Soon after FM Nirmala Sitharaman's announcements, stocks of tourism-related players started rallying

Union Budget 2023-24: In the Budget 2023 announcement made by Union Finance Minister Nirmala Sitharaman, she said that the promotion of tourism was going to be taken up in mission mode, including with the help of PPPs. She also underlined the potential of the sector in creating jobs and opportunities for the youth. She added that in a bid to boost the sector, 50 tourist destinations would be chosen through a challenge to be developed into a whole package for domestic and international tourism. Apart from this, states will also be encouraged to establish a unity mall in the respective capital cities or in the most popular tourist destination to promote and sell 'One District, One Product', GI products and other handicraft, etc. 

Initiatives will also be taken to set up tourism in villages adjacent to the border. Soon after her announcements, stocks of tourism-related players started rallying, displaying initial positive reaction from the investors. 

Players from the industry have also shared their views about the Budget. 

The Union Budget 2023-24 presented by the Finance Minister highlighted that the Indian economy is on a growth trajectory in spite of the global economic challenges. In her Budget speech, the FM emphasised that the country offers “immense attraction” for both domestic and international tourists. With the government announcing that states will be encouraged to set up a "Unity Mall" in the capital city or most popular tourist destination for the promotion of 'One District, one product' theme, such initiatives will help to unleash the potential vested in the tourism sector. I also expect that the change in tax regime announced in the Union Budget will result in more disposable income in the hands of middle-class consumers – which I expect ultimately will spur consumption in activities like travel. Regional connectivity will see a boost with the plans to renew 50 additional airports, helipads, water aero drones and advanced landing grounds.

- Paritosh Ladhani, Joint Managing Director, Sincere Developers, which owns Taj Hotel & Convention Centre Agra

The fact that tourism got attention in the Union Budget is a big welcome. The FM recognised the country’s potential for domestic as well as foreign tourists and the huge opportunities the sector holds for jobs and entrepreneurship. She stressed on promoting tourism on mission mode, with the active participation of states, the convergence of Government programmes and public-private partnerships. This is especially good news for regional tourism and hospitality. Developing new airports, heliports, water aerodromes and advanced landing grounds to improve regional connectivity will unlock the vast potential for growth in the Western region of India. An integrated and innovative approach through challenge mode will be a game changer for the destinations in the Western region selected through this route. The Unity Mall initiative too is a great step in the right direction that encourages States to promote regional tourism and sale of their own ODOPs (one district, one product), GI products and other handicraft products. The Credit guarantee scheme for MSMEs with an infusion of Rs. 9,000 Cr into the corpus is expected to help small and medium-scale hotels and restaurants.

- Pradeep Shetty, President, Hotel and Restaurant Association of Western India (HRAWI)

The proposal in the Union Budget 2023, to increase the rate of TCS from 5 to 20 per cent for purchase of overseas tours and overseas remittances other than education will significantly increase the upfront cash outflow for end customers. It will drive more of these customers to use alternate channels that are outside the domestic tax net. We urge the Government to reconsider this. On the positive side: 

• Income tax rebates announced in the budget will result in an increase of disposable incomes which is welcome. 
• Tourism promotion being taken up on a "mission mode"- with active participation of states, public-private partnerships and convergence of government programmes will drive domestic tourism growth. 
• Strong infrastructural focus in the announcement of 50 new airports, heliports, water aerodromes and revival of advanced landing grounds will enhance regional access and connectivity. 
• Financial support via loans to be provided to states for developing enhanced road and rail connectivity will help uplift of the domestic tourism sector. 
• The selection of 50 destinations to be developed as holistic tourism packages – combined with the focus on local level tourism and the promotion and sale of GI products and handicrafts will give a boost to local arts and artisans.

- Madhavan Menon, Chairman & Managing Director, Thomas Cook (India) Limited

With the increasing growth of the country, India being the 10th biggest economy to now the fifth biggest economy in nine years the increasing spending power of the country in an exciting time for the F&B industry with more disposable  income and a rush of brands entering India.

