As Union Budget 2025 approaches, experts from the travel, tourism and hospitality sectors state key expectations including GST rationalisation, simplification of visa processes, infrastructural development, among others
Image for representational purposes only (Photo Courtesy: iStock)
Finance Minister Nirmala Sitharaman is all set to present her 8th consecutive Union Budget on Saturday, February 1. There’s anticipation and hope for structured measures across sectors. Travel and tourism experts are optimistic about the budget, eyeing reforms like GST rationalisation, infrastructure status, among others – demands that were overlooked in the previous budget.
ADVERTISEMENT
A look back at Union Budget 2024 – Tourism and hospitality
Union Budget 2024 measures gave a push to spiritual tourism, announcing development of some spiritual sites. Key highlights for the travel, tourism and hospitality industries from the previous budget include:
- Comprehensive development of the Vishnupad Temple at Gaya and Mahabodhi Temple at Bodh Gaya in Bihar to transform them into world class pilgrim and tourist destinations
- Development of Rajgir, which holds religious significance for Hindus, Buddhists, and Jains
- Government to support the development of Nalanda as a tourist centre besides reviving Nalanda University to its glorious stature
- Assistance for the development of Odisha’s scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes, and pristine beaches
- A simpler tax regime proposed for foreign shipping companies operating domestic cruises in the country, to realise the potential of cruise tourism
While several experts appreciated the reforms, others expressed disappointment in key demands being ignored. In a statement, Travel Agents Association of India (TAAI) had expressed disappointment over demands like reduction in Aviation Turbine Fuel cost, rationalisation of GST rates and abolishment of TCS on outbound travel being ignored.
Key expectations from Union Budget 2025
GST reforms
GST rationalisation and other tax reforms top the list of expectations from this budget, for tourism and hospitality experts.
Stating their key expectations in a press release, Federation of Hotel & Restaurant Associations of India (FHRAI) called for the rationalisation of GST rates on hospitality services.
“The current GST structure is among the highest in the world, which makes India less competitive compared to neighbouring countries. FHRAI recommends delinking GST on restaurants from room tariffs in hotels and restructuring GST rates for restaurants, banquets, and events,” it read.
Reflecting more on the GST reforms needed, Rajesh Magow, Co-founder and Group CEO, MakeMyTrip, says, “Allowing GST credit for hotel construction and rationalising GST rates will help reduce the overall cost of accommodation. Besides, there are couple of other operational and disparity-related GST issues faced by Online Travel Agents (OTAs). Mandatory state-wise GST registration with a physical presence in every state is adding to the administrative costs and management overhead unnecessarily. Since the nature of OTAs business is online, if registration in different states can be allowed using their central head office address, it will help in streamlining operations, reduce costs and improve efficiency.”
Vishal Kamat, Executive Director at Kamat Hotels (India) Ltd. and Chairman of CII Maharashtra Chapter, said, “Streamlining GST and consolidating multiple tax heads would go a long way in easing operational burdens.”
Simplification of visa process
Complex visa processes pose a challenge in the growth of global tourism. Sector leaders are hoping for simplification of these rules and processes.
Sandeep Arora, director of Brightsun Travel, India, states, “A key area we believe should be addressed is the simplification of the visa process. Streamlining visa applications will encourage more foreign visitors to explore India, boosting tourism numbers and generating increased revenues for the country. We believe that these measures will not only boost international tourism but will also create valuable employment opportunities, further contributing to the long-term growth of the travel sector.”
Echoing a similar sentiment, Kamat states, “Simplifying visa processes and establishing visa-free travel agreements with friendly nations could position India as a global transit hub.”
Infrastructural development and other policies
Other expectations of the sector include continued focus on infrastructural development, cultural initiatives, streamlined licensing policies, among others.
Arora says, “We hope to see a focus on policies that promote infrastructure development, particularly in key tourist destinations, to improve accessibility and enhance visitor experiences. The preservation and promotion of heritage sites is also crucial, as it will help attract more international tourists and showcase the country's rich cultural heritage.”
Kamat believes that hosting global and cultural events has spotlighted India’s potential. “As part of the CII G20 initiative, I’ve witnessed how these efforts amplify tourism and hospitality. States like Rajasthan and Gujarat have set benchmarks by hosting vibrant festivals and cultural events. Such initiatives boost local economies—from tea vendors to transport operators to retail businesses.”
Advocating for continuation of the spiritual tourism push facilitated through Union Budget 2024, he adds, “As we can see from the way people are visiting Ayodhya, Mahakumbh, etc., there is a definite desire in people to participate in such festivities and explore spiritual and religious destinations. So, focus on spiritual tourism should continue, not only this year but lifelong. Our identity and beliefs are important.”
Summing up the demands of FHRAI, Pradeep Shetty, Vice-President of FHRAI, said in the statement, “The hospitality and tourism sector is crucial to India’s economic growth. It provides employment opportunities and generates substantial foreign exchange earnings. However, the sector is currently facing multiple challenges due to restrictive policies and regulations. By granting infrastructure status to smaller projects, streamlining the licensing process and addressing GST issues, we can help unlock the full potential of this sector. These reforms will create a more competitive and sustainable environment for businesses, which will, in turn, help India position itself as a global leader in tourism. This is an opportunity for the government to align policies with the growing demands of the tourism industry and ensure that India remains a top destination for both domestic and international visitors.”
