Tax rebates announced in the interim budget has given new hopes to the tourism industry. The budget now allows income tax relaxation on annual income up to Rs 5 Lakhs, which is great news for the middle class.
FCM Travel Solutions MD Rakshit Desai stated that the interim budget, on the whole, is quite promising for the travel industry. He added that the tax rebate for the middle-income group would ensure higher disposable income, which indirectly is beneficial for travel and tourism. Similar views were voiced by Chander Baljee, Managing Director of Royal Orchid Hotels, who stated that the increase in disposable income would benefit all consumer-focused industries.
Reportedly, these tax reforms will benefit approximately 3 crores (30 million) taxpayers, which includes small businessmen, salaried individuals, and self-employed class. Apart from tax cuts, the government also increased the budget for tourism to Rs 2,189.22 crore for the FY 2019-20. This will most likely bring much-needed improvement and development in the sector, including beautification and restorations. Nishant Pittie, CEO and Founder, EaseMyTrip, has expressed his views saying that these promising initiatives will definitely be beneficial for the Indian Travel and Tourism industry.
In fact, experts and giants of the industry, including Thomas Cook, have expressed similar views. It is quite apparent that as the middle-class consumers will have more savings, they will tend to increase or start spending on leisure activities like vacations. Also, the ‘Sagar Mala’ project around the Indian Coastal region, a part of the government’s Vision 2030, has created excitement in the tourism industry. The project aims to develop the Indian coast and give a much-needed push to Cruise tourism, with an aim to attract domestic as well as foreign tourists.
Just a few days before the budget, players from the industry had expressed their demand for a tourism friendly budget, including measures to ensure better intra-state and inter-state passenger transport, especially, air connectivity. Tourism has become one of the major contributors to the Indian economic growth, accounting for a whopping 10% of the GDP. In 2018, it generated revenue of $250 billion, out of India’s total of $2.5 trillion. The industry grew at 9.4% from, which is higher than the overall GDP growth rate of 7.5%.
Growth for travel and tourism has been gradual, and policies over the years have boosted the industry. Easier visa policies, improved tourism infrastructure, initiatives like Incredible India, have helped tourism big time. Total foreign exchange earnings from January to October 2018 were $22.7 billion, $2.7 billion more than the same period of the preceding year.
According to the World Travel and Tourism Council (WTTC), the tourism industry has created one in five of all jobs across the globe in the past decade. It also claims that with proper regulations and potent governance, the sector could create over 100 million jobs over the next ten years. India is said to be a major contributor towards global tourism growth. The Ministry of Culture’s collaboration with the Archaeological Survey of India, under the project, Adopt a Heritage, aims to provide world-class amenities for domestic and foreign tourists at various heritage and cultural sites.