By Mr. Mandeep Lamba, JLL Hotels & Hospitality
For the first time in
recent history, the government in power had announced tourism as one of its
four pillars for growth. Consequently, the hospitality was looking forward to
significant new provisions in Budget 2014.
However, quite like in
most previous years, the government failed to give hospitality any notable
relief and stimulus for growth. Despite its 6.6% contribution to the GDP and
the fact that it created close to 40 million jobs in 2012-13, the Indian
hospitality sector continues to be a story of neglect from our policy makers.
Even today, India
receives only about 0.5% of the global tourist arrivals despite being a country
rich in history, culture, natural splendour and diversity. The fact that it has
still not been equipped to receive a better share of global tourism receipts is
puzzling and frustrating.
What Was Delivered in
the Budget..
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| Mandeep Lamba, India, JLL Hotels & Hospitality |
· The budget gave tourism some mention and
indicated plans for long-term growth by way of developing India’s pilgrimage
and heritage tourism circuits (PRASAD & HRIDAY schemes) and also provided
for the development of a world-class convention centre in Goa via the PPP
route. While these are welcome initiatives, these provisions will take between
five to ten years to impact the growth of domestic and international tourist
travel.
· The introduction of electronic visas and
visas-on-arrival initiated earlier this year can be a major game-changer for
Indian tourism with respect to foreign travel into India.
· The time-bound directive to implement e-visas at
nine major airports within six months is perhaps the best news that this budget
has delivered. This can have far-reaching consequences once implemented.
· The improvement and modernisation of railways,
proposed new airports of international standards and the thrust on improved
road connectivity augur well for the hospitality industry. These along with
other policy announcements regarding increased FDI in several sectors and
clarity on setting up of REITS, are catalysts for growth.
What
Was Ignored in the budget..
· The sector is desperately in need of incentives
in Tier 2 and Tier 3 cities to make hotel investments there reasonably
attractive
· The sector also needs better borrowing terms
through the infrastructure lending route, and relaxed ECB norms
· The sector needs to be spared from double
taxation through service and luxury tax/VAT at the state and centre levels.
Indian hospitality was looking forward to rationalisation of taxes and ease of
raising capital.
No economy can hope to
achieve and maintain any degree of sustainable growth and buoyancy without its
tourism and hospitality sector being given the necessary importance and
corresponding stimuli. As of now, the Indian hospitality sector is still trying
to shake off the lingering effects of the serious downturn it has been
experiencing for almost six years.
In short, from the
perspective of the Indian tourism hospitality sector, Budget 2014-15 failed to
deliver. The industry must continue to survive primarily on the basis of
die-hard optimism that it will eventually be given its rightful importance at
the policy level.
About the author
Mr. Mandeep Lamba is
Managing Director – India at JLL Hotels & Hospitality
For media contact
Arun Chitnis
Head – Corporate
Communications & Media Relations
JLL India, Pune
411001.
Tel: (020) 30930441 Fax: (020) 40196101
Mob: +91 9657129999
Tel: (020) 30930441 Fax: (020) 40196101
Mob: +91 9657129999
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