A boost to Hospitality with Focus on Tourism: Tourism is one of the fastest growing industries in our country with great potential for further growth. Budget 2020 brings quite a few favorable announcements like 100 new airports by 2024, Tejas trains for iconic destinations, museum restorations etc. which would definitely have a positive impact on the industry. “Interweaved in the vision of cultural development, economic development and ease of life, the annual budget 2020 is reassuring for the hospitality as well as tourism industry,” said Zubin Saxena, MD and VP Operations, South Asia, Radisson Hotel Group.
Disposable Income May Increase: Budget 2020 was more focused on development. Government has allocated additional funds for the promotion of tourism and transport services - like airport, railways, highway sectors. This will boost the travel and hospitality industry and will generate employment, connectivity and will result in inbound traffic to India. “Due to the proposed tax slabs, there will be an increase in the disposable income which will channelize further economic growth. We are hoping that the economic situation will improve in the near future and will be beneficial to the hospitality industry,” said Rohit Malhotra, CEO at Jay Jay Capital and Investment Pvt Ltd on hospitality.
Concession in Corporate Tax: There has definitely been an increase in the budget allocation for the Tourism and Hospitality industry, from 1416 cr in FY 19 to 2500 cr this fiscal year, but since this is one of the fastest growing industry, there could have been a better announcement. “Some positive changes have also been announced such as concession in corporate tax rate, which will be beneficial, help us to remain competitive in the market and also help create maximum employment. A proper budget has also been set aside for food processing sector, which will boost the rural economy,” added Arjun Raj Kher, Brand Head of Hitchki and Bayroute.
Generating Employment: ''The Government's focus on development is clear and reinforced with the allocation of additional funds to the Airport, Railway and the Highway sectors. This will boost business and leisure travel thereby generating employment, connectivity and overall economic development of catchment areas. With digitisation and infusion of positive funds in the economy, we look forward to rubber hitting the road in the days to come,” added Gaurav Dewan, COO and Business Head, Travel Food Services.
Putting Money in People’s Pocket: "The second union budget has been very helpful, it is something that the entire QSR and hospitality sector has been waiting for. This budget puts the money where it belongs - in the people’s pocket,” added Tarak Bhattacharya, Executive Director - Himesh Foods [Mad over Donuts].
Focus on Infrastructure Development: “Overall the budget looks like concentrating more on Infrastructure and Agriculture development which can directly increase the Purchasing Power and thus demand can be increased. This can help the Food and FMCG industries to increase demand and there by a higher sale,” shared Aji Nair, COO, Mirah Hospitality [Khandani Rajdhani, Rasovara]. However the industry expected some relief in the form of Input Tax Credit as Taxes in Project purchases, Services and Rent forms a major expense in food business and hope this request will be considered in the days to come.
No Announcement on Input Tax Credit: It appears that in an attempt to simplify the tax structure by doing away with exemptions while lowering tax rates, the government may have ended up actually complicating taxation for individuals by offering tax payers a choice between the old system and the new one. Not taking away LTCG and taxing dividends in the hands of recipients are negatives in my opinion. “For the restaurant industry, the much awaited and logical step of allowing input gst credit has not been considered despite it burdening an industry that employs millions but is struggling with high costs and low profitability/ returns on investment,” pointed Annie Bafna, Owner, The Nutcracker.
Setting up Investment Clearance Cell: “The Union Budget has some welcome announcements for start-ups and the economy at large. The setting up of an Investment Clearance Cell for entrepreneurs (which will also offer funding assistance), deferring the ESOP tax burden on employees for five years (or until they exit the company if this occurs earlier), the abolishing of audits for small companies with an annual turnover of INR 5 crores are all steps that will create an enabling environment for start-ups.
A Boost to Nutritional Programmes: “The digital refund of duties to exporters is another good move. The robust allocations for agriculture, infrastructure development, nutrition programmes and other segments could also help boost jobs creation. Nonetheless, the bottom line will vest on how well these programmes are implemented,” shared Aakash Vaghela, Founder & Managing Director , AV Organics LLP.