Expectations were running high among an industry that has been severely hit and struggling to survive for the past two years. Announcement of some relief and bail-out measures for the industry’s immediate survival was expected. However, a deep sense of despair soon took over as it dawned that the Finance Minister had completely failed to address in her budget speech the plight of the tourism sector.
While some announcements were made on new trains and Infrastructure development but the question of the industry’s immediate survival was completely circumvented. An extension of the loan under ECLGS was announced, which was well received by the big Hospitality industry players but it proved of very little or no use for the travel agents or tour operators as they are already under pressure to pay EMIs of the loan they have already taken and banks are not providing fresh loans to the tour operators until they clear their previous loans. Further, the loans are not being given to tour operators who have taken loans under ECLGS 1 and 3. Travel Trade Journal shares the initial reactions of the captains of the Industry.
– Gurjit Singh
Rajiv Mehra, President, IATO
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 the Hospitality sector. Most disappointingly none of these found a mention in the budget presented”. “There has been huge employment loss besides financial loss in our sector. Just a 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.
Jyoti Mayal – President, TAAI
Our trade has been ignored once again!, our trade has suffered tremendously due to the pandemic and it was expected that the Government would at least 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 the last two months, we had requested for GST input credits be made available across states for hotels and travel-tour operators.
TCS has been a hindrance to the growth of outbound tourism making Indian tour operators less competitive in the international market due to the 5 per cent being levied on all package tour options over and above the GST, We were also expecting to least that travel and tourism be brought under the concurrent list for industry status.
Nakul Anand, Chairman, FAITH
The Union Budget provides some relief and medium to long term infrastructure measures to stressed tourism travel and 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.
Dr. Subhash Goyal, President – Confederation of Tourism Professionals
Nothing concrete has been announced and this industry is bleeding for the last three 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 per cent 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.
Riaz Munshi, President, OTOAI
It is a growth-oriented budget but I am disappointed that no specific measures have been announced to revive the travel and tourism sector. We were hoping for some GST relief measures (a temporary waiver or reduction) to aid the recovery for travel companies. The recent introduction of TCS also distorts the competitive landscape and makes it favourable for the foreign travel companies who do not have to abide by these rules thus making an uneven playing field. It is important that this is reconsidered and some relief measures are implemented to promote the inclusive growth of our industry.
P.P. Khanna, President, ADTOI
The Union Budget 2022-23 once again, disappointed the tourism sector, which had hopes from the government, some fiscal stimulus from the government was expected for survival. Almost 40 per cent of tour operators are already out from their businesses due to COVID and we are still in the midst of Omicron and expecting some relief from the government but seems all is in vain. While there were several other 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. But what about the present situation to cope with the financial aids to Tour operators or for their survival has not been looked by the govt, despite best efforts from the industry leaders and FAITH.
Rajeev Kohli, Joint Managing Director, Creative Travel
To say one is disappointed at today’s budget is a gross understatement. Horrified if more like it. It is clear that the value of tourism in the eyes of this government is even lower than that of umbrellas, which got its own special mention.
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.
Ankush Nijhawan, Co-Founder, TBO. Com
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.
Prateek Hira, Chairman of IATO- Uttar Pradesh, Chapter & FICCI’s Tourism Committee under UP State Council
Unfortunately tourism industry was once again sidelined in the union budget 2022 as no direct benefit was passed on to it, in spite of the fact that this is the most ailing of all sectors due to the pandemic. The extension of ECLGS through 2023 is a welcome step and the allocation of additional 50,000 Crores dedicated to tourism will bring in some relief for the industry. It is justified to say that we were expecting much more, at least indirect benefits which we did not get.
Jay Bhatia, Vice President, TAAI
It is frustrating that the Government’s focus is on 2047 rather than looking at current challenges faced by the travel and tourism trade in India. In her budget speech, the Hon’ble Finance Minister set out “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 been ignored. Further, 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.
Vasudha Sondhi, Managing Director, OMPL Group
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 the 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.
Ronojoy Dutta, Whole Time Director and Chief Executive Officer, IndiGo
Budget 2023 appears to be growth-oriented by increase in capital outlay of INR 7.5 Lacs crores, fiscal deficit capped at 6.4 per cent and efforts are being made to reduce compliance burdens and improve ease of doing business. We expect the budget would enable India to achieve a growth estimate of 9.2 per cent. We welcome the new incentives of issuing of E-passport and the 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 the seamless movement of cargo while reducing logistics costs. Having said that we were expecting tax concession to the Aviation industry in the form of a cut in ATF excise duty and allocation of concessional finance to airlines to help us come out of the pandemic.
Madhavan Menon, Managing Director, Thomas Cook (India)
The Union Budget 2022-23 reflected the development and investment orientation, with much-needed emphasis on infrastructure, technology, skill development and health.
However, from a Travel & Tourism perspective, the Union Budget has been disappointing. The Budget made no reference to the industry’s recommendations to aid revival, including rationalization of taxes (a complete GST holiday, exemption of TCS on outbound tours, reduction in indirect taxes), removal of SIES benefit capping of Rs 5 cr.
For a sector that is a key contributor to the Country’s GDP and brings in valuable foreign exchange earnings, with a force multiplier impact on employment and skill development, a stimulus would have created significant value in supporting the country’s road to recovery and growth”.
H S Duggal, MD, Minar Group
The Budget has been a great disappointment for the travel industry as it fails to address the immediate concerns for the industry’s survival. We expected the Government to handhold the industry out of these deep waters we all find ourselves in. Our industry has been a major employment generator and source of Foreign exchange earnings, but currently, the government’s indifference inaction has hit us deep.
Zubin Saxena, MD &VP Operations, South Asia – Radisson Hotel Group
We welcome the Union Budget and the allocation of strategic aid that will enable the speedy recovery of the hospitality sector. The extension of the Emergency Credit Line Guarantee Scheme (ECLGS) with an increased cover of INR 5 lakh crores for the hospitality sector is a positive move. With domestic travel picking pace, we believe that the government’s highway expansion plans will facilitate accessibility and strengthen this demand further.
Kush Kapoor, CEO, Roseate Hotels and Resorts,
The hospitality industry has been severely battered by three consecutive Covid-19 induced waves over the last two years. The extension of the ECLGS moratorium by one year for the hospitality sector will come as a breather for the hotel players grappling with the 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.
SP Jain, Managing Director, Pride Hotels
Over the last few weeks, the government has been actively engaging with industry and other stakeholders to announce various measures to revive the economy. Tourism and Hospitality play a pivotal role in economic development and the industry was anxiously waiting for some key announcements from the Union Budget 2022-23. 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 two 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.
Sarbendra Sarkar, Founder, Cygnett Hotels and Resorts
The extension of the ECLGS scheme with an 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.
Ruchi Uberai, Director, Amritara Hotels
The much-touted ECLGS, according to me is a non-starter for small or medium players. This is a loan scheme for enabling you to borrow more money, which eventually has to be paid back. If the industry has to pay back loans that are more than business cash flow can afford then in times to come, we will be even more stressed. If the scheme was to have a 15 year or more payback period we could have still considered it, but in its current form this proposed extension of ECLGS is not worth considering as a benefit for the industry.
Rahi Vaghani, Managing Director, Monteria Resort
At Monteria, we are welcoming the initiatives announced in the new fiscal budget. The 400 new Vande Bharat trains and ropeway projects signify the government’s commitment towards bettering our tourism infrastructure. The extension of the ECLG scheme till 2023 with an additional corpus of INR 50,000 crore dedicated to hospitality and related sectors should provide relief to most establishments especially the smaller ones.