• While the Union budget has traditionally not envisaged reforms for the hospitality sector, after a year of losses from the COVID-19 pandemic, the travel and tourism industry will consider Nirmala Sitharaman to help the sector until demand picks up again.
  • Reforms are the only big word that every entrepreneur, every operator in this country expects from a travel and tourism brotherhood perspective, said Ritesh Agarwal of OYO.
  • According to the Hotels Association of India (HAI), around 70% of direct jobs in the hotel sector are at risk, while 40% of all hotels in India are on the verge of permanent closure.

The Indian travel and tourism industry believes that the 2021 budget cannot bring any relief to the ailing sector.

“It is hardest hit and can recover quickly because it has small businesses in this segment. Hence, getting all kinds of motivation and help is vital for small businesses. We have already received a lot of support from various support programs and we hope for more, ”said Ritesh Agarwal, Founder and CEO of OYO Hotels & Homes, at the recent Resurgence TiEcon Delhi – NCR event.

True, after a year of losses due to the COVID-19 pandemic, the Union budget has traditionally failed to implement reforms to the hospitality sector, as people stayed at home and flights remain banned in several countries, including India, travel and tourism, and industry becomes Nirmala Sitharaman will examine to help the sector until demand picks up again.

According to the Hotels Association of India (HAI), around 70% of direct jobs in the hotel sector are at risk while 40% of all hotels in India are on the verge of permanent closure.

And they have their own laundry list with expectations of budget rules, better regulations and policy choices.

Infrastructure status

advertising

Giving hotels infrastructural status is a key requirement in the industry that gives them access to better credit. “In this way, companies can use electricity, water and land on industrial terms while improving lending rates,” said Bhanu Chopra, founder and chairman of RateGain.

The HAI has also recommended that hotels with an investment volume of over GBP 25 million (excluding land) be declared as infrastructure.

Increase the vacation allowance

“With Leave Travel Allowance (LTA) one can expect an optimization, which is a tax break for travel expenses that can be claimed twice within a block of four years. You may see some relaxation there that allows for more domestic travel, or you may find yourself increasing that number instead of twice in four years. The extra increase is only possible if you actually travel, ”Hemal Zobalia, Deloitte Haskins & Sells LLP, told Business Insider in an interview.

HAI also said in its list of recommendations to the government that there should be a change to the rule. “The government can change the rules and allow citizens to use LTA benefits for hotel stays for a period of two years. The LTA exception should be available annually, ”said the HAI spokesman.

Income tax and GST relief

The industry is also betting on income tax cuts that will increase companies’ cash flow. The income tax rate is currently 30% plus a surcharge of 7% or 12% (based on income) and 4% dropout.

“Several tax-friendly changes such as easing the GST on bad debts and relaxing the ineligible list of pre-tax credits are urgently needed by the industry during the ongoing Covid era,” said Tushar Aggarwal, Founding Partner of Tattvam Advisors.

A natural and cultural heritage restoration fund of £ 2,000

To stimulate domestic tourism, the Federation of Indian Tourism and Hospitality Associations (FAITH) has proposed to set up a natural and cultural heritage restoration fund with a corpus of £ 2,000. According to the association, this will promote “sustainable and responsible development in every branch of adventure tourism and cultural tourism”.

SEE ALSO:
The airlines want the 2021 budget to cut fuel prices and parking fees
India needs to add a tremendous amount of solar and wind power capacity this year to achieve its first goal