Will take up hospitality industry demand on infrastructure status with the Ministry of Finance: Tourism Ministry

The tourism ministry is likely to take up the matter of granting an infrastructure status to the hospitality sector and some other pre-budget proposals of the industry with the ministry of finance and commerce, a senior official said.

“We will take it (infrastructure status demand) up with the ministry of finance. We are supporting and taking up the industry demands. We are in dialogue with the commerce ministry regarding the Service Exports from India Scheme (SEIS). I’m confident we will have a decision and we are sure when the right time comes, the government will take the appropriate steps,” he added.

The Indian Association of Tour Operators (IATO) an industry body which represents more than 1,700 operators specialising in inbound tours has said that for FY20, the SEIS benefits have not yet been released.

SEIS benefits are given to the tourism industry based on its foreign exchange earnings under the overseas trade policy, and these funds are used for promotions, marketing and packages to attract more foreign tourists.

The hospitality and tourism sectors had put forth recommendations such as granting an infrastructure and industry status to hotels, restaurants and resorts and classifying hospitality under RBI’s infrastructure lending norms criteria for access to long term funds besides granting a MAT waiver to the industry for a period of three years beginning April 2021 to March 2024.

Recognising tourism industry at par with merchandise exports and making export earnings tax free and SEIS of 10% to all foreign exchange earning members in tourism to be made applicable for 5 years to ensure a post-Covid recovery were among the other demands.

Singh said the tourism ministry is in touch with the home affairs ministry and the ministry of health and the government will take a ‘calibrated’ approach -depending on the progress of vaccination-on opening up the country for overseas travel.

Singh said there has been a ‘significant’ increase in the budget allocation for the tourism sector this year.

“The budget allocation of Rs 2026.77 crore is 61% higher than the revised estimates of last year. Last year all the budget estimates were lowered because of the financial impact of Covid. The major theme on infrastructure in the budget is a significant positive for the sector ,” he said and added that India’s performance in the management of the Covid 19 pandemic is another advantage.

“It is coming back in a virulent form in many developed countries but we are significantly progressing. The cases are going down. The vaccination programme has been rolled out. This will inspire a sense of confidence and will help us project India as a safe destination,” he added.

Singh said out of the overall budget allocation, Rs 950 crore will be spent on the creation of tourism infrastructure in various schemes, Rs 670 crore will be spent on promotional activities, and the rest on training and capacity building programmes.

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