Being neglected often, Indian tourism industry feels orphaned!
Tourism and hospitality industry hardly finds sufficient support from the Government, even when it is needed the most.
Industry’s disenchantment in the wake of the neglect is not the first time: travel, tourism and hospitality sectors in India, despite having significant socio-economic contribution, get recurrent shocks of the negligence from the authorities much more often than other sectors. Akin to the global tourism sector, India’s leisure and recreation sector got shattered by the effects of the global pandemic. Yet, unlike in many other locations in the world, this sector got hurt deeply by the apathy of the authorities in offering lending hands in their efforts to recover from the worst crisis it ever faced. Budget announcement, by non-inclusion of tourism, has thrown the industry within India into a state of shock and deep dismay. Same was the case when national and state level Corona relief packages were announced.
Certainly India, rich with natural and cultural varieties, has immense potentials to become a top class tourist destination in the world. Indeed, the travel, tourism and hospitality industry has to be at the forefront of the efforts in taking the destination to the next level. During Corona crisis period, the industry requested repeatedly for intervention in helping the sector to survive. When financial pancakes were announced, tourism sector did not find any preference, except some scanty offers. Barring a few states in India, the role played by the state tourism authorities in motivating the tourism industry is also not encouraging.
The industry had a scope of a more liberal and reasonable investment and loan framework from the union budget. Tourism and hospitality sectors were looking for immediate and short term measures for critical revival. In the latest union budget, instead of earmarking a significant share for tourism’s recovery, the Centre has slashed the budgetary allocation for the Ministry of Tourism by 19% from Rs 2,500 crore in 2020-21 to Rs 2026.77 crore this year. A marginal hike in the budget allocation for tourism infrastructure development is the only positive factor seen in the budget. While the industry expected a major push, the outcome was disheartening and demotivating for the industry in general. In fact 30 to 40 million people lost their hope in travel and tourism sector for their survival. Some statistics reveal that tourism and hospitality sector has a contribution of up to 10 percent in India’s GDP.
On behalf of Federation of Hotel and Restaurant Association of India (FHRAI), its Vice President Gurbaxish Singh Kohli expressed their deep grief in the wake of the budget announcement.
“The Union Budget 2021 has disappointed the Hospitality industry…. Our pre-Budget memorandum to the Hon’ble Finance Minister included some priority reforms to stabilize the industry such as Review of the Kamath Committee recommendations, Classifying Hospitality under the RBI Infrastructure lending norm criteria, Industry status to hotels, restaurants and resorts across the country, To include Hospitality and Tourism in the concurrent list, MAT waiver for a period of three years, IGST billing to hotels for corporate and MICE bookings…. With zero foreign exchange earnings and less than 25 per cent of pre-pandemic revenues, the sector is facing an existential crisis. The industry is the fall guy for the Govt. We stand by and come through for the Govt. in its every need, as we did during this pandemic, but we are surprised that the sector could not find even a mention in the FM’s budget. We wish our Govt. would study what other countries have done to ensure tourism, the worst-hit sector, is kept alive. The Hospitality and Tourism industry was looking forward to some relief measures to lift this most severely affected industry by COVID19. Instead, it has yet again completely and fully chosen to ignore us,” says Mr. Kohli .
When the Government of India announced ₹20 lakh crore package aimed at supporting the economy and allied industries that are badly hit by the pandemic, tourism sector wasn’t properly addressed in it. The then president of Indian Association of Tour Operators (IATO), Pronab Sarkar, pointed out the neglect and says:
“”We have been completely disappointed by government’s lack of empathy for the suffering of tourism sector. This sector directly and indirectly employs about 4 crores people yet not a single word of solace for the sector in the entire five press conferences held by FM,”
Policy ambiguities and leadership lacuna occur often in tourism. Amidst a range of reasons, one of the major is the frequent changes in the leadership. Minister for tourism, on an average, changes in less than two years of time. In the last two decades of time, twelve ministers were there for tourism. From Uma Bharathi in 2000, then the minsters kept on changing, which includes Ananth Kumar, Jagmohan, Renuka Chaudhary, Ambika Soni, Selja Kumari, Subodh Kant Sahay, Chiranjeevi, Shripad Naik, Mahesh Sharma, Alphons Kannanthanam and Prahlad Singh Patel. Though a permanent department is there to look after the affairs, there has to be significant contribution from the respective minister as well.
The industrialists in tourism and hospitality sector in India often make the remark that getting ‘Industry’ status for this industry across India by putting it in the Concurrent List would be monumental for the hospitality and tourism sectors in the country, and enabling a single-window clearance for investment and related approvals would be most appropriate. GST reduction was also recommended for the tourists, particularly the domestic tourists to be motivated to engage in travel.
An income tax exemption on travelling within India by the Indians is another demand from the tourism sector in India and that can ensure the quality up gradation in domestic tourism in the country.
When inoculation began, this industry was again side-lined. Though they are in the forefront of delivering personalized service to the visiting population, there is no priority for them to get the vaccine.
There are many other common concerns of the sector with regard to the development and promotion of tourism. Infrastructure problem is a serious issue that the industry is facing, as India is yet to have sufficient infrastructure; including roads, water, sewer, hotels and telecommunications. Availability of quality skilled human resource is another major bottleneck faced by the sector. Moreover, service, luxury and transportation tax rates are high. India also records high crime rates and attacks on Women and foreigners at some parts of the country. Moreover, some regions are notorious for terrorist and other insurgent group activities.
Certainly, India, as often remarked, is a ‘sleeping tiger’ in tourism. The woes of the industry have to be considered by the authorities and enhanced cooperation between the public and private sectors is the need of the hour. There are ‘miles to go’ for India for achieving a commendable position in the global tourism.