Madhavan Menon, Managing Director, Thomas Cook India points out that an official documents has showed travel and tourism has contributed Rs 2,17,810 crore to India’s GDP in 2013, accounting for a 6.8 percent share and is the third largest foreign exchange earner for the country.
"The government would do well to focus on key areas in the tourism sector in Budget 2015," Menon said.
Here's his wishlist:
Infrastructure: It is without doubt a mission critical to opening up of the tourism industry in the country. Immediate investment via allocation in road, rail, air connectivity and hospitality, in addition to hub and spoke airports; focus on leveraging cruising via river and coast waterways will see long-term benefits and result in a vibrant multiplier impact across both inbound and domestic tourism. While advocating higher investment intourism infrastructure we urge inclusion of the Public Private Partnership (PPP) mode.
Taxation Rationalisation and Catalysation: Standardisation of taxes across state borders would at once greatly simplify the tax structure bringing in welcome standardisation.
Notifying ATF (Aviation Turbine Fuel) as a ‘declared good’ would bring much relief to the already burdened aviation industry and benefit the travelling public.
Promotion of the Maintenance, Repair and Overhaul (MRO) sector: This including lowering VAT on MRO activities, removal of service tax, 10-year tax holiday and abolition of central excise duty on MRO will also serve to boost Prime Minister Modi’s Make in India The current unviability of the MRO market at a 30 percent higher pricing vs neighbouring Sri Lanka, Dubai, Singapore, Hong Kong, and China is due to the 12 percent service tax levy.
Tapping hitherto untapped opportunities: Besides the favoured and popular tourist routes, the government could do well to train its sights on untapped opportunities, both geographically (as has done in showcasing the potential of Gujarat state), as also new interest based initiatives (cuisine, outdoor-adventure, local/village stays, etc.) via tax breaks. For example, the medical tourism market in India is projected to reach US$ 3.9 billion year given its compounded annual growth rate (CAGR) of 27 per cent over the last three years according to a joint report by FICCI and KPMG. Further, the, inflow of medical tourists is anticipated to surpass 320 million by 2015 vv 85 million in 2012.
Strategic initiatives like granting tax incentives via LTA/LTC programmes to boost consumer uptake across tourism-hospitatlity verticals.
Export status to the Travel & Tourism industry. Given that earnings for the inbound sector are in foreign exchange and higher than other export sectors, this offers the government a logical next step to extending export status to the industry. On the taxation issues, the Economic Survey 2014-14 rightly pointed out that VAT Refunds as done in countries like Thailand and Singapore would augur well for the inbound tourism sector. A case in point being China’s recent tourist tax refund scheme whereby foreign tourists receive a rebate of up to 11 percent on consumer goods purchased at designated departmental stores. Quick implementation and increase in the countries covered by the Tourist Visa on Arrival (TVoA) enabled with Electronic Travel Authorization (ETA) Scheme will ensure quick wins for the Inbound season in Q4 2015.
Focused marketing and communication programmes. While this is essential at an international/inbound tourist level, the Incredible India campaign cannot afford to ignore the significant and captive audience of both domestic tourism and MICE sector (WTTC’S Economic Impact Report indicating that revenue from domestic tourism was expected to grow 8.2% in 2014 compared with 5.1% a year ago; Euromonitor’s Nov 2014 report highlighting the fact that domestic tourism is expected to grow at a CAGR of 13 percent in terms of number of trips
Safety of women and Sanitisation: While oft spoken of, must see inclusion via allocation and time lines. tax incentives and private corporate participation for the later would be of strong value. While according to the WTTC Economic impact 2014 Report, India ranked a mere 135 (out of 184 countries), in terms of relative size- contribution to GDP in 2013, the fact that Tourism is a key peg of Prime Minister Modi’s manifesto bodes well for the Travel & Tourism Industry and we now look forward to effective manifestation via strong representation in Finance Minister Jaitley’s Budget 2015-16.
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Updated Date: Feb 23, 2015 16:20:47 IST