Parl panel concerned over fund cuts for tourism as sector suffers losses

A parliamentary committee on transport, tourism and culture has raised concerns over budget estimates of the Ministry of Tourism being slashed at a time when the travel and tourism industry is reeling from huge losses due to the COVID-19 pandemic.

With the budgetary allocation of Rs 2,026.77 crore for 2021-22, it would be difficult for the ministry to even run activities related to the Swadesh Darshan scheme, the PRASHAD scheme and others to realise the vision of increasing tourism sector's contribution to India's GDP to Rs 8.50 lakh crore, the panel led by BJP leader T G Venkatesh noted.

"The committee also notes that though this year's allocation is 62 per cent higher than the RE 2020-21 allocation of Rs 1,260 crore, it leaves a yawning gap of Rs 1,111.29 crore between the projected demand of Rs 3,178.06 crore of the Ministry of Tourism and the actual allocation made by the Ministry of Finance.

 

"The committee is concerned to note that the Budget Estimates of the Ministry of Tourism has been considerably scaled down at a time when unprecedented COVID-19-induced crisis has led to a near-complete shutdown of the travel and tourism industry, which is reeling from huge losses due to the pandemic," the panel has said.

It further recommended that the Ministry of Tourism be provided with a substantially higher outlay for the financial year 2021-22 at RE (Revised Estimates) stage so that tourism infrastructure activities could be ramped up to boost development of sanctioned tourism circuits/destinations and also facilitate development of new tourism products of global standards.

The panel has also hit out at the ministry for the shortfall in the utilisation of budgeted outlay for the years 2018-19 and 2019-20 which, it said, clearly indicates "fiscal indiscipline and poor budgetary planning" on the part of the ministry and is also reflective of the "inefficiency" of the mechanism purportedly evolved by it to prevent under-utilisation of funds.

The committee listed that there is persistent mismatch between the Budget Estimates (BE) and Actual Expenditure (AE) during the years 2018-2019, 2019-20 and 2020-21. The shortfall in the Actual Expenditure was to the tune of Rs 47.47 crore, Rs 789.01 crore and Rs 1,239.83 crore for the years 2018-19, 2019-20, and 2020-21 respectively.

The panel has also noted the lack of available data on the tourism industry with the ministry, and recommended that under the Scheme of Market Research, for which an allocation of Rs 20 crores has been made in BE 2021-22, a proper mechanism be developed for collection of robust data on different aspects of tourism.

Noting that one of the bottlenecks in tapping the full potential of the hospitality sector is the high incidence and multiplicity of taxes, the committee has recommended that levy of taxes on hotels should be rationalised and industrial rates for power supply, water supply, property tax should be charged instead of the commercial rates.

"This, in the opinion of the committee, would be a game-changer in reviving this badly hit 83 sector due to COVID-19 pandemic and boost investment in the sector. The committee, therefore, recommends that the ministry should immediately initiate policy measures for according industry status to hotels so that benefits of lower rates of electricity, water, property tax could be extended to hotels, and taxes levied on hotels are rationalised and made globally competitive," it said.