The foreign exchange earnings (FEE) from tourism amounts to roughly 23 billion U.S. dollars.
The hospitality industry feels dejected and is extremely disappointed with the Union Budget. Tourism contributes 7.5 per cent to India’s overall GDP and hospitality is the backbone of tourism. Hospitality is the single biggest contributor to India's tourism GDP and its growth or decline or stagnancy directly reflects on the health of tourism in the country. The foreign exchange earnings (FEE) from tourism amounts to roughly 23 billion U.S. dollars and once again the largest chunk of this earning is generated by the hospitality industry. This doesn’t stop here the industry also contribute in creating one of the highest no. of jobs in the country contributing about 12 per cent of the Indian workforce and is one of the biggest employers of unskilled and semi-skilled labour.
“The hospitality sector has been once again almost entirely ignored in the Union Budget. What the Government needs to realize is that Incredible India will be a success only when the Hospitality industry, which is a key driver to our economic growth gets right attention,” shares ," Dilip Datwani, President, Hotel and Restaurant Association of Western India (HRAWI).
According to a KPMG report, the hospitality sector is expected to grow at a CAGR of 16.1 per cent to reach Rs.2796.9 thousand crores in 2022. Despite having hospitality as an asset at its disposal which can propel the country’s growth, the Government has yet again chosen to ignore its potential. Though, developments in ancillary sectors like infrastructure and aviation are certainly positive but that alone isn’t adequate. Promoting and encouraging investments in hospitality can place India on the map of the tourism destinations of the world. “Undoubtedly infrastructure development and improving connectivity will help the tourism sector however with no specifics spelled out, we are not exactly sure how it could benefit the hospitality sector. We were hoping to hear from the Finance Minister reforms on taxation which would have made Indian tourism competitive with neighbouring tourism countries,” adds Rishi Puri, Vice President, Lords Hotels & Resorts. While ease of living has been given importance to, and which is great, ease of doing business remained a dormant subject.
Similarly, the year was bitter for the growth of restaurant sector as well. The industry has been singled out by removal of the Input Tax Credit being only industry which does not receive this benefit. And, the sector was expecting the government to re-introduce ITC for restaurants.
Not only this, restaurant industry with a size worth Rs 3,52,000 crore which is expected to grow to Rs 5,52,000 crore by 2022 is generating over 8 million jobs, and demands single window clearance and reduction of licenses which is way to huge as compared to all the global food destinations. “I warmly welcome the budget although it doesn’t have much to offer the restaurant industry. But government’s decision of allocation a corpus of Rs 10,000 crore to fisheries, animal husbandries, and related infrastructure will surely benefit our business as due to high demand and lower supply of meat products, at times we have to purchase food items at a much higher price,” points Ashish Bahukhandi, Founder Dudleys.
With all the expectation that remained unanswered for the sector’s growth this year’s budget has fallen short of expectations for hospitality.