INTERIM Aims for tourism growth, yet unease lingers in travel industry
While the Interim Union Budget 2024 demonstrates a proactive stance toward laying the groundwork for long-term growth in the tourism sector, the persisting concerns within the travel trade underscore the need for nuanced and targeted support and attention to the immediate challenges faced by the sector.
On February 01, Finance Minister Nirmala Sitharaman presented the interim budget for the fiscal year 2024-2025, primarily emphasising stimulating economic growth. On the tourism front, a notable announcement pertained to the focus on enhancing tourism infrastructure on islands, with specific attention given to Lakshadweep. The budget also unveiled ambitious plans for infrastructure development, particularly in the establishment of new railway and port corridors and the growth and enhancement of air connectivity and airport infrastructure across India.
Budget Surge and Cuts
One notable highlight is the boost in the budgetary allocation for the tourism ministry, which has been increased to R2,450 crore in the fiscal year 2024-25. This marks a significant rise of 44.7 per cent compared to the revised figure for the current financial year, which stood at R1,692 crore. There has been a reduction in expenditure on certain aspects, particularly in promotion and publicity. The allocation for overseas promotion and publicity, which includes market development assistance, has experienced a notable decrease of 97 per cent, plummeting to R3 crore in Budget 2024 from the previous allocation of R95 crore in the preceding budget. This year, the Prashad Darshan scheme of the tourism ministry has maintained its budget allocation at R240 crore, consistent with the previous year. An amount of R1,750 crore has been earmarked for the Swadesh Darshan scheme.
Focus on Empowering Tourism and People
“States will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them on a global scale. Tourism, including spiritual tourism, has tremendous opportunities for local entrepreneurship. Since the pandemic, there has been a surge in domestic tourism, and the addition of air routes and port connectivity is expected to create more jobs,” said Sitharaman.
Sitharaman also highlighted the dedicated attention directed towards enhancing tourist infrastructure in the Union Territory of Lakshadweep. With many Indians seeking alternative destinations following a diplomatic row with the Maldives, the government’s focus on improving Lakshadweep’s tourist facilities aims to capitalise on this shift in preferences while positioning Lakshadweep as an attractive and accessible destination.
“Toaddresstheemergingfervourfordomestic tourism, projects for port connectivity, tourism infrastructure, and amenities will be taken up on our islands, including Lakshadweep. This will also help in generating employment. Further, after the success of Vande Bharat trains, around 40,000 more rail bogies will be converted to Vande Bharat coaches. This will further create job opportunities while reducing travel time as well as increasing tourism across the country,” the finance minister stated.
Sitharaman emphasised upon the success of organising G20 meetings in 60 places which presented the diversity of India to a global audience. She said that the country’s economic strength has made it an attractive destination for business and conference tourism. “Our middle class now aspires to travel and explore. Tourism, including spiritual tourism, has tremendous opportunities for local entrepreneurship,” she mentioned.
Aviation to Soar Higher
Sitharaman also reiterated the Union Government’s commitment to the growth and enhancement of air connectivity and airport infrastructure across India. She highlighted the significant strides made in the aviation sector over the last decade, with the number of airports doubling to 149. Underscoring the success of the UDAN scheme in facilitating connectivity to tier-2 and tier-3 cities, the finance minister reported that 517 UDAN routes are actively serving 1.3 crore passengers. She emphasised the government’s dedication to the continued expansion of existing airports and the swift development of new ones. Sitharaman also pointed out the robustness of the Indian aviation industry, noting that domestic carriers have collectively placed orders for 1,000 new aircraft.
Divergent Views
The Interim Union Budget 2024, however, has evoked a mixed reaction from various sectors of the travel and tourism industry, including hospitality, aviation, and travel associations. While the finance minister seemed very positive about promoting the tourism sector, many tourism stakeholders have expressed enthusiasm for the initiatives aimed at boosting domestic tourism, enhancing connectivity, and investing in infrastructure. However, not everyone is pleased. All major travel associations like IATO and TAAI have expressed disappointment, citing the absence of specific and immediate support measures for the travel and tourism sectors.