Why government's spiritual tourism push lacks hotel development policies

Finance Minister Nirmala Sitharaman announced the Union Budget for the fiscal year 202425 on Tuesday making it her seventh consecutive budget She proposed measures for different sectors focusing extensively on nine priority areas productivity in the agriculture sector skill development and employment inclusive human resource development and social justice manufacturing and services urban development energy security infrastructure innovation research and development and next generation reformsWhile tourism didnrsquot occupy a large space in the budget announcements some key measures were introduced that will directly or indirectly impact the travel and hospitality sector in India The tourism sector has been allotted a budget of Rs 247962 crore for 202425Recognising the surge in travel and Indiarsquos growing prominence as a global tourist destination FM Sitharaman stated ldquoTourism has always been a part of our civilization Our efforts in positioning India as a global tourist destination will also create jobs stimulate investments and unlock economic opportunities for other sectorsrdquoAlmost all major initiatives introduced for tourism are infrastructurebased and broadly centered in the states of Bihar Andhra Pradesh and Odisha With an extensive focus on spiritual and cultural tourism the Union Budget measures are expected to shape and change travel trends in the country in the upcoming yearsWhile travel and hospitality companies are optimistic about the measures introduced and view them as a way to advance domestic tourism several associations have expressed their disappointment over ignorance of key demandsHere we decode the key measures introduced for the travel hospitality and transportation sectors and speak to industry leaders to understand how this budget will shape travel in IndiaKey Highlights ndash Tourism and Hospitalitybull Comprehensive development of the Vishnupad Temple at Gaya and Mahabodhi Temple at Bodh Gaya in Bihar will be undertaken to transform them into world class pilgrim and tourist destinations This will be modelled on the successful Kashi Vishwanath Temple Corridorbull The development of Rajgir which holds religious significance for Hindus Buddhists and Jains will be undertakenbull The government will support the development of Nalanda as a tourist centre besides reviving Nalanda University to its glorious staturebull The government will provide assistance for the development of Odisharsquos scenic beauty temples monuments craftsmanship wildlife sanctuaries natural landscapes and pristine beachesbull Recognising the tremendous potential for cruise tourism in India which is also an employmentgenerating industry a simpler tax regime has been proposed for foreign shipping companies operating domestic cruises in the countryKey Highlights ndash Transportation and Connectivitybull Development of road connectivity projects will be undertaken namely 1 PatnaPurnea Expressway 2 BuxarBhagalpur Expressway 3 Bodhgaya Rajgir Vaishali and Darbhanga spurs and 4 additional 2lane bridge over river Ganga at Buxar at a total cost of Rs 26000 croresbull New airports will be constructed in Biharbull For promoting industrial development funds will be provided for essential infrastructure such as water power railways and roads in Kopparthy node on the VishakhapatnamChennai Industrial Corridor and Orvakal node on HyderabadBengaluru Industrial Corridorbull Transit Oriented Development plans for 14 large cities with a population above 30 lakh will be formulated along with an implementation and financing strategybull Phase IV of PMGSY will be launched to provide allweather connectivity to 25000 rural habitations which have become eligible in view of their population increasebull To promote domestic aviation and boat and ship MRO the period for export of goods imported for repairs will be extended from six months to one year In the same vein the timelimit for reimport of goods for repairs under warranty will be extended from three to five yearsThese measures were introduced in addition to the ones already proposed during the Interim Budget in February this yearInterim Budget Highlights ndash Tourism Hospitality and Transportationbull States will be encouraged to undertake comprehensive development of iconic tourist centres including their branding and marketing at a global scalebull A framework for rating the tourist centres based on the quality of facilities and services will be establishedbull Longterm interestfree loans will be provided to states for financing such development on a matching basisbull To address the emerging fervour for domestic tourism projects for port connectivity tourism infrastructure and amenities will be taken up on the islands including Lakshadweepbull Three major economic railway corridor programmes identified under the PM Gati Shakti scheme will be implemented to improve logistics efficiency and reduce cost These are energy mineral and cement corridors port connectivity corridors and hightraffic density corridorsbull Forty thousand normal rail bogies will be converted to Vande Bharat standardsbull Expansion of existing airports and development of new airports will continue expeditiouslybull The EV manufacturing and charging infrastructure will be strengthened Greater adoption of ebuses for public transport networks will be encouraged through payment security mechanismsIndustry leaders and associations reactThe measures for tourism and hospitality introduced at the Union Budget received mixed reactions from industry stakeholders While most of them expressed hope for growth and diversification of tourism in India others expressed disappointment over the nonfulfillment of demands and lack of any major initiative for tourismFocus on spiritual tourism and