the Indian culture

 

How might the budget address sustainability and eco-tourism concerns within the industry?

Answer Field

The budget could include:

Tax benefits that help increase sustainable tourism practices while bettering the experience of tourists

Tax incentives to hotels and homestays that adopt sustainable practices aligning with the UN’s Sustainable Development Goals.

Encouraging energy-efficient technologies as well as waste-reduction measures

 

Will there be provisions to enhance digital and technological adoption in the tourism sector?

Answer Field

Seeing as the use of e-platforms and digital spaces has increased in the tourism sector, enhancing digital and technological adoption in the sector as part of the budget 2024 would contribute towards its development as well.  

What tax reforms or policy changes are anticipated to benefit tourism operators and travel agencies?

Answer Field

Travel agents body TAAI hopes for the rationalisation of the GST charges when it comes to tourism and a simpler visa or visa-free entry for tourists who wish to visit India. 

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