India’s travel and tourism industry, among the worst casualties of the Covid-19 pandemic now in its third year, expects the government to announce a raft of incentives and relief measures and increase the budgetary allocation for the tourism ministry in Budget 2022.
The industry has asked the government to consider a waiver of e-visa fees for all foreign tourists in the financial year 2022-23 to support a revival of travel and tourism. It also wants tourism earnings to be treated on par with exports.
The Travel Agents Association of India has urged the government to adopt a ‘One India, One Tourism’ approach to the industry in the Budget including a one-tax structure.The industry body said this would require both the central and state governments to work in tandem and agree to move tourism to the concurrent list of the Constitution from being a largely state subject.
It added that such a move will help the sector receive the status of an industry and become more structured.
The industry body also asked the government to at least double the outlay of the tourism ministry. In 2021-22, the budgetary allocation for the ministry was cut to Rs 2,026.77 crore from Rs 2,500 crore.
Online travel platforms like MakeMyTrip and Ixigo have suggested that the government extend leave travel allowance (LTA) exemption limit for taxpayers to boost domestic tourism.
Leave Travel Allowance (LTA) is provided to employees to cover expenses when travelling on leave from work.
Most employees were not able to make use of the allowance in the past two years because of travel restrictions imposed by governments during the pandemic.
As a result, they were unable to claim tax exemption on LTA in the past two years.
“We request the government to consider extending the LTA exemption limit and bring it under the yearly allowances list for taxpayers. Currently, one can apply for leave travel exemption once in two years or twice in a block of four years,'' said Rajesh Magow, co-founder of MakeMyTrip.
It would be better if employees could claim the exemption every year instead of every alternate year, he added.
Aloke Bajpai, group CEO and co-founder of Ixigo, said the government should look at sustainable long-term plans to help revive international travel that continues to be disrupted by restrictions imposed following the outbreak of COVID-19.
"The introductions of innovative initiatives like the sandbox schemes currently being followed by countries like Thailand and Indonesia will help India build a more resilient tourism economy going forward," he said.
The sandbox schemes offer specific destinations to fully vaccinated tourists where they can travel freely.
Bajpai expects the upcoming budget to also unveil incentives for domestic tourism.
Prakash Sangam, CEO of redBus, said the government should consider continuing credit guarantee scheme for micro, small and medium enterprises and credit support for travel, transportation and tourism to help these businesses sustain themselves.
“Another important aspect to note is the impact of inflation on the industry, which stems from rising fuel prices. Fuel usually accounts for 50% of the operating costs for transport companies. A further cut in excise duty on fuel will go a long way in positively impacting the sector,” Sangam added.
Additionally, industry participants and experts have requested the government to consider tax breaks and waivers for the aviation industry in India, which would play a key role in revival of travel and tourism.
The Indian Association of Tour Operators wants the government to withdraw tax collected at source (TCS) from foreign tourists to encourage international tourist arrivals.
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