Union finance minister Nirmala Sitharaman has increased the budget estimate for the tourism industry by over 2 per cent from the last budget
India will undertake infrastructure and port connectivity projects in its islands, including Lakshadweep, to address the emerging fervour for domestic tourism, Union finance minister Nirmala Sitharaman announced in her Interim Budget speech in Parliament on Thursday.
Increasing the budget estimate for the tourism industry by over 2 per cent from the last budget, the minister said the states will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them at a global scale, and the central government will provide long-term interest-free loans to the states for financing this development.
The budget estimate for the financial year (FY) 2024-25 stands at ₹2,449.62 crores. It was ₹2,400 crores in FY 2023-24. However, the revised estimate for 2023-24 stood at ₹1692.10 crores.
Sitaraman said, “To address the emerging fervour for domestic tourism, projects for port connectivity, tourism infrastructure, and amenities will be taken up on our islands, including Lakshadweep. This will help in generating employment also.”
Lakshadweep has experienced a surge in tourist bookings after Prime Minister Narendra Modi’s visit to the island earlier this month and a subsequent row between India and Maldives.
The finance minister further said, “States will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them at a global scale.” Additionally, the government will provide long-term interest-free loans to the states for financing this development on a “matching basis”, she said.
The minister further proposed the creation of a framework for “rating of the centres based on quality of facilities and services”
Sitaraman said,” The success of organising G20 meetings in sixty places presented diversity of India to global audience. Our economic strength has made the country an attractive destination for business and conference tourism. Our middle class also now aspires to travel and explore. Tourism, including spiritual tourism, has tremendous opportunities for local entrepreneurship.”
Consulting CEO of the Federation of Associations of Indian Tourism & Hospitality (FAITH), Aashish Gupta, said, “It is hoped that the actual budget in July will take forward the statement of intent announced in the interim budget—such as international promotion, developing iconic destinations in partnership with states through an incentive-based system, further focus on domestic tourism and recognition of MICE (meetings, incentives, conferences and exhibitions) tourism capabilities of India further to the G20 Summit in India, and also continuing focus on new airports and Vande Bharat trains and high traffic highways.”
He further said, “Announcements such as infrastructure status for the hospitality industry, focus on enhancing foreign tourist arrivals through enhanced overseas marketing budgets and free tourist visas and reduction of GST to 12% for hotels and restaurants and 1.8 % to tour operators with full setoffs will reflect a long-term intent to promote a tourism, travel and hospitality-driven economy.”
