Over the next few days, the big discussion will be the Union Budget 2022, which will shape the major decisions taken by industry stakeholders – whether it is related to business policies, project rollouts, technology investment or workplace choices.
Here is the wish list hospitality professionals have for the Finance Minister, Nirmala Sitharaman. They tell us how the Minister can spur business revival, boost the economy by incentivising consumers to travel, and spend more, and influence domestic tourism, by giving benefits for the creation of home stays and villas. Moreover, they outline how announcements made on 1st February will impact every aspect of their business.
Aashish Gupta, Consulting CEO, Federation of Associations in Indian Tourism & Hospitality (FAITH)
The Union Budget 2022 is the right opportunity to undertake corrective actions for tourism travel and hospitality and set it up both for survival and thereafter revival. Amongst other things, Federation of Associations in Indian Tourism & Hospitality (FAITH) is taking up with Ministry of Tourism and Ministry of Finance on priority infrastructure status for hotels, export status for forex earnings for tour operators & hotels, abolishment of TCS on travel to provide a relief or travel agents, extension of ECLGS moratorium for 5 years, a provision for a revised seis like export drawback duty credit of 10% in the upcoming foreign trade policy and wage support for tourism employees till revival happens.
Additionally free tourist e- visa should made applicable till inbound Tourism recovers. Domestic tourism to be supported by both iIndian citizens and corporates being entitled to income tax exemption on undertaking their holidays and events in India through GST registered service providers. A committee should be set up to propose a compressive GST reforms for tourism.
Deepak Purohit, Founder, 36 Lebzelter
The latest wave of COVID-19 has once again plunged the hospitality sector into uncertainty, which will make new investments in the sector not only less but practically nil. The government needs to provide access to softer funding and give longer durations to pay off loans to investors to make restaurant investments attractive and sustainable.
An increase in investment in the sector will ultimately lead to better development and more jobs. It is also crucial for the government to support the sector to enable to promote hospitality.
Bharat Malu, Director, Chymey
There are lots of expectations from the 2022 Union Budget. Startups have been hailed by the Indian government as one of the key segments that will aid the economy’s progress and take it to the next era. To aid this vision, we need higher allocation of funds for seed funding by investors and incubators.
Tax holidays for startup companies with under INR 20 crore revenue will encourage more entrepreneurs to take the plunge. A lot of the startups are now tech driven or tech enabled. If we are to host the next big tech revolution and /or create the next Amazon from India then a deeper look is required at forming more technology parks.
Dilip Modi, Founder, Travel Union
Budget 2022 should focus on lending substantial support to the travel industry. Right now, it is important to revive the industry by taking initiatives that protect small and medium businesses operating in the sector while extending a helping hand to travel agents.
Providing tax relief in the TDS and GST applicable to travel agents and SMEs will go a long way in doing just that. We need to build and focus on rural travel as well since it is one of the aspects of the travel sector that needs our focus and investment. Investment in technology can play a pivotal role in bringing the next wave of innovation, employment and development in the travel industry.
Farman Beig, Co-founder & CEO, Wat-a-Burger
It takes multiple licenses to establish a food & beverage business in India. We expect the government to address this in the upcoming budget. Additionally, the sector requires reintroduction of the inputs tax credit. Also, considering the sector has been struggling due to the pandemic havoc, it is necessary to provide it with relief package and special fund allocation for speedy recovery.
Hina Nagarajan, MD & CEO, Diageo India
We encourage the government to continue to push pro-growth and employment creation reforms for consumption revival across income classes. The alco-bev industry has witnessed unprecedented inflation over the last year, and yet is unable to offset this through corresponding increase in its selling prices due to price control by States. We urge the Central Government to encourage states to provide pricing flexibility to alco-bev companies to offset inflation, an option available to all other consumer product industries, as well as pricing regulated sectors such as pharma.
Rakshit Sharma, CEO and Director on Board, Intellistay Hotels
Hospitality sector was the first to be affected and last to be recovered in pandemic. Due to the prolonged impact, the industry has incurred significant losses.
The Union Budget should immediately look at boosting domestic tourism. For this hospitality and travel industry needs an emergency resuscitation plan starting with reduction in GST to encourage people to travel domestically. In order to support the sector further, the government should permit the corporate bookings to come under IGST. This will help the companies to avail GST input credit.
The government should also offer low interest loans which will help us in recovering the losses. We are hopeful that that the Union budget will allocate sufficient resources to help the sector stronger out of these times.
Sonica Malhotra Kandhari, Joint MD, MBD Group
The fresh wave of COVID-19 cases has pushed the hospitality industry into uncertainties, government interventions are imperative for the sector’s survival and its return to normalcy. Therefore, we would urge the administration to grant infrastructure status to the hospitality sector as it will enable easy access to long term funding, lower interest rates, utility tariffs and simplified approval process for projects without criteria of INR 200 crore investment excluding land in the hotel.
Secondly, to survive these challenging times, we request the government to provide measures such as extended moratorium, rationalisation of taxes and facilitating ease of doing business. Also, availability to softer funding and resultant shortening of the gestation period will make hotel investments more attractive and sustainable.
Corporate bookings and MICE events should also come under IGST as it will encourage corporates to use domestic hospitality services being availability of GST input credit. Also, a liberalised view must be taken to allow input tax credit paid on construction cost of immovable property including hotels.
Teja Chekuri, Managing Partner, Ironhill India
We would like the Finance Ministry to take a look at the GST regulations in the hospitality, food and beverages industry. We don’t get any input but have to pay GST – ranging from 18% to 28% – on a lot of items we purchase ranging. This directly impacts the margins and has a domino effect and impacts the customers directly. The reduced margins reflect directly in the increased menu pricing which impacts customers and in turn effects the number of walk-ins.
Vineet Verma, Executive Director and CEO, Brigade Hospitality
Hospitality and tourism sectors have been the worst affected during this pandemic. The impact has been widespread and are unfortunately expected to be long lasting. While both the Centre and State governments have tried to extend their support to some extent, the sectors need more long term resuscitation measures in order to get back on track.
Reduction in GST rates to help boost larger spends, according Infrastructure status to hotels, lower interest rates on borrowings, reduction in property taxes, partial if not full waiver of other licence fees including Liquor licences, lower power tariff, are some of the boosters that our industry so desperately needs at this point of time.
