February 2,2023:At least 50 destinations will be selected and developed as a complete package of tourism, announced the Union Minister for Finance Nirmala Sitharaman while presenting the Union budget 2023-2024 in Parliament yesterday . She added that the focus of development of tourism would be on domestic as well as foreign tourists.
The Finance Minister proposed to launch an App in which all the relevant aspects of the tourist destination would be made available, in addition to aspects such as physical connectivity, virtual connectivity, tourist guides, high standards for food streets and tourists’ security, to enhance tourist experience.
To strengthen the domestic tourism, Sector specific skilling and entrepreneurship development will be dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative, the Budget 2023-24 proposed. To encourage tourism in the border villages, tourism infrastructure and amenities will be facilitated under the Vibrant Villages Programme, announced the Finance Minister.
Unity Mall, to promote and sell State’s own One District, One Product (ODOPs), Geographical Indication (GI) and other handicraft products, will be set up in states. States would be encouraged to set up such Unity Mall in the capital city or most prominent tourism centre or the financial capital and also provide space for ODOPs & GI products of other States as well.
Here are some reactions to the Indian 2023 Union budget from travel and tourism players
Aloke Bajpai, Group CEO & Co-founder, ixigo: The travel industry has bounced back phenomenally well in 2022 and while we have seen a strong recovery in domestic travel our next goal should be focussing on encouraging a faster revival of foreign tourist inflow and international travel. FTAs has seen encouraging growth month-on-month in the last few months however it is yet to realize its full potential. We are happy the government has recognized this and welcome the targeted incentives announced in this budget of developing 50 tourist destinations in India as a package for attracting domestic and international travelers. Setting up 'unity malls' in state capitals and popular tourist destinations will mark tourist spots, monuments, and spaces for visitors which will further boost the sector. The development of 50 new airports will improve regional air connectivity and benefit travelers from Tier 2 & 3 cities which have seen significant growth in demand for air travel and first-time flyers post-relaxation of travel restrictions. While these initiatives will benefit domestic travel in the long run, leisure vacations abroad can get costly for Indian travelers with TCS for overseas tour packages increasing from 5% to 20%. Higher costs to Indian travelers because of an increase in tax can impact the international travel demand which was slowly gaining momentum.
Dinesh Kumar Kotha, Co-founder & CEO, Confirmtkt: It's impressive to note that the budget’s focus has been on the promotion of tourism, considering it’s one of the biggest drivers of economic growth in India. FM Sitharaman’s statement that the sector holds huge potential has been backed by an increase in 9X capital outlay, which is the highest-ever allocation to railways. Progressive initiatives announced by the government on the upgradation of railway stations and full electrification of broad gauge routes by end of 2023 are welcome steps. The current budget's focus on the active development of railway infrastructure, faster roll-out of Vande Bharat train sets, better connectivity and new rail lines will fuel train travel demand in India.
George Zachariah, CEO at ExTravelMoney.com:The rate of TCS for international remittance under LRS for education purposes continues to remain the same at 5% on transfers above Rs 7 Lakh and 0.5% if the source of funds is through a loan from a financial institution. It would have been good if the ceiling for TCS collection could have been raised to Rs 10 Lakhs. That would have benefitted students going to study abroad as most transfers under the education category fall between Rs 7 Lakh to Rs 10 Lakh. Currently, they can take credit or claim a refund when filing ITR but it's an upfront overhead that strains their cash flow at the time of going abroad. Also, TCS for payment of overseas tour packages has seen a sharp increase from 5% to 20% for amounts above Rs 50 Lakhs. This move will impact the luxury travel industry, especially after its slow recovery since the onset of the COVID-19 pandemic.