- Neville Vazifdar, Founder of Jia, Royal China & Kuai Kitchen

The Union Budget 2023 showcases the Indian government's dedication to fuelling the growth of the Travel and Tourism sector. Allocation of funds for the development of tourist infrastructure, such as new airports, railways, and highways, will make travel easier and more accessible. The addition of 50 airports, helipads, water aero drones, and advanced landing grounds will improve regional air connectivity, increase footfall for both domestic and international travellers and reduce overcrowding at airports, thereby making air travel their preferred choice. The budget also prioritises sustainability, aiming for a green economy and net-zero carbon emission by 2070. Adopting eco-friendly solutions such as sustainable technologies in sleeping pods and energy-efficient lounges etc, will support this vision and enhance the overall travel experience. These advances will stimulate the local economy, and create more job opportunities, whereas tax incentives and skill development programmes will further encourage investment and growth in the sector, making travel and tourism a driving force in India's economic growth story in the coming years.

- Liberatha Peter Kallat, Chairperson and Managing Director, DreamFolks 

A special mention on Tourism by the FM has been a most welcome gesture. An acknowledgment that Tourism is indeed critical to our economic growth, is encouraging and bodes well for the industry. We welcome the measures announced to further promote tourism and to identify 50 projects for last mile connectivity improvement. The addition of 50 airports, heliports and waterdromes should also benefit the sector. Overall, a satisfactory start but more such initiatives are expected in the days ahead.

- Vineet Verma, Director, Brigade Hospitality

The Union Budget 2023 has taken a very nuanced growth-centric approach, unlike the previous few budgets. While addressing global challenges and inflation, it has tried to pave the way for an 'Atmanirbhar Bharat' by focusing on macroeconomic stability. The budget rightly realises the growing importance of digital infrastructure and AI as catalysts of the next wave of economic development. By focussing on segments such as entrepreneurship development, urban planning, and tourism, the Government has made its intent clear on looking at an alternative way to untapped potential. The budget highlighted the importance of entrepreneurship culture, allocating Rs 10 lakh crore for capital expenditure – an increase of 33% from the previous year, representing 3.3% of GDP. To further incentivise the establishment of co-operatives, a 15% corporate tax benefit has been extended to new manufacturing co-operatives until 31st March 2024. Additionally, startups have been provided with an extension of one year on the date of incorporation for income tax benefits and the benefit of carrying forward losses on change of shareholding has been extended from 7 years of incorporation to 10 years. Lastly, the changes made in the personal taxation regime are a much-needed step as this will encourage domestic consumption and continuation of economic activities, which will boost local businesses. The finance minister highlighted the impressive growth of the Indian economy, which has increased in size from tenth to fifth largest in the world over the last nine years. They also addressed all sectors in the budget proposals ensuring all-around growth.

- Anurag Bhamidipaty, Co-Founder, Roastea

We congratulate the Finance Minister on a job well done in delivering the pro-development and growth Budget for 2023-24. The projection of 7% economic growth for next financial year is a welcome sign for the future of the Indian economy. We are pleased that the travel industry has taken centre stage and the National Tourism Policy will enable the tourism sector to significantly contribute towards the government's mission to target an overall GDP contribution of USD 20 trillion by 2047. The government has recommended industry-friendly actions to help and promote the Indian travel and tourism industry. The flagship scheme, Dekho Apna Desh, focuses on domestic tourism/travel. The scheme is intended to offer financial help to tourists traveling to different parts of India and for which the government has set aside a substantial budget for the implementation of this scheme. The new outlay in the infrastructure sector will tremendously contribute to the development of the country. Announcing the 100 new projects for last mile connectivity will help IntrCity to focus on penetrating deep into Indian states. Government’s focus on increasing capital expenditure outlay by 33 per cent to Rs 10 lakh crore in 2023-24, will give an impetus to higher spending on highways and infrastructure among others, thereby accelerating the growth of the mobility sector. We also welcome “Green Growth” through the National Green Hydrogen Mission, which has an allocation of Rs 19,700 crore and this will help the country meet clean energy targets and reduce the carbon intensity of the Indian economy. Last but not the least, by building stronger, more sustainable and resilient tourism industries, will accelerate Indian economic growth, as the country is heading to a bright future.