infrastructure developmentThe India Travel Trends Report by MakeMyTrip released in April 2024 found that searches for spiritual tourism witnessed a 97 per cent increase in 2023 compared to 2021 This domain of tourism is further expected to grow after the measures introduced in the budgetRajesh Magow CoFounder and Group CEO of MakeMyTrip commented ldquoThe governments 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 ecommerce operators to 0137 is a welcome move Furthermore the provision of credit for TCS against income tax under Income from Salaries is logical and will provide muchdesired relief to taxpayers who travel internationallyYogesh Mudras Managing Director of Informa Markets in India Organisers of SATTE also hailed the move to promote spiritual tourism ldquoEnhancing infrastructure around significant temples pilgrimage sites and scenic beach destinations will not only elevate the overall tourist experience but also position India as a premier global destination for spiritual and cultural journeys These initiatives are expected to stimulate economic growth create jobs and attract substantial investments across various sectors Improving infrastructure is especially crucial as it will enhance connectivity accessibility and the quality of services ensuring that visitors have a seamless and enriching experiencerdquo he statedAloke Bajpai Chairman Managing Director and Group CEO of ixigo welcomed the policy initiatives The governments policy initiatives to enhance spiritual tourism are a welcome move towards growing domestic tourism and making India a global travel destination We saw a 405037 increase in demand for spiritual tourism last year for destinations like Varanasi Ayodhya and Tirupati The governmentrsquos PRASAD Scheme has led to a remarkable transformation in Varanasis tourism sector attracting an unprecedented 100 million visitors to Kashi Vishwanath Dham after the corridor project completionrdquo he revealedldquoWe expect a similar boost in tourism to Bihar and Odisha with spiritual tourism corridors coming up for Vishnupad Temple and Mahabodhi Temple at Bodh Gaya along with comprehensive initiatives for Rajgir Nalanda and Odishardquo he addedKB Kachru President of Hotel Association of India HAI and Chairman ndash South Asia of Radisson Hotel Group appreciated the focus on infrastructure development ldquoThe 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 especially Odisha temple corridors in Gaya Bodhgaya Rajgir and identification of Nalanda as a key tourism site continue to demonstrate the governmentrsquos intent to utilize the potential of tourismrdquo he saidMore to be done in the tourism sectorHowever there is much left to be done in the tourism sector Some industry leaders and travel associations have expressed their disappointment and stated issues that still remain unaddressedldquoRegrettably however there has been no policy announcement to facilitate the development of hotels and promotion of inbound tourism Although not directly linked to this budget the industry would continue pursuing its ask for grant of infrastructure status for the hospitality sector and industryrelated benefits by all state governmentsrdquo Kachru statedIndraneel Dasgupta Cofounder of My Tirth India said ldquoTravel is one of the fastest growing industries in India However there are no direct benefits or changes from government for the travel and tourism industry Overall the budget looks kind of positive for investments and growth Hoping that as we move forward the tax slabs will be further reduced and people would have more money in hand to spendrdquoIn an official statement the Travel Agents Association of India TAAI also expressed their disappointment over the tourism measures introducedldquoDespite being one of the key drivers of economic growth and employment the sector has been notably underfunded and overlooked in the latest budgetrdquo the statement readIt further stated ldquoThe FM in her speech highlighted infrastructure development for only two to three religious locations which shall be taken up for development and promotion by the government These religious circuits are raw and need a huge push Rather than upgrading the current locations and enhancing last mile connectivity to popular locations the Govt is trying to push locations where connectivity is a huge challenge and there is a lack of interest in the Domestic as well as the inbound tourism marketrdquoAlso Read To travel or not Decoding the overtourism and irresponsible tourism catastropheThey appreciated the decrease of the TDS for all ecommerce platforms from 137 to 0137 and a simpler tax regime for foreign shipping companies operation in the domestic market but expressed disappointment over demands like reduction in Aviation Turbine Fuel cost rationalisation of GST rates and abolishment of TCS on outbound travel being ignoredPradeep Shetty President of the Federation of Hotel amp Restaurant Association of India FHRAI commented ldquoThere is nothing spectacular in the budget to bring structural changes to address the fundamental challenges the hospitality sector 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 amp 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 wellaccepted multiplier effect of tourism on employment and economyrdquoHowever he appreciated the initiatives introduced ldquoThe 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 todayrdquo he saidWhile the tourism and hospitality sectors are not entirely satisfied with the outcome of the budget therersquos hope for a change in the direction of tourism in India with increased infrastructural development and spiritual tourism initiatives However there is much left to be done for the overall growth of the sectorsAlso read Union Budget 2024 Farm sector hails Rakesh Tikait calls it lsquoemptyhandedrsquo