If we go by sector-specific changes, the travel and tourism sector is also one of the crucial economic drivers, contributes around 5.8% to India’s GDP and is targeted to reach $1 trillion by 2047, if we go by government goals.
According to a report, the tourism sector is also projected to contribute $250 billion to the country’s GDP by 2030, which can generate employment for 137 million individuals.
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In such a scenario, leading experts from the travel and tourism industry are expecting certain bonuses from the upcoming Interim Budget 2024 to turn India into a destination of choice. The expectations are as follows:
Focus on domestic tourism
There are expectations for schemes encouraging domestic tourism to offset the impact of international travel restrictions. Incentives for hotels, resorts, and travel agencies that ensure to promote local destinations.
Streamlining TCS and tax reduction
Suggestions include reducing income tax levels to boost disposable income, annual LTA exemptions for domestic tourism, and standardizing TCS at five percent on foreign travel packages.
Anticipation for budgetary support to integrate advanced technologies in the travel sector. Investments in digital platforms, contactless services, and smart tourism initiatives.
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GST input credit
Experts recommend initiating GST input credit for inbound and domestic tourism, centralising issues faced by single assesses in multiple states, and simplifying compliance mechanisms.
The travel and tourism industry advocates for removing TDS on automated bookings to align with the government’s commitment to ease of doing business and digital adoption.
Expectations run high for financial aid packages tailored specifically for the tourism and travel industry. Subsidies or grants to help businesses recover from the prolonged impacts of the global pandemic.
Marketing and promotion campaigns
Hopes for budgetary allocations for global marketing campaigns to promote tourism in the country. Strategic promotion to attract international visitors and regain the sector’s momentum.
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Promotion of sustainable tourism
There are hopes for initiatives promoting sustainable and eco-friendly tourism practices and incentives for businesses that adopt sustainable measures to protect natural resources.
Given that 2024 is an election year, with Lok Sabha elections likely to take place between April-May, the Finance Minister will present an Interim Budget or a Vote on Account in February instead of a comprehensive annual budget. Therefore, the full budget will likely be presented in July after the formation of the new government.
Sitharaman’s announcement that there will be a Vote on Account suggests that significant policy announcements are unlikely in this interim budget.
The imminent interim budget before the elections is taking place at a point where analysts observe a seemingly stable overall economic landscape, supported by improved financial conditions and strong macroeconomic data.
Experts add that the ongoing budgeting process may face challenges from a slowdown in the global economy, agriculture sector, and stresses on the rural economy.