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Finance Minister Nirmala Sitharaman presented the Union Budget 2024 today, with this budget, she is India’s only Finance Minister to present seven budgets consecutively.
Sitharaman takes spiritual tourism forward with Kashi Vishwanath, Nalanda and more…
The finance minister proposed supporting the development of corridors at Vishnupad Temple and Mahabodhi Temple, following the model of the Kashi Vishwanath Temple. Additionally, the government will back the development of Nalanda in Bihar as a tourist center. Finance Minister Sitharaman also announced that an economic policy framework will be introduced to usher in next-generation reforms aimed at boosting economic growth. Furthermore, the government will provide assistance to Odisha for the development of tourism, as stated by the FM in Lok Sabha.”
Tourism boost to states of Odisha and Bihar
Centre to provide assistance to Odisha in developing tourist attractions. Known for its scenic beauty, temples, craftsmanship, and wildlife, Odisha holds great potential as a tourist hotspot. The government aims to leverage these assets to attract more visitors to the state.
In Bihar, the Vishnupad Temple Corridor and the Mahabodhi Temple Corridor are set to undergo comprehensive development. Rajgir, another historically significant location, will see extensive development. Additionally, Nalanda is set to be developed as a major tourist centre with plans to revive the prestigious Nalanda University to its former glory.
Fllip to cruise tourism
Industry data showed that cruise tourism in India has hit a new high, with footfall touching 4.7 lakh in 2023-24, higher than the pre-pandemic period. Out of this, over four lakhs were domestic tourists.
“There is tremendous potential for cruise tourism in India. To give a fillip to this employment-generating industry, I am proposing a simpler tax regime for foreign shipping companies operating domestic cruises in the country.”
Budget 2024 on connectivity and infrastructure to boost tourism
Sitharaman reiterated the government’s commitment to improving connectivity to boost tourism. As part of this strategy, the Amritsar-Kolkata industrial corridor will see the establishment of an industrial node in Gaya.
An allocation of INR 26,000 crore has been made for critical infrastructure projects in Bihar. These include the construction of the Patna-Purnea expressway, the Buxar-Bhagalpur highway, a two-lane bridge over the Ganga river in Buxar, and the Bodhgaya-Rajgir-Vaishali-Darbhanga corridor. According to the Finance Minister, these projects are vital for spurring growth in the eastern region of the country.
“Continued focus on infrastructure”
Anuj Puri, Chairman – ANAROCK Group said: “Covering a wide spectrum of Indian sectors, the first Union Budget of Modi 3.0 focuses on MSMEs, employment, skilling, youth, and the middle class. It will generate a mixed bag of reactions from different sectors. From a real estate point of view, the first thing that stands out is the government’s continued focus on infrastructure with an allocation of over INR 11.11 lakh crore – nearly 3.4% of India’s GDP. Improved infrastructure drives real estate growth.
Mega allocation for the Hyderabad-Bengaluru industrial corridor and Vizag-Chennai corridor will boost growth along these corridors and consequently boost real estate growth there. The FM also tried to rejuvenate the MSME sector, which does have a multiplier effect on overall economic growth – with the implied positives for real estate as a collateral beneficiary of such growth.”
“Reduction the TDS rate on e-commerce operators to 0.1% is positive”
Rajesh Magow, Co-Founder & Group CEO, MakeMyTrip, said: “The government’s continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. We also welcome the initiatives to develop iconic spiritual and cultural sites into world class tourist hotspots.
The decision to reduce the TDS rate on e-commerce operators to 0.1% is a welcome move. Furthermore, the provision of credit for TCS against income tax under ‘Income from Salaries’ is logical and will provide much desired relief to taxpayers who travel internationally.”
“We can meet the increasing demand for spiritual experiences”
Nikhil Sharma, managing director and area senior vice president- South Asia, Radisson Hotel Group said: “We welcome the Union Budget 2024-2025 which focuses on positioning India as a global tourism hub through progressive initiatives. The surge in spiritual tourism has been recognised, and we are excited to see the sector receiving much-needed support in this year’s budget.
The development of road connectivity projects, with a special emphasis on spiritual and cultural corridors, underscores the Government of India’s commitment to fueling the growth of the country’s rich cultural and spiritual network of tourism. At Radisson Hotel Group, we have always focused on Tier II and III cities, leveraging a first-mover advantage with 50% of our portfolio in these regions. Our strategic commitment to these destinations aligns with the government’s vision, allowing us to meet the increasing demand for spiritual experiences and further strengthen our presence across India. We are optimistic that this development will not only propel the domestic tourism sector but will also provide an opportunity for foreign tourists to further explore the rich culture of India.”
“No policy announcement to facilitate the development of hotels”
K.B. Kachru, chairman emeritus and principal advisor, Radisson Hotel Group South Asia & President – HAI, said: “Continued focus on infrastructural development, fiscal prudence, and consolidation. Tourism continues to be accepted as an engine of growth for the economy. Emphasis on spiritual tourism, however, no policy changes to expedite growth.
