The Union Budget announced yesterday does not indicate any broad-spectrum changes or triggers that would catalyze an economic recovery. As articulated by the FM, the primary objective is to promote growth. It is a little disheartening then to note that one of the most profitable industries in the country - Travel & Tourism - has been neglected, yet again.
Not only are there no incentives or sops, but extension of tax-net on services such as AC restaurants will adversely impact the revenues for the sector as a whole. Repeated taxation of the same sector that contributes more than 6 per cent to the GDP and more than 9 per cent to the employment is quite unfair.
This treatment could ostensibly be because travel is considered a ‘discretionary’ activity. It may appear to not have the gravitas associated with promoting rural growth and development, or supporting artisans and textiles. But the Travel & Tourism industry provides sustenance to this very ecosystem! Better infrastructure and services into places of tourist attraction would mean assured livelihood and should result in a better quality of life for local residents - through public infrastructure, better law & order and healthcare facilities.
One hopes that the powers-that-be can take a more pragmatic view of this in future years. Additionally, incentives for the airline and hotel industry would have also helped increase our revenues from inbound and domestic tourists. Our jet fuel rates together with the airport fee structures make this one of the toughest markets globally to operate in. Little surprise then that the Indian airline Industry was the only one in the world that declined in 2012, shrinking by 9 per cent. For a developing nation with a growing economy it doesn’t augur very well! The Rail budget demonstrated a rather progressive outlook by announcing the intention to upgrade infrastructure and consider a differentiated pricing model.
The Internet sector on the other hand is a young industry that requires support and incentives to flourish at this stage. The eCommerce industry would have welcomed some relief in the area of FDI. There are incentives for Incubators, but only for education ventures, and this too needs to be broad-based to truly support the sector. One signs off with the hope that the measures announced in yesterday’s Union Budget will help promote growth and bring in some cheer by reigning in inflation.
The writer is Founder & ceo makemytrip.com
Anand Gupta Hon treasurer, Builder Association of India
“The budget has nothing great for the housing sector. We were expecting Real Estate to be given infrastructure status, but that didn’t happen. Nothing on rental housing, nor ANY major announcement for real estate. Except for the one lakh exemption for the Rs 25 lakh housing loan, the budget is not up to our expectations.
Anuj Puri Chairman and Country head Jones Lang LaSalle
“This was a moderately encouraging budget in general, but tepid for the Indian real estate sector. There has been no proposal on certain key expectations from the real estate sector. These include implementation of the Real Estate regulator and the Land Acquisition Act. All said and done, Indian real estate will continue to struggle with its larger hurdles.”
Sachin Sandhir Managing Director, RICS-South Asia
“We are happy to note that the FM has announced a Rs 2000 crore urban housing fund, in line with our recommendation. FM has also not disappointed home buyers by increasing the home loan exemption limit and providing Rs 1 lakh interest benefit for loans up to Rs. 25 lakh, which will make homes more affordable.”