GST rate cut, infra tag and long-term policies top industry’s wish list from Modi government 2.0

June 03, 2019 | Shashank Shekhar | The Big Picture

The industry has a long list of expectations from the new government, as it hits the ground running with a bigger mandate. Exorbitant GST slab rate emerged as the number one pain-point for industry leaders who voiced concern on its impact in eroding India’s competitive advantage. They urged the government to take a favourable view of the issue, bringing it down to 18 per cent from 28 per cent.

The popular mood suggested that the elusive ‘Infrastructure’ tag also needed urgent government intervention. Insiders also pointed out that arbitrary policies adopted by governments in states and centre, such as the highway liquor ban, was damaging business prospects. They advised the government to envisage long-term and consistent policies for sustained growth in the sector.

The government needed to address the perception issue marring Indian inbound numbers, they felt. They suggested roping in a top-notch PR firm to build up a favourable image of India as a tourist destination through conventional and new media outreach.

How these concerns are addressed will invariably shape the future course of tourism and hospitality sectors in the country.

SP Jain
MD, Pride Hotels

Hope government rationalizes GST structure and help India compete globally: SP Jain

I am quite confident that this time government will accord priority to tourism and hospitality sectors and provide the necessary infrastructure. In 2014, PM Narendra Modi had declared that tourism development was going to be a priority, but much progress has not happened in the past five years due to some other priorities. Now Hon’ble PM Narendra Modi is forming the government again and the government’s top priority to create more employment and provide jobs. Hospitality and tourism sector provides highest employment to all strata of society and earn foreign exchange for the country.

Secondly, the hospitality sector is suffering due to much exaggerated GST 28% which is making Indian hospitality uncompetitive when compared internationally.   I hope that the government will look into it, also rationalising GST rates in the hospitality sector so that it can compete and attract tourists from other countries.

EM Najeeb
CMD, Airtravel Enterprises

Mobilizing the private sector will mobilize growth: EM Najeeb

“Indian Tourism is possibly at a new point of take-off on an upward trajectory. The government during its last tenure had identified tourism as a major growth engine and had given full support. Even previous governments too had taken keen interest and aggressive steps to build up Indian tourism. The government has started its second term of governance, and I am sure, it would give great importance to tourism as a major economic segment. The government should create a good roadmap for tourism, hospitality and aviation sectors.

‘Brand Tourism India’ should be given a strong buildup through trendy promotions and media outreach. A good PR agency could take up an image-building campaign for India. To support the projected image, India should equip itself with necessary facilities, and infrastructure. Effective implementation of its forward-looking tourism policies is a very important step. The cultural heritage of India should be given a planned and good promotion, reestablishing India as a cultural destination of the world.

Product India should be developed understanding visitor expectations. We should make India a safe destination for tourists and create that feeling among tourists. Strict rules and guidelines must be implemented to regulate behaviour and practices towards tourists.

States promoting tourism aggressively should be identified, supported and incentivized. ‘Regional forums of State Tourism Ministers’ have to be created and activated, and they should be encouraged to create a vibrant tourism industry in their states, create products of those regions and market them effectively.

A ‘Standard Operating Procedure’ and guideline must be made mandatory at all tourist locations. Waste disposal norms have to be implemented. Water, air and sound pollution should be contained through regulations at all tourist centres.  India should be made a destination that is warm and welcoming towards tourists.

Once this is done, India should promote investments, giving priority to Indian investors in the sector. The government should move hand in hand with the private sector, supporting and partnering with them. Mobilizing the private sector itself will help in mobilizing growth. This will ensure the simultaneous growth of tourism in different regions.

The government should strictly follow sustainable tourism as a norm. Tourism should help the local community, to improve their income, and to generate employment. It should also conserve the local culture of the region, environment and nature.

Measures should be initiated by the government to improve seamless connectivity to aid tourism. We should promote MICE and medical tourism and create largescale sporting infrastructure for attracting such events.

The unique coastline of India should be explored to build up coastal and sea-based tourism. The government should also create a world-class ‘Tourism Business Portal’ for India.”   

KB Kachru
Chairman Emeritus, Radisson Hotels

Tourism needs long-term and consistent policies: KB Kachru

The government, in its previous term, did consider tourism as one of the five pillars for national growth. It is however true that not much has trickled down to the grassroots.

Tourists travel for business and leisure and we need stable and earnest policies to attract them. We often deal with one or the other kind of ban – highway liquor ban for example. There must be long-term policies and they must remain consistent with a new government in states or centre.  An inconsistent stance on policies around tourism and hospitality has made the country a laughingstock.

Subhash Goyal
Chairman – STIC Travel Group and Hony. Secretary- FAITH

Deploy PR agencies in all source markets to win the perception battle: Subhash Goyal

“The road ahead for the new government is to increase tourism numbers from 10 million to 20 million. 

