Budget 2024: Restaurants, hotels optimistic on govt support to push growth in hospitality sector
As India looks to attract more tourists and build tourism as another area to push economic growth, the hospitality industry, which is a key to boosting tourism, has lots of hopes for measures to be pushed in the upcoming interim budget.
K.B. Kachru, Chairman Emeritus and Principal Advisor, Radisson Hotel Group, South Asia, pointed out that the tourism and hospital industry continues to be a key contributor to India’s Gross Domestic Product (GDP). To encourage greater local investments and bolster the global competitiveness of Indian hotels, a fully-developed infrastructure status should be approved for the hotel sector, along with further rationalisation of the Goods and Services Tax (GST).
Kachru said, “Streamlining the complex web of approvals, licenses, and classification-related processes for hotel projects is necessary to ease off the burden from the industry and infuse efficiencies. As a capital-intensive and people-centric industry, investing in skill development is crucial for delivering high-quality services and experiences to visitors while generating direct and indirect employment opportunities.”
Moreover, to attract inbound tourist traffic, the government should hold a discussion about simplifying the visa process or approving visa-free arrival, suggested Kachru. The government should also focus on allocating funds to promote eco-friendly accommodations and tourist sites, in addition to introducing incentives for industry players aligned with the United Nations Sustainable Development Goals to foster sustainability in tourism.
Infrastructure investments that bolster accessibility to tourist destinations, enhance the industry's overall appeal, streamline regulatory processes, facilitate ease of doing business, and foster entrepreneurship are some of the tasks that the industry is eyeing ahead of the interim budget.
Pranav Rungta, Co-Founder and Director of Nksha restaurant and Vice President of NRAI Mumbai, emphasised the need for policy and budgetary support in the interim budget to propel the sector towards accelerated growth.
Highlighting the key measures, Rungta said, “The key areas of focus include the restoration of the GST Input Tax Credit, reinstating the Service Export from India Scheme, establishing a dedicated Food Services Ministry according to industry status, reducing GST on eco-friendly materials, addressing GST on commercial rentals, rationalising licences and NOCs, ensuring equitable e-commerce policies, extending operating hours, implementing targeted subsidy schemes for SMEs, and introducing an employee welfare plan.”
According to Rungta, these measures will not only boost the overall size of the industry but also generate significant employment opportunities, contributing to the country’s economic growth. Rungta pointed out that the restaurant industry has generated more than 7.20 million direct jobs and has registered an annual turnover of about ₹4.23 lakh crores.
To ease the burden on businesses in the hospitality industry, the government should reform taxes, continue providing support for infrastructure development, and streamline regulations as the industry vouches for robust financial support amid the global instability, said Saurabh Gahoi, Vice President, India, Ramee Group of Hotels.
“A reformative budget, targeting training and skill development, ensures a resilient and competitive landscape. As the nation redefines its economic roadmap, the hospitality industry eagerly awaits policies that foster innovation, sustainability, and a flourishing tourism ecosystem,” said Gahoi.
