The travel and tourism industries experienced a massive setback due to the COVID-19 pandemic, and companies within this industry have found it difficult to recover, especially with Omicron still making waves across the world. While most industries have begun to tread the path of recovery, the travel and tourism industry is still experiencing its impact, especially with the numerous restrictions being imposed across the world.
The government’s courses of action have, of course, helped this industry get back on its feet, but getting back to pre-COVID numbers is still a farfetched dream for many. Through the course of 2021, the industry experienced losses of around $2.4 trillion, which is why it has become more important than ever for the government to take the appropriate measures to improve the standing of companies within this sector, especially with the contributions it makes to the Indian GDP. This contribution further illustrates the fact that the tourism industry needs to bounce back, not just for the progress of its industry, but for the recovery of the country’s economic stability.
The 2022 budget has been a big topic of discussion for names within this industry, especially with the numerous policies that can truly aid its growth. Policies centred around employment, income tax benefits, incentives and investments can ensure that systemic changes are made to aid and boost tourism in India.
Also read:
One of the bigger challenges being faced in the Indian travel, tourism and hospitality industry is the massive labour cuts that surfaced. Many companies have experienced unprecedented losses and the workforce within this industry had to face the consequences. Around 35 million Indians are currently unemployed, which is why the government needs to take active measures to provide relief to those who have been economically impacted by COVID-19.
Companies within this industry have been vocal about policies that can work to provide relief in this regard, and the government needs to recognize these needs and frame policies that can aid the millions of Indians who are currently unemployed.
Taxation is another big facet of the budget that the industry has been vocal about. In the past, companies within this sector have been subjected to higher tax rates and these have persisted through the course of the pandemic as well. With the losses being faced within this industry, it would be beneficial if the government were to introduce tax waivers for the next two years.
A tax waiver could help this industry regain its profitability and can contribute massively to its overall recovery. In addition, providing low-interest working capital loans, flexible mortgages, creative financing options and non-refundable subsidiaries could provide much-needed relief to the travel, tourism and hospitality industry. Additionally, the introduction of a TDS tax relief to stakeholders within this industry can help it better adapt to changes in the future as well
Over the years, the travel and tourism industry has largely been noted as a non-essential sector. However, with the pandemic, more people have realised the importance of mental wellbeing, and have begun prioritising travel to break away from the monotony of their everyday life and Work From Home (WFH) culture. Keeping that in mind, the budget needs to look at the revival of the travel sentiment through stimulus packages and tax incentives for both personal and corporate travel.
With the demand that is currently prevalent for travel, a reduction in income tax can put more money in the hands of individuals, allowing them to then partake in travels that they have been looking forward to since the start of the pandemic. Tax exemptions for
travel and an increased LTA can make it easier for individuals to travel, thereby boosting the growth and recovery of the industry.
While there are numerous measures that the government can implement to ensure the revival of the travel sentiment and industry, this course of action needs to be implemented on a short-term basis for immediate recovery. Therefore, the Union Budget is incredibly important to aid the betterment of this sector and to strengthen the impact that it can make on the Indian economy.
-- The author, Rikant Pittie, is Co-Founder of EaseMyTrip. The views expressed in this article are the author's own.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
I.N.D.I.A. bloc committed to predictable and stable tax environment: Jairam Ramesh
May 21, 2024 6:33 PM
Exclusive | INDIA bloc will ensure stable policy framework, simple GST, end tax terrorism: Jairam Ramesh
May 21, 2024 5:02 PM
Cong leaders 'failed' to protect party's constitution says FM Nirmala Sitharaman in Bihar
May 21, 2024 4:01 PM
Who will succeed Modi? Oppn thinks Amit Shah will, but PM said this
May 21, 2024 2:38 PM