Tourism should not be taxed more than 5%, including GST.  This will make India an affordable destination as because of high taxation, it has outpriced itself from neighbouring destinations like Thailand, Malaysia, Sri Lanka and Dubai.

Also, there is a need to change the law and order perception because of adverse publicity. We need to appoint a PR agency in all tourism generating source markets such as China, Japan, the USA, UK, France, Germany, Spain and South America.

Cleanliness in our cities and tourist destinations should be made top priority.  Despite the Swatch Bharat Abhiyan, we have a long way to go in keeping our cities and destinations clean.   My recommendation is that hygiene and public health should be made compulsory subjects in all primary and secondary schools of India and all school children should be asked to plant at least one tree every weekend.

We need to activate all the Indian embassies and have a counter in all embassies to promote tourism. We should focus more on social media and electronic media and promote India in the local languages of the source market like Chinese, Japanese, Korean, German, French etc.”

Zubin Saxena
CEO, Radisson Hotels

A single-window licensing system mechanism for hotels is needed: Zubin Saxena 

“Tourism has been identified as one of the main pillars of growth for the Indian economy. Ministry of Tourism is already undertaking various initiatives for development and maintenance of heritage sites. The number of such projects should be increased, and their implementation should be accelerated. There is a need for identification of more sites and larger investment in development of these potential destinations. Improved flight connectivity and clean up initiatives are imperative.

On the hotel development side, the sometimes convoluted and lengthy licensing process needs to be greatly simplified by looking at a single window clearance mechanism. Lastly, the GST structure for hotels also deserves attention and a lower tax base will certainly go a long way making the Indian tourism industry more robust.”

Jitendra Kumar Mohanty
CMD, Swosti Hotels and Resorts

Time for the government to ‘Act East’ in tourism: JK Mohanty

“In my opinion, while Ministry of Tourism always focuses on states and destinations like Kerala, Goa, Delhi, Jaipur, Agra, Gujarat, Rajasthan etc., while eastern India, particularly Odisha, has been neglected.

Odisha is filled with rich tourism potential with beaches, temples, wildlife, tribes of India, and eco-tourism spots. The state has recently developed the world-class Kalinga Stadium where International Hockey World Cup was held. It is soon to host the International Championship of World Tennis Association as well.  Odisha is also known for its hospitable down to earth polite people, and is free from terrorism, pollution, traffic jams, labour problems and women harassment etc.  These recent developments make Odisha a very unique tourist destination of the country.

On behalf of the hospitality industry and travel trade of Odisha, I urge the central government to give priority to the tourism sector of Odisha to take the state to greater heights. Also, Odisha, as well as eastern India, should have more space in the Incredible India 2.0 campaign.”

Veer Vijay Singh
MD, Trance Hotels

Revisit infra tag and GST tax slab to improve the sector: Veer Vijay Singh

Veer Vijay Singh’s wish list includes a reduction in GST slab from 28% to 18% as the highest slab. He also points out that liquor license rates remain exorbitant in states of Andhra Pradesh and Telangana. He adds that the industry status benefits needs to be extended to the hotel industry for power and water tariffs etc.

Infrastructure status is needed for the hospitality industry to ensure longer repayment period of loans as long gestation period of projects render them financially unviable, he says.

He suggests handing over the reins of the tourism ministry to “someone with knowledge of the subject and given support from the ministry of finance.”

Mahesh Iyer
Executive Director & Chief Executive Officer, Thomas Cook (India)

Look forward to a reduced corporate tax structure across the board: Mahesh Iyer

“We see the opportunity for increased focus on initiatives like UDAN, aimed at enhancing regional connectivity and affordable air travel, Heritage City Development and Augmentation Yojana (HRIDAY); integrated development of pilgrimage destinations through Pilgrimage Rejuvenation and Spirituality Augmentation Drive (PRASAD); increased allocation towards enhancement of the e-Visa initiative to include additional countries; development of new tourism circuits and attractions for the inbound traveller, along with a strong focus on infrastructure – roads, railways, cruises, waterways and sanitation. 

Given the recent challenges faced by the aviation sector due to the withdrawal of Jet Airways flights and other challenges faced by Indian carriers, we believe there is an urgent need for a holistic view and corrective measures to revive the sector. This is crucial and in the interest of the larger travel, tourism, hospitality and business environment. 

Our wish list also includes clarifying the issue of Air Travel Agent being subject to Tax Collection at Source. The amendment of the proviso to section 16(2) in claiming input tax credit on the tax charged by the airline will also help in providing for the specific scenario of payment made by corporates or registered passengers to a travel operator.  And finally, by focusing on Corporate Tax for the FY 2019-20, we look forward to a reduced corporate tax structure of 25% across the board.”