Tourism and hospitality play a crucial role in the growth of the Indian economy. The continued focus on government spending on infrastructure development augurs well for the sector. Improved infrastructure would translate into better connectivity, which will be beneficial to the promotion of tourism. The development of the eastern region, temple corridors in Gaya and Bodhgaya, and identification of Nalanda as a key tourism site continue to demonstrate the government’s intent to utilize the potential of tourism. Regrettably, however there has been no policy announcement to facilitate the development of hotels and promotion of inbound tourism. The announcement of GST simplification, and comprehensive review of the Income Tax Act provides some hope for the sector that has been seeking rationalization of taxes. The benefits to individuals on taxation will augment the spending power. The focus on skilling and incentivizing employers for creating jobs are other positives that will benefit all sectors.
Although not directly linked to this budget, the industry would continue its ask for granting of infrastructure status for the hospitality sector and industry-related benefits by all state governments.
“Hospitality sector is disappointed but not dejected’
Pradeep Shetty, president, FHRAI said, “The hospitality sector has been pinning high hopes on the Union Budget for 2024- 25 presented by Nirmala Sitharaman today, on the backdrop of the Government of India’s stated vision of Viksit Bharat by 2047 and the critical role tourism industry holds in achieving it. However, there is nothing spectacular in the budget to bring structural changes to address the fundamental challenges it faces in a competitive world order and to accelerate the growth of the sector to be a $ 3 trillion economy by 2047.
Some key demands of tourism & hospitality to revitalise the sector such as GST rationalisation, granting of infrastructure status and bringing ease of doing business and policy reforms have not been considered in the budget once again, given the well accepted multiplier effect of tourism on employment and economy. The hospitality sector is disappointed but not dejected as the overall focus on infrastructure development, employment generation and skill development and development of religious tourism centres are the silver linings which will help the sector to tide over some of the critical challenges that it faces today. The focus of Budget 2024 on youth employment, skill development and job creation are welcome initiatives. The industry has been facing a shortage of skilled workforce,especially in the hospitality sector.
It is also laudable that the Finance Minister’s Budget speech highlights the Governments’ commitment to make India a premier global travel destination through targeted investment and strategic initiatives. Development of iconic spiritual sites along with promotion of cruise and beach tourism can be helpful in attracting both domestic and international tourists.
“Internship for 1 crore youth to gain industry experiences”
Raghav Gupta, managing director, APAC and India, Coursera said: “The Union Budget 2024-2025 showcases a crucial commitment to boosting education, employment, and skill-building capacity, perfectly aligning with the Government’s vision of Viksit Bharat by 2047. The budget’s special focus on skilling 20 lakh youth over the next five years through centrally sponsored schemes, the upgradation of 1,000 training institutes, and the provision of skilling loans are steps in the right direction.
I am particularly excited about the provision for 1 crore youth to gain industry experience through internships with 500 top companies – this will bridge the gap between theory and practice. The cross-sector collaboration can address the rapidly growing skills gap and social inequities, ensuring students transition smoothly into high-demand job roles. Businesses will also benefit from a diverse and skilled talent pool, reducing recruitment time and costs.
In today’s digital era, where talent can emerge from anywhere, access to digital skills will be a game changer. We’re excited to support these initiatives and provide millions of Indians a gateway to more equal opportunities, all while unlocking our demographic dividend and accelerating our journey towards a $5 trillion economy.”
“Removal of angel tax is expected to be a game-changer for startups”
Naina Parekh, founder, EUME added: ‘The Union Budget 2024-2025 brings several transformative changes for the growing D2C sector. The reduction of the TDS rate for e-commerce operators from 1 percent to 0.1 percent likely to ease their financial burdens for e-commerce businesses, allowing them to concentrate more on scaling their operations and driving innovation. The proposed removal of angel tax is expected to be a game-changer for startups. This move could simplify the fundraising process and reduce the tax-related challenges faced by new ventures, fostering a more supportive environment for entrepreneurial growth.”
Furthermore, the new eco policy framework has put spotlight on the development of tourism and regional growth in states like Bihar and Odisha. These states are projected to emerge as significant growth hubs, and this focused attention could stimulate local economies and open up new markets for D2C brands.
“Presumptive taxation for cruise ship operations “
Rikant Pittie, Co-Founder, EaseMyTrip said: “”The government’s attempt in positioning India as the global tourist destination is evident in the Union Budget 2024-25. Demonstrating efforts to promote religious tourism and domestic tourism infrastructure. With special focus on Bihar, Nalanda, and Odisha, the government plans to develop the iconic religious sites to support its infrastructure and transform them into world class pilgrim and tourist destinations. We are optimistic that this will enhance the overall experience of the tourists visiting these religious sites and will uplift the state tourism.
Additionally, the government has also shown interest in simplifying taxation in cruise business by proposing a presumptive taxation for cruise ship operations in India. This initiative aims to encourage foreign cruise owners to operate in India, thereby providing a significant boost to cruise tourism in the country.”
“Improving connectivity to offbeat destinations”
Sandeep Arora, director of Brightsun Travel, India said: “We welcome the 2024 budget, especially the focus on boosting spiritual tourism which not only honours the country’s rich cultural heritage but also opens up new avenues for travel and tourism. The special focus on Bihar and Odisha will see extensive development and promotion of religious and historical sites such as Bodh Gaya, Rajgir and Nalanda. Odisha also has a great potential as a destination for religious and beach tourism. The new initiatives to improve infrastructure and connectivity in these offbeat destinations will attract both domestic and international tourists, offering a much-needed boost to the local economy.”
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