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India reveals bold US$166m budget for tourism
Rohit Kaul and Shekhar Niyogi, New Delhi and Kolkata, July 11, 2014

THE new Union Budget for 2014/2015 unveiled yesterday proposing a Rs10 billion (US$166 million) investment to develop India as a more attractive tourism destination has generally received a positive response from the trade.


The budget covers improving air access, airport construction in second- and third-tier cities, introducing e-visas at nine airports by end-2014 (TTG Asia e-Daily, July 2, 2014), developing heritage sites and creating five themed tourist circuits, though no time frame was announced for most of the projects.


This includes earmarking Rs1 billion for the preservation of archeological sites, Rs2 billion for heritage cities development, while an international-standard convention centre will be built in Goa.


Service taxes will also be waived for Indian tour operators dealing with tours conducted outside of the country.


Other measures welcomed by the trade include allowing cenvat credit for rent-a-cab and tour operator services from October, the proposed nation-wide upgrading of railway lines (TTG Asia e-Daily, July 9, 2014) and the introduction of reits as vehicles for fundraising.


Cheering the new budget, Subhash Goyal, president, Indian Association of Tour Operators, said: “This is the best-ever budget for the tourism industry in the history of India. International tourist arrivals to India will grow by 30-40 per cent yearly once the e-visa is introduced.”


Madhavan Menon, managing director of Thomas Cook India, was particularly enthused by the development of the Sarnath-Gaya-Varanasi Buddhist circuit with world-class amenities, which he called a “manifestation” of the government’s pro-tourism focus.


However, a section of the industry feels the government could have gone further in supporting the industry.


“Major issues related to high energy costs and infrastructure development remains unaddressed,” said Manju Sharma, director, Jaypee Hotels.


And in the area of adventure travel, Akshay Kumar, president of the Adventure Tour Operators Association of India, said: “One of our long-standing demands – the waiver of excise and customs duty on the import of adventure travel equipment – was not met.”


“Reforms are needed mainly on issues related to airlines. Building new airports will not help unless we make the airline business viable and sustainable,’ added Vishal Bhadola, associate manager, CAPA India.

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