- Manish Rathi, CEO & Co-founder, IntrCity SmartBus

With the very extensive Budget 2023, we are positive as restaurants and cloud kitchens will be included under ECLGS (Emergency Credit Line Guarantee Scheme) with an expanded line from Rs 50,000 crores to Rs 5 lakh crore cumulatively, with the additional amount being earmarked exclusively for the hospitality and related enterprises. This will help businesses to establish further. As inflation had led to a rise in the cost of products and raw materials, the government allowing input tax credit could prove to be a boon for the F&B sector. We expect liquidity support from the Budget through the reintroduction of the input tax credit on GST since it's the only industry that needs it the most and is still devoid of the same. Enhanced presumptive tax limits of Rs 3 crore for micro-enterprises with cash receipts not more than 5% will also reflect positively on hospitality, and restaurant businesses as the supply chain are based on credits and cash both. With an extended corpus of Rs 900 crores to be infused for MSMEs, we are hoping that limits of the collateral-free loan under the Credit Guarantee Scheme with little relief on interest rates. Promoting One District, One Product scheme will encourage GI products and other handicrafts of states which will directly benefit the local foods, benefitting specialised cuisines, their popularity as Tourism, Hospitality and Food are extremely inter-connected. With a boost in travel from this budget, we expect positive momentum in the restaurant and hotel businesses.

- Manjari Singh, Founder, The Chhaunk

COVID-19 concerns and lockdowns negatively hit the hospitality industry in India and worldwide. The tourism industry has seen a great turnaround over the last one year. There is an increasing thrust on the sector announced in the budget which will not only create opportunities for Hotels, Travel Services, and F&B sectors but will also contribute towards employment creation. According to the FM, the promotion of tourism will be taken up in mission mode, with the active participation of states and Public-Private Partnerships. Thus, this will have significant advances in boosting the GDP. The Union Budget has recognised the power and potential of small farmers and has envisaged building India as a global hub for Sri Ann or Millets. In terms of millets, India is now the world's largest producer and second-largest exporter globally. By maintaining attention to domestic production, consumption, and export potential, farmers and F&B brands can together build a robust food market in India.

- Abhilash Bhardwaj, Founder of The Fit Food

The Union Budget presented by the Finance Minister is growth oriented and will steer India towards holistic development across all pillars. The announcement of 50 additional airports and ramping up of air transport infrastructure is a welcome move and will support the nation's growing demand for air travel. The focus on promoting domestic tourism will provide impetus to further revival of the sector and aligns with our vision to strengthen India's transportation system. As India's greenest airline, we are delighted to acknowledge Green Growth as one the key priorities of this Union Budget and be at the forefront of creating green job opportunities in the country.

- Vinay Dube - Founder and CEO, Akasa Air

It's impressive to note that the budget’s focus has been on the promotion of tourism, considering it’s one of the biggest drivers of economic growth in India. FM Sitharaman’s statement that the sector holds huge potential has been backed by an increase in 9X capital outlay, which is the highest-ever allocation to railways. Progressive initiatives announced by the government on the upgradation of railway stations and full electrification of broad gauge routes by end of 2023 are welcome steps. The current budget's focus on the active development of railway infrastructure, faster roll-out of Vande Bharat train sets,  better connectivity and new rail lines will fuel train travel demand in India.

