Budget 2024 Expectations: GST exemption, more allocation high on the wishlist from travel, tourism and hospitality sector

As India gears up for a full budget following the elections, the travel, tourism and hospitality industry is poised for significant growth and development. The interim budget of February 2024 had already set a positive roadmap, with substantial increases in budgetary allocations for the tourism ministry, highlighting a clear focus on enhancing tourism infrastructure. 

Additionally, the emphasis on Foreign Direct Investment (FDI) and the development of iconic tourist centres further underscore the government’s strategy to leverage tourism as a catalyst for economic growth. 

Let’s have a look at what the industry specialist foresee:

As per Somesh Agarwal, Chairman and MD of Radisson Blu Palace Resort and Spa, Udaipur, with the industry growing rapidly, strategic investments and policy reforms are crucial. Simplifying GST structures and addressing tax disparities will boost the sector’s competitiveness in the global market and make tourism accessible and affordable for all across the globe. Additionally, providing infrastructure to hotels and convention centres across cities is crucial for investments and driving the sectors’ growth. “We urge the government to abolish the 18% GST category for hotels with high room rates above Rs. 7500/—and merge it with the 12% GST category,” he added.

Moreover, the new government recognizing the hospitality sector as a formal industry is essential, considering its significant contributions to national GDP and employment. One key expectation is simplifying taxation with a uniform tax rate and reducing property taxes that will strengthen operational foundations and encourage strategic investments in infrastructure development. “It becomes equally important to also streamline regulatory processes. By making it easier to navigate compliance requirements, the sector will reduce its external expenses, thereby lowering costs and speeding up expansion efforts. We also hope to see resources allocated towards training programs that enhance the skills of those entering the hospitality workforce,” Aji Nair, Chief Advisor and Consultant at Mirah Hospitality said.

For EaseMyTrip’s Nishant Pitti, the government’s commitment to improving connectivity through new railway and port corridors, alongside the growth of air connectivity and airport infrastructure, aligns with the broader economic goals. These initiatives are expected to stimulate local economies and attract both domestic and international tourists.

Overall, the travel and tourism industry is set to benefit from these strategic initiatives, fostering growth, employment and increased international collaboration. 

“With travel returning at pace in India, it has indeed been an exciting period of time for India’s aviation and tourism sectors. To cater to the robust growth in travel volumes, particularly from Tier 2 and Tier 3 cities within the country, 15 airport projects have already been announced across key destinations over the last quarter. This is further complemented by the inauguration of new airports, new terminals being developed at existing airports and the expansion of flight routes,” Sumit Prakash, Country Director, India and South Asia, Collinson International stated.

Source: FINANCIAL EXPRESS