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May 27, 2024

“Union Budget 2023 – Post-Budget Note for the Travel & Tourism Sector

Varun Arora, CEO and Co-Founder, Ekostay

Varun Arora, CEO and Co-Founder, Ekostay

The Union Budget 2023 led by Finance Minister Nirmala Sitharaman came with several great propositions and opportunities for the travel and tourism sector this year.  the government identified their lack of concrete monetary support to the sector in the previous budget and took steps to rectify that. The FM addressed the immense importance of the travel and tourism industry in India’s GDP and the ample job opportunities and economic growth potential it holds. To boost the inflow of tourism from domestic and international tourists, some of the steps taken by the government are impressive. For instance, the selection of 50 tourist destinations in the country to be developed as a whole package and the revamp of 50 airports, helicopters, and aerodromes for improving regional air connectivity and boosting the influx of domestic and international tourists will improve the tourism infrastructure tremendously. The railway sector is also receiving a capital outlay of ₹ 2.40 lakh crores, which will improve travel accessibility for the low-income sectors and, in turn, boost tourism. To ease the stay of international and domestic tourists, the government will also look into improving the standards of food safety, tourist security, and physical and virtual connectivity, which we find commendable. As a positive side-effect, we will also see more job opportunities for the public, especially the youth. On the capital outlay front, we think that the infusion of the Credit Guarantee Scheme with ₹ 9000 crores and the provision of ₹ 2 lakh crores collateral to MSMEs in a bid to boost fund flow to the MSME sector will encourage startups and small businesses in the travel and tourism industry to expand their operations and witness an increase in revenue. It will give confidence to MSMEs and startup owners to approach banks for loans and ease the burden on banks to lend funds to MSMEs without collateral. However, unfortunately there was no relaxation on the GST front which was much anticipated from the government. But overall unlike the last budget, these are some concrete developments that will aid in promoting and boosting the tourism industry by a decently fair margin.”

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