- Dinesh Kumar Kotha, Co-founder & CEO, Confirmtkt

The travel industry has bounced back phenomenally well in 2022 and while we have seen a strong recovery in domestic travel our next goal should be focussing on encouraging a faster revival of foreign tourist inflow and international travel. FTAs has seen encouraging growth month-on-month in the last few months however it is yet to realize its full potential. We are happy the government has recognized this and welcome the targeted incentives announced in this budget of developing 50 tourist destinations in India as a package for attracting domestic and international travelers.  Setting up 'unity malls' in state capitals and popular tourist destinations will mark tourist spots, monuments, and spaces for visitors which will further boost the sector. The development of 50 new airports will improve regional air connectivity and benefit travelers from Tier 2 & 3 cities which have seen significant growth in demand for air travel and first-time flyers post-relaxation of travel restrictions. While these initiatives will benefit domestic travel in the long run, leisure vacations abroad can get costly for Indian travelers with  TCS for overseas tour packages increasing from 5% to 20%.  Higher costs to Indian travellers because of  an increase in tax can impact the international travel demand which was slowly gaining momentum.

- Aloke Bajpai, Group CEO & Co-founder, ixigo

It is noteworthy that the FM has highlighted tourism as a focus area. The union budget entails multiple welcome initiatives like the revival of 50 airports, the building of 50 new destinations, and high budgetary outlays on railways, roads, and highways, which will help long-term growth for the domestic travel and tourism industry. However, one budget proposal that will negatively impact the industry is the move to increase the TCS mandate from 5% to 20% on overseas tour packages. This will not only increase the upfront cash outflow for customers but will also give an unfair advantage to foreign-based online travel booking platforms over India-based travel agents and tour operators.

- Rajesh Magow, Co-Founder and Group CEO, MakeMyTrip

The Union Budget 2023-24 has some positive takeaways for tourism, given the decision to promote the industry on mission mode via the participation of states, the convergence of government schemes and public-private partnerships. The country offers immense attractions for both domestic and foreign tourists. A proactive approach will help in tapping India’s tremendous tourism potential. Through an integrated approach, a minimum of 50 destinations are to be selected via the challenge mode. Under the ‘Dekho Apna Desh’ initiative, every destination will then be developed as a complete package for tourists. Besides, through the Vibrant Villages Programme, infrastructure and amenities for tourists would be facilitated in border villages.

- Akash Dahiya, Co-founder, SanKash

Overall Budget 2023 is a positive and balanced budget with the plan to select 50 tourist destinations for development as a whole new package for domestic and international tourism. This move will give a big boost to the tourism industry promising strong growth. We are also happy with the announcement of the revitalization of 50 additional airports, heliports, water aerodromes, and advanced landing zones. This will not only improve connectivity but will also give impetus to the travel and tourism sector. The government has announced investing Rs 75,000 crore including Rs 15,000 crore from private sources into 100 critical transport infra projects for steel, ports, fertilizer, coal, and foodgrain sectors. This is a welcome step that would lead to a new growth trajectory for the tourism industry and also provide more job opportunities for the youth. Secondly, the budget has given a boost to the railway with plans to provide a capital outlay of Rs 2.40 lakh crore, which is the highest ever and is nine times over the Financial Year 2014. This move promises strong economic growth for the travel and tourism industry as well as the country.

- Sonica Malhotra Kandhari, Joint Managing Director, MBD Group

Union Budget 23-24 turns out to be a much-awaited relief for the battered tourism sector. Specific focus on this sector will help this industry rebound.

- Gunjan Prabhakaran, Partner & Leader- Indirect Tax, BDO India

The Indian government this year has presented a growth-oriented budget with a special focus on boosting the manufacturing sector to create massive employment opportunities and to maintain India's status as the world's fastest-growing economy even after the global crisis due to the pandemic. The concessional corporate tax for newly incorporated manufacturing companies is a positive move towards promoting the "Make in India" initiative, as this will encourage new manufacturing industries as well as increase private investment in this industry. Apart from that, the funds allocated to the Green industry are also positive for the startups who are trying to bring new technology and products to this industry to bring about a revolution as well as contribute to the whole economy.

