Saturday, 04 March, 2017, 12 : 13 PM [IST]
UNION BUDGET 2017-18 REACTIONS FROM THE INDUSTRY
Director, Cox & Kings
Infrastructure is a part of the 10 most
important themes in Union Budget
2017 with allocation for infrastructure
stands at a record INR 3,96,135 crore.
Road and rail infrastructure are crucial
in terms of boosting tourism as these
are widely used mode of transport
in India. In this context, stepping up
the allocation for national highways
to INR 64,000 crore, announcement
to launch dedicated trains for pilgrimage/
tourism and service charge withdrawal on booking of rail tickets are
welcoming moves which will help to accelerate domestic and inbound
travel. Provisions made for clean and safe rail travel and making 500
rail stations disabled-friendly are also encouraging.
We are quite positive about the focus on rural infrastructure
development as we see a scope to promote rural tourism even further,
especially for inbound tourists. However, we need to know more about
what all will be covered in five special tourism zones to be set up in
partnership with states.
The Union Budget for 2017-18 would
help to boost the rural, infrastructure
and industrial sectors. The Budget
focuses on a long term growth in
10 strategic areas. The measures
announced for agriculture, housing
sector, infrastructure, financial services
are expected to create demand in mid to
long term in the economy. Thrust in the
area of youth education, online courses
etc. are expected to increase the quality. Government’s focus on JAM
(Jan Dhan, Aadhar and Mobile) is a welcome move. Series of initiatives
on digital payment is expected to bring efficiency in the collection and
is positive for the formal sector. Income Tax benefits announced for
income up to INR 5 Lakh annually is a positive move.
Tourism is an important part of the global economy and a significant
employment generator. Five special tourism zones will be set up in
partnership with the states. The Incredible India’s second campaign
will be launched across the world. The Government’s initiative on
digitisation and governance is expected to improve transparency and
ease of doing business; is positive for the formal sector. The ban on cash
transaction over INR 3 Lakhs is a welcome move and it is expected to
provide a level playing field. Focus on railway security and upgradation
of services is expected to give boost to rail tourism. Measures to control
defaulters as announced in the budget, was the need of the hour.
Development of tier 2 airports through PPP mode will give boost to the
travel from these areas.
COO, Thomas Cook
This budget has very little to offer to
the tourism industry, but with plans
to launch Incredible India 2.0 as the
next phase of growth for domestic
tourism with respect to India, there is
something to look forward to. In the
Railway Budget, one of the biggest
announcements is the withdrawal of
service charge on rail tickets booked
through IRCTC. Another significant
development is the emphasis on safety and
sanitation, by introducing bio-toilets, which will increase passenger
comfort. With emphasis on a Digital Economy, by introducing measures
like elimination of service charge while booking rail tickets on IRCTC,
launching DigiGaons to facilitate employment & skilling, and even
augmenting transactions done via the BHIM app; the Finance Minister has laid out a path that directs the country towards digital transformation. We are confident that the steps charted in the Budget will act as catalysts for change and thus move people from the unorganised sector to organised sector. Having said that, from my point of view this budget is a subdued one.
This budget is good for start up sector as companies will be taxed for 2 out of 7 years. Tax rate on SME and MSME has reduced up to INR 50 crore which will make small companies more competitive as compared to Corporate companies. Reduced tax burden up to INR 5 lakhs income will have people more disposable income and on the basis of this we expect travel industry to maintain a positive growth. Inbound tourism has been given big boost with creation of special tourism zones.
Sunil Kumar R,
There was not much in the Budget for the travel and tourism industry. We were expecting some good news on the Service Tax issue but no exemption has been considered by the central government for our much-talked about sector. The inbound travel sector too, has been overlooked, which contributes heavily to the foreign exchange earnings. I don’t feel we have had any concrete takeaways from this budget.
The aviation sector and the tourism industry in general has not received any benefits in the recently announced union budget 2017-18. There is nothing great about the budget. For our industry, it is neither positive nor negative.
