Union Budget 2023-24: Stakeholders in hospitality industry have high hopes

All eyes in the recovering hospitality industry are trained at the upcoming Union Budget

Hospitality industry expectations from Budget 2023-24: The announcement of the Union Budget 2023 by Finance Minister Nirmala Sitharaman is around the corner, and a recovering hospitality industry has high hopes. The hospitality sector was among the worst hit areas during the COVID-19 pandemic, and it was only in 2022 that things started to look up. While business across hotel categories is steadily increasing, major brands are still reeling from their losses.

Now, as the Budget session inches closer, stakeholders in the industry have shared their views and expectations.

The Indian hotel industry is said to have taken a hit of over Rs 1.3 trillion in revenue in FY 2020-21. It was a massive financial/revenue loss. Keeping this in mind, the government should allow the industry to set off and carry the losses for up to 12 years under Section 72 of the Income Tax Act. Currently, the authorities allow this for eight years. The industry could adjust the loss against the taxable income with an extra four years. Moreover, the Emergency Credit Line Guarantee Scheme (ECLGS) was introduced last year as part of the government's relief package. The industry body appreciated the cabinet's decision to approve an additional Rs 50,000 crore for this in 2022 up to March 2023. But we expect the government to extend the ECLGS loan term for the sector for the maximum period as the present 6-year timeline of the loan repayment is not enough for the industry that is slowly recovering.

- Aditya Sanghi, Co-founder & CEO, Hotelogix

The year 2022 saw a decent resurgence in the hospitality sector and I’m hoping to cross the pre-pandemic numbers this year. We look forward to the FM Sitharaman’s Union Budget this year, and are expecting the government to extend their support and ease the situation by making provisions to rebalance and escalate the top-line growth momentum. We seek an input tax credit on GST, subsidised loans and industry status for the businesses to survive with ease and gradually exceed the pre-COVID levels. I believe this will adequately help drive the sector greatly.

Chaitanya Durve, Executive Director, British Brewing Company

I hope that Budget 2023 scales a path towards India’s growth story, especially in the infrastructure and technology sectors. The expectation from the upcoming Union Budget is the provision of the right policy and budgetary framework to ensure economic growth of the country and a budget design that can stand as per the GDP growth rate expectations. Considering that the Indian economy has begun to recover from the fiscal repercussions of the COVID-19 pandemic outbreak, the manufacturing sector is expected to experience solid growth, which can further strengthen by providing fiscal incentives and specific schemes in the upcoming union budget 2023-24. I strongly believe that Indian government will prioritise the policies that can benefit infrastructure, manufacturing sector and promote renewable energy allowing the country to realise its potential on a global scale. Manufacturing investments must be encouraged among technology providers to bring self-reliant solutions in the country. Development of new-age manufacturing skills across the top and bottom of the pyramid must be enlightened which can be a game changer for further skill development.

- Rajeev Sharma, Chief Strategy Officer, Mitsubishi Electric India Pvt. Ltd.

2022 was a year of recovery for the F&B sector, almost reaching pre-COVID levels. However, the sudden round of uncertainty and apprehension can dampen the sector's spirit. Collective action from the policy front must be in place to prevent any downturn. In this context, key measures outlined in the upcoming Union Budget 2023 concerning consumption and sops to essential sectors will be decisive. The input costs have gone up substantially as sector gets hassled by inflation and despite it being a prime contributor to the economy. While Atmanirbhar Bharat and Vocal for Local have been great proponents, much needs to be done to incentivise local brands of food and beverage businesses. Provisions such as full availability of the input tax of 5% and faster availability of the same will further boost the sector's growth. In addition, making a provision for availing tax refund on tax paid on vending machines (18) used to dispense beverages incorporates (B2B) where the output tax is only 5%, leading to funds blockage for the MSME sector companies who usually do this business. Despite the possibility of a global economic recession, demand from Indian consumers remains robust so far. MSME sectors are contributing in a big way and hence. We hope that the Union Budget 2023 looks into encouraging this sector on one hand and also increase or keep intact the purchasing power of the citizens to whom this sector serves, so that the sector continues to grow while braving possible headwinds.

- Chaitanya Bhamidipaty, Co-Founder, Roastea


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