The interim budget 2024-25 recently presented by Indian finance minister Nirmala Sitharaman has drawn mixed reactions from the country’s tourism industry. While the focus on infrastructure development received appreciation, key demands of the past like industry status and rationalisation of taxes were once again overlooked.

As per the interim budget, states will be encouraged to take up comprehensive development of ‘iconic’ tourist centres, and to brand and market them on a global scale. A framework for rating based on quality of facilities and services will be established too.

The Indian finance minister also announced that 400,000 normal rail bogies will be converted to the high-speed Vande Bharat standards to enhance safety, convenience and comfort of passengers.

Mahesh Iyer, managing director & CEO, Thomas Cook (India), said: “An important highlight of the interim budget is the government’s plan to provide long-term interest-free loans to states for the development of iconic tourism centres and promotion on a global standard – these will be a key driver for expanding tourism circuits across the country.”

In order to boost domestic tourism, the Indian government plans to introduce projects for port connectivity, tourism infrastructure, and amenities on islands like Lakshadweep.

“The projects to enhance connectivity in the country through the development of airports, railways metro lines, ports in our unexplored islands and tourism infrastructure, will enhance demand and generate employment. We are also optimistic about additional futuristic support from the government in granting infrastructure status to hospitality and tourism, which will help us achieve a long-awaited status,” said KB Kachru, chairman emeritus & principal advisor, Radisson Hotel Group, South Asia. For the unversed, having an industry status facilitates easier access to loans with interest subsidies besides helping to reduce costs of hospitality projects.

On the other hand, the Travel Agents Association of India (TAAI) expressed disappointment over the lack of relief for travel agents in terms of not withdrawing the increase in Tax Collection at Source (TCS) rates on overseas tour packages.

“Even though announcements have been made regarding infrastructure development for the tourism industry, we expected the government to look into our concerns for the last two years, like the increase in TCS rates on overseas tour packages, which impacts travel agents operating in India, making them non-competitive,” said Jyoti Mayal, president, TAAI.

The Indian government introduced the new TCS rates from October 1 last year, increasing it from five to 20 per cent. Since then, TAAI has requested the government to withdraw the steep hike through various pleas.