Finance Minister Arun Jaitely presented the Union Budget 2017 in the Lok Sabha yesterday. He made quite a few proposals that would directly affect the Travel and Tourism industry. Expectations were quite high from the Union Budget 2017 as India has emerged as a popular tourist attraction and contributed significantly in India’s GDP. So, it was expected that attention be paid to infrastructure and measures be taken to go lenient on taxes. ALSO SEE Union Budget 2017: Expectations of Travel and Tourism industry from Budget 2017
After Finance Minister Arun Jaitley concluded his Union Budget 2017 address which included a 2-page mention of the Railways, reactions were mixed. According to Mr. Dhaval Jani, Vice-president, Sales & Marketing of V Resorts:
“We were expecting much more for the travel and tourism industry, and we are a bit disappointed that the Government did not announce any package, incentive for the sector. The good news is the emphasis on improving the infrastructure – that of 3500 railway lines across India, setting up of airports in Tier 2 cities and dedicated trains for religious tourism – will ultimately work in encouraging people to travel more. But it all depends on the implementation and the time for the projects to materialize. The announcement of ‘no service charge’ on IRCTC bookings, done clearly to encourage digitization is a move that will benefit a company like us. This move will create a healthy approach of travelers towards travel planning online, spells good news as 80 per cent of our transactions happen online.”
Another expert, Vikram Ahuja, who is the founder of Byond Travel – a Bangalore-based travel start up that that tailors custom holidays for special interest groups, said that the Budget will have an impact on the Travel industry and on start-ups as follows:
For the Travel industry:
“For the travel industry, disappointing that the recently announced increased tax slab has not been revised. We are still dealing with India as an expensive destination purely based on our taxation policies. On the plus side, the increased focus on infrastructure development is very welcome and will benefit the travel industry tremendously. Focus on digital payments and encouraging online payments (Via BHIM and other initiatives) is a huge plus for a tech-first company like ours. Also the cap on cash deposits hopefully creates more transparency in the way travel services and packages are offered since the scope for inbuilt “cash-led” services will hopefully reduce.”
“The reduction of corporate tax from 30% to 25% is a huge benefit for younger startups and is in line with the “Startup India” initiative announced earlier to make starting and running a company easier. The increased period for profit linked deduction for three years out of 7 years as against five years is very useful, as start-ups are not expected to make profits for the first few years.” DO SEE Railway Budget 2017 News: Highlights of Railway Budget from FM Arun Jaitley’s Speech in Lok Sabha
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