Going forward, the industry is being represented under one voice of FAITH and we are pushing hard for a better GST regime for our sector.
The new Budget has “very little” to offer to the Travel & Tourism Sector which is still expectantly waiting for the Government’s recognition as an “INDUSTRY”. It is this handicap, together with the lack of unity that exists among the stakeholders and the resulting loss of a collective
bargaining capacity, that is proving costly to this all-important Sector.
The announcement to have five special tourism zones set up in partnership with the States along with the launch of the Incredible India -2’s worldwide campaign as the next phase will certainly help improve In-bound tourism.
Emphasis on improving the infrastructure – laying 3500 kms of railway tracks across India, dedicated trains for religious tourism, priority on safety by the creation of a Fund, improvement of sanitation by introduction of bio-toilets – will increase convenience and comforts that will definitely encourage more people to travel more. Withdrawal of service charge on online rail ticket reservation will also encourage domestic tourism. However, everything depends on the projects implementation process and the timeline involved.
Awarding of operations and management of airports in tier II cities on PPP mode will help create a new roadmap. Though service tax been exempted, the Viability Gap Funding under Regional Connectivity Scheme will continue to be a burden on the traveling public. But it will increase regional connectivity and India will become more accessible to global travelers
Considering the tourism segments, it is quite disappointing that the recently announced increased tax slab has not been revised or any incentive package declared. The Sector is still waiting for the ‘Industry’ tag and has yet to see the GST impact. Anyhow, India is still an expensive destination purely based on our taxation policies.
Chief Council, Global Tourism Council Trust
The Budget has nothing new to offer for the industry. The focus on Tier-II & III industry has been music to the ears since a long timel. There is need for time-bound implementation of the Budget initiatives on the ground level for a bright future of the industry. Once the changes are visible, the industry will start picking up pace again, which has been marred by many unfriendly initiatives.
The present budget hasn’t much focused on the tourism and hospitality sector. Though indirect benefits such as infrastructure development, skilling of youth and enhancing of education system is sure to have a positive effect in the long term. With such initiatives, people will experience better facilities and better education will also give them an improved civic sense. The Finance Minister announced setting
up of 100 foreign language institutes
pan India and has allocated funds for
The government is spirited to
turnaround basic facilities and other
related sectors will also fall in shape in
due course of time. Overall, by 2020,
I believe that the travel and tourism
industry will be in a much better
We had good expectations from this
year’s budget in the form of sops and
incentives to open up huge investment
opportunities and viable business
avenues. We expected that government
will take steps in tackling inflation.
Also, service tax on tourism sector
will be brought down to make India
holiday’s packages competitive. As
part of tourism and hospitality industry,
we found it a very “Dry Affair” as budget
has nothing special to offer to the tourism industry.
Even some of the benefits which we had have been withdrawn, like
earlier we had 70% abatement which is reduced to 40% and earlier it
was 30% taxable value and now it is 60%. This means that earlier it was
taxed 4.5% on package and now it is double. We expected Service tax
exemption against foreign exchange earnings which would have given
real boost to tourism.
Only good thing is that the Union Budget made a brief reference
of tourism as a source of employment in the country and announced
setting up of Five Tourism Special Zones and Incredible India Brand
will be taken to second stage of global Campaign for boosting tourism.
The union budget with increased allocation for Railways with different
delivery schemes specially with tourism and pilgrimage welcome
addition for tourism. Similarly higher allocation for Civil Aviation,
Roadways, shipping and other infrastructural development s will also
serve the cause of tourism.
India Representative of
Royal Caribbean Cruises Ltd.
We hope that the union budget will
have a positive impact on the tourism
industry which is a big employment
generator, resulting in a significant
multiplier effect on the economy.
We are happy to see infrastructure
development at airports in Tier-II
and III cities, as most of the aspirational India resides here. As Indian
representative for Royal Caribbean Cruises Ltd., we want to cater to
Indians who aspire to explore the world differently.
