Budget 2023 | Finance Minister announces to take promotion of Tourism sector in mission mode 

"In addition to aspects such as physical connectivity, virtual connectivity, tourist guides, high standards for food streets and tourists’ security, all the relevant aspects would be made available on an App to enhance tourist experience. Every destination would be developed as a complete package. The focus of development of tourism would be on domestic as well as foreign tourists," she added.

Additionally, the Centre will take initiatives to set up tourism at border villages as well as encourage the State capitals to set up a unity mall  so as to promote and sell one district, one product, along with other handicraft products.

"Sector specific skilling and entrepreneurship development will be dovetailed to achieve the objectives of the 'Dekho Apna Desh' initiative. This was launched as an appeal by the Prime Minister to the middle class to prefer domestic tourism over international tourism. For integrated development of theme-based tourist circuits, the ‘Swadesh Darshan Scheme’ was also launched. Under the Vibrant Villages Programme, tourism infrastructure and amenities will also be facilitated in border villages," she said.

The Centre, through the Budget, also proposed to hike the Tax Collected at Source (TCS) rate to 20 percent on overseas tour packages and a liberalized remittance scheme for remittance of funds out of India. Currently the TCS rate is 5 percent.

The Finance Bill amended Section 206C of the Income Tax Act levying a higher TCS on overseas tour programme packages.  As per the announcement, 20 percent TCS will be applicable in cases where funds in excess of Rs 7 lakh are sent out of India under the Liberalised Remittance Scheme of the RBI. The amendment will be effective from July 1, 2023.

The industry stakeholders welcomed some of the announcements of the Finance Minister and expressed concerns over some.

Praising the Centre’s decision to highlight tourism in the Budget, Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip said, “The union budget entails multiple welcome initiatives like the revival of 50 airports, the building of 50 new destinations, and high budgetary outlays on railways, roads, and highways, which will help long-term growth for the domestic travel and tourism industry.”

However, he said that, “one budget proposal that will negatively impact the industry is the move to increase the TCS mandate from 5 percent to 20 percent on overseas tour packages. This will not only increase the upfront cash outflow for customers but will also give an unfair advantage to foreign-based online travel booking platforms over India-based travel agents and tour operators.”

Ritesh Agarwal, Founder and Group CEO of OYO said this budget sets India up as the Startup Nation for the decade. It offers a roadmap for the holistic development of the nation, as we enter ‘Amrit Kaal’.

"We welcome the move to develop 50 cities across India as a complete package for domestic and international tourism, and developing an app to ensure all the key metrics related to travel and tourism for the said cities are regularly updated. We also laud the move to incentivise states to set up 'Unity Malls' in their most popular tourism destination for promotion of GI, 'Made in India' products and handicrafts." he added.

He further said that government's 'Swadesh Darshan Scheme' will provide a much-needed boost to rural and agriculture tourism.

"This will empower the farmers in building and setting up homestays that provide an additional source of income for them while also providing an authentic Indian experience to the travellers. OYO’s homestay projects in Ektanagar and J&K, in collaboration with respective state governments, have already yielded great results and helped boost tourism and overall economy in these villages," Agarwal added.

Nishant Pitti, CEO and Co-founder of EaseMyTrip called the announcements a positive outlook for the industry and said that taking up the agenda for promoting tourism in the country on "mission mode,"  will play a vital role in reviving the landscape of tourism in India.

"The initiative to provide additional infrastructural support with fifty new airports, heliports, water aerodromes, and advanced landing zones in India, along with the simplification of registration and overall regulations under the GIFT IFSC will pave the way for new entrants in the aviation industry, which has experienced increasing demand both domestically and internationally."

"Moreover, the introduction of the new Income Tax slabs will avail newer and better opportunities for people to travel and discover India’s rich diversity," he added.

However, Nakul Anand, chairman of apex industry body Federation of Associations in Indian Tourism & Hospitality (FAITH) said that the budget statement could have covered more direct support measures for the industry.

He said that while he was thankful that the FM has touched upon developing tourism on a mission mode along with destination development,  yet "the  Indian tourism, travel & hospitality industry was keenly looking forward to getting the vital infrastructure status, being treated at par with merchandise exports, to have gotten enhanced support to tourism for global marketing, to have had a directional positive guidance on GST issues for tourism and was looking forward to enhanced tax support mechanisms to tourism MSMEs."

On Tuesday, Union Tourism Minister G Kishan Reddy launched the 'Visit India Year 2023' campaign under tourism ministry to encourage inbound travel to the country, currently chairing the G20. The ministry highlighted that G20 presidency presents a fantastic opportunity to highlight the country's tourism offerings.

The minister also launched a logo of the campaign that draws inspiration from the visual representation of 'namaste'. It represents a "microcosm of the countless stories India holds" - from heritage to gastronomy to our art and our rich wildlife, and imbibes the country's philosophy of 'Atithi Devo Bhava'.

The hospitality and tourism industry which plays a major role in the GDP of the country had been waiting for favourable policies and announcements in this budget after facing disappointment from the Centre in the previous budget.

According to the previous year's Budget allocations, Finance Minister had announced a sum of Rs. 2,400 crore, 18.42 percent higher than the budget allocation of year 2021-22. However, the industry stakeholders were not much convinced with the budget announcements. They welcomed the extension of the Emergency Credit Line Guarantee Scheme (ECLGS), but were hoping for far more specific measures to be announced to provide relief to an industry, worst hit during the COVID-19 pandemic.

The industry which includes hotels, restaurants, bars, clubs, motels etc, was severely hit by the pandemic and faced a drastic drop in sales due to the lockdown and covid related curbs, for last two years. This year, however, the stakeholders said that they are looking forward to a fruitful and successful year as the  business has returned in their favour.

In a conversation with CNBC-TV18, Chander Baljee, CMD at Royal Orchid Hotels said, "The hospitality industry has bounced back like never before. I think these are the good times have come again, and so we are looking forward to a very, very great next few years."

Sarbendra Sarkar, Founder and MD, Cygnett Hotels & Resorts, said, "I anticipate that if the pandemic situation remains under control, 2023 will be a prosperous year for the tourism and hospitality sectors."