This is the fourth time that Finance Minister Nirmala Sitharaman presented the Union Budget, but this year marked her shortest speech. Closer towards the end of her monologue, she said, “We recognise post 2nd wave of Covid-19, hospitality sector was in difficulty and needed support.”
This gave some hope to industry stakeholders who were closely following her speech. She then stated, “Since Emergency Credit Line Guarantee worked well for MSMEs, we thought this is the best formulation. We have added INR 50,000cr to ECLGS for the benefit of hospitality, related sectors.”
This particular statement was the biggest takeaway for most people in the industry. Padma Shri Sanjeev Kapoor, Founder of Food Food Network and Wonderchef, welcome this extension of the ECLGS scheme by INR 5,000 crores for the hospitality and related sectors. “It’s good to see the mention of the hospitality and related sector in this year’s Budget. The past few years have been tumultuous for the hospitality segment, and I am hopeful that this initiative gives the industry a much-needed boost.”
Most people in the sector added that the Union Budget is a good start for the segment, which desperately needed financial assistance and infrastructural support. Restaurateur Dharmesh Karmokar, Director, ESORA called it a “naya Bharat budget sans shocks and gimmicks and one that was encouragingly focused on growth. “Overall, I see rural tourist places doing well with all investment on infrastructures like roads, bridges and ropeways,” he added. “New trains and routes will see a lot of domestic travel and generate consumption. Even real estate has been given a good push.”
These initiatives will help create more jobs in the hospitality sector, which saw massive lay-offs over the past couple of years. Kabir Jeet Singh, CEO and Co-founder, Burger Singh pointed out that the hospitality sector accounts for 39 million jobs or 8% of India’s total workforce. “The extension of the ECLGS by one more year, with an additional amount being earmarked exclusively for the hospitality and related enterprises is a big boost to the sector. It will strengthen investments and create millions of additional jobs,” he said.
While welcoming these twin moves, Ajit Shah, F&B Angel Investor and Designated Partner at White Panda Hospitality also expressed his delight on the rolling out of ePassports, which was proposed a few months ago by the External Affairs Minister, S Jaishankar. However, the hospitality industry still remains incredibly fragile and faces myriad critical issues such as rising inflation, higher utility bills, wages and raw material costs.
“I strongly feel that the industry needs a tax holiday wherein we get relief from paying taxes for a year, along with temporary relief to comfort the cashflow crisis which has affected the vital functionality of the industry,” Shah opined, adding that these issues should have ideally been addressed in the Budget.
Tarak Bhattacharya, Executive Director at Mad Over Donuts, also felt that the Union Budget did not pay particular attention to the hospitality industry, which bore the pandemic’s brunt more than most other sectors. “We were hoping for some relief or some measures that would help the industry in the months and years to come. However the bright side is the push to local tourism,” he stated while looking at the bright side.
The introduction of new trains and routes is expected to give domestic travel a further fillip, and generate more consumption. This is especially pertinent since the recovery of international travel might take more time, considering the threat of more COVID-19 variants.
Aloke Bajpai, Group CEO and Co-founder, ixigo, pointed out that the government has taken a step in the right direction with the introduction of e-passports. Besides boosting security, it will make inbound international travel convenient by cutting down long queues at immigration counters and supporting a faster revival of international travel in a pandemic-driven environment. “The current budget’s focus on modernising infrastructure and expansion of highways under PM Gati Shakti will give impetus to intercity mobility by connecting major economic hubs and saving travel time for people,” he added.
