Tourism industry should be given industry, export and infrastructure status

Travel and Tourism is a key contributor to the Indian economy and hence warrants strong focus via budgetary allocation, given its ability to catalyse the growth engine for both revenue and job creation.

Feb 01, 2017 03:02 IST India Infoline News Service

Thomas Cook
The tourism industry is one of the largest and most dynamic sectors globally, accounting for more than a third of the total services trade. The UNWTO expects that the sector will provide 296 million jobs globally by 2019. Travel and Tourism is a key contributor to the Indian economy and hence warrants strong focus via budgetary allocation, given its ability to catalyse the growth engine for both revenue and job creation. It is of value then that the Tourism industry be given industry, export and infrastructure status.

Incredible India will seem but an unfulfilled promise if not backed by strong and sustained initiatives to bridge gaps in infrastructure (air-road-rail connectivity; also sea/river potential; accommodation), taxation, sanitation, security of tourists and finally marcom.

The potential is immense and not restricted to inbound tourism, but clearly the yet under-leveraged domestic tourism sector (leisure, business, b-leisure and MICE).

While the Government’s initiatives to strengthen domestic connectivity as well as international accessibility have borne positive results, there is a significant gap in terms of infrastructure development, accommodation, recreational outlets, rationalisation and uniformity of taxation and concerns on tourist security and sanitation that still need to be addressed, and on priority.

Prime Minister Narendra Modi had created a strong beginning and we are confident that we will see impactful tourism inclusions via the Finance Minister’s Budget 2017-18, and what is vital is that this is coupled with sustained execution on-ground.

The Indian aviation industry is on a high growth trajectory and is poised to become the third largest travel market by 2026. Yet there are several challenges related to complex policies, multi-tiered tax systems and poor infrastructure that serve as a deterrent.

If the Indian aviation sector is allowed to realize its potential in catalysing tourism both inbound and domestic, our expectation includes focus on reduction, uniformity and standardization of taxes on air fares via a single component that ushers in uniformity and transparency; equally lowering ATF pricing- a key component of an airline’s cost structure, to reduce overall costs, increasing affordability and giving impetus to air travel.

A high growth tourism industry not only complements growth in allied sectors like hospitality and aviation but it also directly contributes to the economic growth and drives direct and indirect employment. We look forward to The Union Budget’s focus on streamlining regulations to reduce the tax burden and improve the ‘ease of doing business’. An important consideration for the Government is the introduction of a single-window clearance system covering both Central and state laws, with pre-defined timelines for speedy clearances.

The author, Mahesh Iyer is COO, Thomas Cook (India) Ltd.

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