Guldeep Singh Sahni,
OTOAI is very disappointed with the
budget for 2017-18. The increasing
heavy tax burden is a major deterrent
in the growth of tourism sector,
especially for outbound tour operators,
who are witnessing a drastic downturn
in business with the recent tax ruling
and the upcoming GST. This is further
challenging the travellers, jobs and
revenue generation for the country.
There is nothing in the budget to boost outbound travel. Even
the domestic travel sector hasn’t received much of a philip. The
government keeps highlighting the importance of tourism but it’s all
Captain Swadesh Kumar,
There is nothing in the budget for
adventure tour operators. The tax
on tour packages has risen to 9%
which is like killing the goose that
lays golden eggs. Adventure is a
niche but potential segment of travel
and we have been discussing our
issues with the ministries at various
platforms. I believe that FAITH which
is the umbrella association will take our
concerns forward and will push for the lowest tax slab for the travel
and tourism industry.
There is nothing great in the budget
for the tourism sector. We had big
expectations as FAITH had met the
Finance Minister and had given a list
Tourism sector is going through
a bad phase all because of heavy
tax burden. Outbound travel is
becoming costlier. The India Tourism
overseas regional offices are going
through shortage of staff. Even the
most visited monuments in India like Taj
Mahal awaits cleanliness. We first need to get the sector in shape
else this tax crisis is going to kill us.
Sr Vice President, IATO
One more year, one more budget, and yet again little to boost the tourism sector. Despite being over 7% of the Indian GDP with over 37 million+ jobs, the support needed to boost this declining industry was missing, At least, our consecutive governments are consistent in not giving a damn of what the sector has been asking for.
President and CEO,
This budget has taken several measures to boost the travel and tourism industry. We see a strong focus on strengthening rail-road infrastructure and building of airports in Tier-II cities in order to support the tourism ecosystem, which is likely to improve connectivity across the country. Rural India holds immense potential from a tourism point-of- view, and the newly announced initiatives to further develop our rural markets with 100% village electrification will further add to the overall development of our economy. The industry was however, keenly looking forward to a stronger government focus on incentives for the commercial real estate sector such as listing of REITS, changes to the Real Estate Regulatory Bill and creation of single-window clearances besides according infrastructure status to the hospitality industry. We now look forward to the implementation of GST such that all taxes are streamlined for the long-term benefit of the country.
President, SKAL Club of Bombay
I have finished 40 years in the tourism industry and have been closely associated with its guardians in various capacities. Governments came
and went and even though we contribute significantly to our country’s GDP and give employment to a noticeable number, in our fragmented representation, we seem to fail every time to get the budget see our point of view.
From a macroeconomic sense and seeing the cheer at the stock markets, I would otherwise commend the Finance Ministry and the Government of a very balanced approach to this year’s budget.
Needless to say, with a fifth of the country going into elections, populism was curbed and this balanced approach taken should positively impact all our lives.
GST and service tax will play a critical role for all of us in the immediate future but I can only hope that the next generation will put their heads together to create a tourism industry supported budget.
Co-founder & Chief Performance Officer,
With the abolition of Foreign Investment Promotion Board (FIPB), we are hoping for an increase in foreign investors, bringing in more of forex in the economy, which we see going positively in our stride. So all in all it is a good budget and a good financial 2017-18.
Joint Managing Director,
“The Union Budget 2017 brings multifarious opportunities for the tourism sector. Establishment of five special tourism zones in partnership with the states will attract more foreign travellers and grow the inbound travel. Announcement of the second campaign of Incredible India across the globe and development of airports in tier-II cities is another great move in making India as an ideal tourist destination. Further emphasis on Infrastructure with the allotment of Rs. 3, 96,135 crore in FY17-18 by Finance Minister Arun Jaitley will provide the required stimulus to Incredible India campaign.
Also, the government’s demonetisation drive has given a tremendous fillip to digitalisation in India. The Centre’s steady focus on speedily implementing digitalisation will support the long-term economic growth of the nation. Focus on ‘digital economy’ as a part of ‘transform, energize and clean India’ (TEC-India) will be a significant factor for the
development of Visa Outsourcing industry. It will help to maximize reach
and increase the demand for inbound as well as outbound travel.”
