Union Budget 2024: FM's vision boosts infrastructure and tourism, but leaves hospitality sector wanting more

Finance Minister Nirmala Sitharaman presenting Union Budget 2024-25. Pic/PTI

Finance Minister Nirmala Sitharaman unveiled the Union Budget for the fiscal year 2024-25 on Tuesday.

While the budget has been noted for its focus on employment generation, agricultural development, infrastructure development and support for spiritual and cultural tourism, it has received a mixed reception from the hospitality and tourism sectors.

Pradeep Shetty, President of the Federation of Hotel and Restaurant Associations of India (FHRAI), expressed his concerns about the budget's impact on the hospitality industry. Shetty highlighted the sector's high expectations for substantial reforms and support in line with the government's vision for a 'VIkasit Bharat' by 2047, reported ANI.

As per the ANI report, Shetty noted that despite these expectations, the budget failed to address some critical demands of the tourism and hospitality sectors, such as GST rationalization, the granting of infrastructure status, and essential policy reforms.

"The hospitality sector has been pinning high hopes on the Union Budget for 2024-25 presented by Smt. Nirmala Sitharaman today, on the backdrop of Indian government's stated vision of Vikasit Bharat by 2047 and the critical role the tourism industry holds in achieving it. However, there is nothing spectacular in the budget to bring structural changes to address the fundamental challenges it faces in a competitive world order and to accelerate the growth of the sector to be a USD 3 trillion economy by 2047," Shetty said, according to ANI.

"Some key demands of tourism and hospitality to revitalize the sector, such as GST rationalization, granting of infrastructure status, ease of doing business, and policy reforms, have not been considered in the budget once again, given the well-accepted multiplier effect of tourism on employment and the economy," he added.

Despite these setbacks, Shetty acknowledged some positive aspects of the budget that seem to be beneficial for the sector. It included the government's commitment to infrastructure development, employment and skill development, and religious tourism, reported ANI.

The focus on enhancing spiritual and cultural landmarks, including the Vishnupath temple in Gaya and the Mahabodhi temple in Bodhgaya, is praised for its potential to offer significant economic and social benefits, reported ANI.

Shetty said, "The government's proactive perspective on enhancing tourism, particularly through the development of spiritual and cultural landmarks like the Vishnupath temple in Gaya and the Mahabodhi temple in Bodhgaya, is a commendable move that promises substantial economic and social benefits," according to the ANI report.

He added, "Furthermore, the development plans for Rajgir and Nalanda represent a significant investment in promoting India's ancient historical and educational legacy. The government's commitment to supporting tourism in Odisha will not only highlight Odisha's unique attractions but also encourage sustainable practices that preserve the state's ecological balance and cultural heritage."

The emphasis on tourism in Odisha will provide assistance for the development of the state's scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and beaches.

The initiatives aimed at improving youth employment, skill development, and job creation are welcomed, particularly as the hospitality sector grapples with a shortage of skilled workers.

The budget's broader commitment to making India a global tourist destination will also create jobs, stimulate investments and unlock economic opportunities for other sectors, as read in FM's Budget speech.

The development of spiritual sites and the promotion of cruise and beach tourism are expected to attract both domestic and international tourists.

As per the ANI report, Rajesh Magow, co-founder and group CEO of MakeMyTrip, also shared his perspective on the budget. He commended the government's continued emphasis on infrastructure development, noting that enhanced road infrastructure would support the travel and tourism sectors.

He said, "The government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sectors. We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots," reported ANI.

He added, "The decision to reduce the TDS rate on e-commerce operators to 0.1 per cent is a welcome move. Furthermore, the provision of credit for TCS against income tax under 'Income from Salaries' is logical and will provide much-desired relief to taxpayers who travel internationally."

(With inputs from ANI)