 "Rajasthan tourism, Desert, tourist")
A slew of announcements made in the Union Budget to support tourism will give a fillip to the sector by creating new opportunities, driving growth, and fostering a more inclusive ecosystem, according to industry stakeholders.
Finance Minister Nirmala Sitharaman in her Budget speech on Saturday announced that the Central government will develop top 50 tourist destinations in partnership with states through a "challenge mode"
“The challenge-mode approach to developing 50 destinations, backed by performance-linked incentives, shifts the focus to outcome-driven execution — encouraging states to compete and innovate in destination management,” said Rajesh Magow, co-founder and group chief executive officer (CEO), MakeMyTrip.
The land for building key infrastructure at these destinations will be provided by states, while hotels will be included in the harmonised master list (HML) of infrastructure, said Sitharaman.
The government also announced plans to bolster homestays with Mudra loans, which will enable small enterprises to expand services and assist local economic growth.
Also Read
“Hotels in the harmonised infrastructure list across 50 destinations will unlock long-term financing and drive investment, while extending Mudra loans to homestays ensures that smaller entrepreneurs and local communities are equally part of this growth story,” Magow said.
The finance minister also said the government will streamline e-visa facilities for certain foreign tourist groups to bolster foreign tourist arrivals (FTAs) in the country. FTAs in India have witnessed a slow recovery and rebounded to pre-pandemic levels in 2023.
The Economic Survey pointed out on Friday that this slowdown was a major concern for the industry, and noted that the share of India's FTAs in the world FTA stood at 1.45 per cent in 2023.
Sitharaman announced that in a continued push to spiritual tourism, focus will be on destinations linked to the life and times of Lord Buddha.
The government will also look to promote medical tourism in the country in partnership with private players, work towards easing travel and connectivity to tourist destinations, while providing performance-linked incentives to states.
“By curating world-class experiences and investing in infrastructure, India can strengthen its appeal as a premier hub for leisure, heritage, and experiential tourism. Additionally, the renewed emphasis on Buddhist Circuit tourism is a strategic move to boost footfall from Southeast Asian countries, tapping into an underutilised yet high-potential market,” said Navneet Nagpal, principal consultant and director at hospitality consultancy firm Spectra Hospitality Services.
Initiatives like financial support for homestays and skill development will also create meaningful economic opportunities at the grassroots level, fostering a more inclusive tourism ecosystem, Nagpal added.
“The increase in the tax exemption ceiling to Rs 12 lakh enhances disposable income, which could translate into higher discretionary spending on travel, both domestic and international,” said Mahesh Iyer, managing director and CEO, Thomas Cook (India) Limited.
“The rationalisation of Tax Collected at Source (TCS) on remittances under the Liberalised Remittance Scheme gives a boost to the sector,” he added.
The tourism ministry was allocated Rs 2,534.93 crore in the Budget, marginally up from the budgetary estimate of Rs 2,479.62 crore in the preceding Budget. Last year’s revised estimate came in at Rs 850.36 crore.
“The Budget is progressive, especially with its focus on tourism and job creation. This year’s Budget very well highlights the importance of promoting spiritual and medical tourism with neighbouring countries and simplifying visa processes to enhance international travel. Overall, the initiatives taken by the government in this year’s Budget are the steps in the right direction for the industry,” said K B Kachru, chairman, Radisson Hotel Group South Asia and president, Hotel Association of India.