- Sejal Purohit, Founder, Seven Spring- Premium Tea Startup

We welcome the announcement made by FM to develop 50 tourist destinations in the country as a whole package to encourage both domestic and international tourism. As this step includes the development of destination in terms of transport connectivity, virtual connectivity, tourist guides, tourist security and high standard food joints, it will definitely boost the employment opportunities generated collectively by hotels, F&B players, tour and travel agencies, OTA etc. Also, the government’s plan to launch the ‘Dekho Apna Desh’ initiative will motivate people, especially young tourists to travel within India. The initiative will further strengthen the hospitality, travel and tourism sector to rebound rapidly and compensate for the losses that occur due to the pandemic. Overall, Union Budget 2023 was balanced and I expect the direct tax recommendations will empower the middle class to spend the money on lifestyle and travel.

- Kulbhushan Talwar, Cluster General Manager, Mosaic Hotels

With the government introducing new policies and incentives, the hospitality industry is likely to see an increase in investments and job creation. The policies include initiatives to promote tourism in India, which will help boost the sector's growth post-coronavirus pandemic. Additionally, the measures to support small businesses could provide much-needed relief for those struggling with the pandemic's economic effects. These changes should create a more competitive environment for hospitality companies and help them stay competitive in the future.

- Vyom Shah, Founder at Foodism

In Union Budget 2023, the retail industry was expecting a few direct SOPs which were a complete miss from the budget, especially around input tax credit. Keeping a positive view, I see measures for bringing more cash flows in hands of individuals through relaxed tax SOPs, which will certainly have a direct bearing on their spends and we see this as a small window of opportunity which can benefit the retail sector with increased spending.

- Rajat Agrawal, CEO, Barista

Measures announced in the Union Budget 2023-24, such as the focus on infrastructure improvement across the country, including last mile and rural/border areas; improvement in regional air connectivity and theme-based tourist circuits are likely to facilitate access to tier-II and tier-III towns and improve tourism prospects in these areas. Further, enhancing tourist security and the availability of an app for enhancing the tourist experience are steps in the right direction. Enhancing ease of doing business will also be beneficial for the industry, considering the pickup in new supply announcements in the last few months. Given that the travel and tourism industry accounted for about 9% of employment in the country in CY2019 pre-pandemic, sector-specific skilling and entrepreneurship development will augur well for the sector over the medium term. 

- Shamsher Dewan, Senior Vice President & Group Head - Corporate Ratings, ICRA Limited

The budget presented by Finance Minister Nirmala Sitharaman offers a roadmap for the holistic development of the nation, as we enter ‘Amrit Kaal’. It sets India up as the Startup Nation for the decade. Increment in the capital investment by 33% in infrastructure and Urban Infrastructure Development Fund (UIDF) will have a multiplier effect. Announcing a capital outlay of INR 2.40 lakh crore for the railway sector, addition of 50 airports, heliports, water aerodromes, and advanced landing grounds will further provide impetus to overall infrastructure, leading to improved connectivity across the country and enhancing domestic travel and tourism. It is heartening to see the extra emphasis given to tourism this year. The FM has identified tourism as one of the key sectors, with huge potential to generate employment for the youth, and reiterated government’s commitment to promote tourism on ‘mission mode’. We welcome the move to develop 50 cities across India as a complete package for domestic and international tourism, and developing an app to ensure all the key metrics related to travel and tourism for the said cities are regularly updated. We also laud the move to incentivise states to set up ‘Unity Malls’ in their most popular tourism destination for promotion of GI, ‘Made in India’ products and handicrafts. Integrated development of theme-based tourism circuit under the ‘Swadesh Darshan Scheme’, with special focus on improving infrastructure and amenities in border villages will provide a much-needed boost to rural and agriculture tourism. This will empower the farmers in building and setting up homestays that provide an additional source of income for them while also providing an authentic Indian experience to the travellers. OYO’s homestay projects in Ektanagar and J&K, in collaboration with respective state governments, have already yielded great results and helped boost tourism and overall economy in these villages. 

- Ritesh Agarwal, Founder & Group CEO, OYO