Asking the industry to improve business model to take advantage of emerging opportunities, Finance Minister Arun Jaitley today said they cannot indefinitely depend upon incentives and exemption.
"At the end of the day, India indefinitely cannot survive and sustain merely on incentives and exemption. We are now in the process of GST implementation. I am asked the question what do you think the rate will be? My answer always is more the exemptions, higher will be the rate because when you exempt some people, you charge others higher rate," he said.
He further said that exemption distorts rate and there is need for fair rate.
Speaking at Incredible India Tourism Investors' Summit 2016, Jaitley asked the industry to develop such business models that the market really accepts those.
Citing example, he said, "Today, we are one of the few fortunate economies because of global oil prices we are able to save lot of money and one of the industries directly impacted by this is the aviation industry.
"Therefore, you have one set of aviation industry which has not conducted business models adequately which will disappear into thin air and the others will cover up all losses they have made over the year."
Therefore, he said, business model has to adjust to the capacity of the market and possible potential of the expansion as far as market itself is concerned.
With regard to tourism sector, he said, the focus should be on volume and moderation of rate and taxes to attract higher number of tourists of all nature.
"Our emphasis for the future will have to be on much larger volume and for the much larger volumes we will need moderate rate, moderate taxes, availability of facilities for all kind of tourist to enter into India. Therefore, once we offer a deal which is better competitors internationally, I am sure the unrealised potential of Indian tourism can be seen," he said.
He assured the government would continue to support in terms of facilitation like e-visa, protecting and market of heritage sites, market India's tourism internationally.
Speaking at the event, Tourism Minister Mahesh Sharma said that the tourism sector has been identified as one of the priority area and "we have to harness our tourism potential".
All stakeholders are committed to raise tourism sector to a newer height, he said, adding the government has come up with new ideas to develop our tourism sector.
"We propose to take our share in tourism to one per cent by 2020 and by 2025 we are aiming for a two per cent share in the global tourism market. We are in the process of adding another 25 countries for providing e-visa facility, which is currently available to 150 countries," he said.
As the government pushes the envelope on rural
development to spurt economic growth, all of the over 6.4 lakh villages in India will be electrified by 2018, Jaitley said.
With exclusive grants coming in, villages will have regular road connectivity from 2019 onwards, he said. (Reopens DCM58)
"It is only in 2018 that every village in India should be electrified. Two years ago, we assessed that there are 18,000 villages to be electrified. Now almost at a very rapid pace those remote villages have been selected and I do believe that we will be able to meet that target," he said.
Stating that India was at "a very initial stage of rural development," he said, "Only towards 2019 that we believe that with additional grants coming exclusively from the government, villages would have a regular road connectivity."
The government corporate social responsibility (CSR) rule provides for corporates spending at least 2 per cent of their net profit on social initiatives with a view of giving back to the society.
"A few years ago when the idea of CSR was born in India, it was not free from doubt. There were many in the corporate world who felt that this was an additional tax which was being imposed. And therefore there was some resistance to the very idea," he said.