COO (B2C), Yatra.
“This year’s budget is a progressive
one and lays out a wider government
policy towards achieving greater
macroeconomic stability and better
fiscal management. The sharp focus
on building improved connectivity,
particularly investment in road,
railways & airport infrastructure across
the length and breadth of the country, is
a welcome move for the travel & tourism
sector. This will put a much larger number of destinations on the tourist
map by reducing the travel time to these smaller cities and towns. The
reduction in personal taxes should also result in more disposable income
in the hands of Indians, which should boost the tourism sector as well.
The announcement of creating 5 special tourism zones, in partnership
with states, will lead to creation of new tourist hubs and catalyse both
domestic and inbound tourism. The newer policies to promote the
digital economy are also significant steps in the development of a truly
cashless India, where citizens will have easy access to a wide choice of
options at their convenience. “
Sector Head and
VP Corporate Ratings,
The Budget has laid emphasis on
developing the airport infrastructure
in the country which is lagging the
robust growth in air traffic. The Budget
proposes to invite private players for
operation and maintenance (O&M)
of airports at tier-2 cities which is a
continuation of the recent invitation of
bids for O&M contracts for Jaipur and
Ahmedabad airports. Involvement of
private sector in airports is likely to bring efficiency gains, making such
airports more profitable. AAI too is likely to participate in the airport
development, supported by funds raised by monetizing its land bank.
All these initiatives are welcome addition to the recently implemented
Regional Connectivity Scheme.
The budget proposes to take up select airports in tier 2 cities for operation
and maintenance in the public private partnership (PPP) mode, which is
a welcome step. Further the budget talks about proposed amendments
in the Airport Authority of India Act to enable monetisation of land
assets to raise funds for airport up-gradation.
The Airports Authority of India (AAI), which is a nodal authority for
owing and managing airports, has been undertaking airport infrastructure
up-gradation for last few years. While private sector has been involved in
airport infrastructure development under the PPP model, however, their
interest has been restricted to major airports. This is on account of low
revenue generation potential of other airports. The budget proposals look
to encourage both the private players and AAI for airport development. It is
noteworthy that the passenger traffic is poised to cross 250 mn passengers
in FY2017, which makes continued investment in airport infrastructure a
Gainwell Travel & Leisure
Unfortunately there was nothing in the
Union Budget 2017-18 for the tourism
industry. The service tax on hotel
reservations and holiday packages
both for inbound and outbound was
increased to 9% wef. January 22, 2017.
This announcement came as a shock to
the industry just a few days before the
At this point of time I’m yet to assess
the impact of the 9% service tax on outbound tourism, which will
certainly be adversely hit. The net savvy consumer will straight away
have a 9% benefit, if he books overseas hotels and packages directly
with an international supplier. Would he be willing to pay 9% more for
the same services purchased in India through a travel agent?
The decision of the government to allow
private companies to manage and operate
airports in smaller towns and cities under
public-private partnerships and also offer
airport land for development of hotels and
convention center is a step in the right
direction. This will result in providing a
strong impetus for the travel and tourism
sector especially in the non-metro cities.
Not only will it open up the country and
new destinations for international tourists but will also offer these tier 2
and 3 the much need connectivity to ensure economic development, higher
disposable income and the opportunity to travel. The government has also
recognized tourism as an employment generator and will set up five tourism
zones the details of which will be interesting to understand.
Founder & Group MD,
Akquasun Holidays Pvt. Ltd
The Union Budget this year has
been a complete let down as far as
outbound tourism is concerned. The
demonetization exercise has adversely
affected business in the last quarter of
the year, and the increase in service
tax to 9% has dealt a body blow to
the outbound business. It is high time
the government realides the value of
outbound tourism, which not only helps
in generating foreign exchange, results in increase air traffic, along
with creating a strong image of the country as a potential outbound