Spiritual Tourism Gains In Union Budget 2024-25, Hospitality Left Wanting For More

Finance Minister Nirmala Sitharaman, on July 23, 2024, presented the Union Budget 2024-25, marking the first full budget of the BJP-led government 3.0. A significant focus of her speech was the government's commitment to making India a top global travel destination.

To support this, the government has allocated INR 2,479 crore for the tourism sector for FY25. This is a slight increase from the INR 2,400 crore allocated in FY24.

Of the allocated INR 2,479 crore for tourism development, INR 1,750 crore will fund the development of tourist circuits under the Swadesh Darshan scheme, which focuses on creating sustainable and responsible tourism destinations based on specific themes. Besides, INR 240 crore is earmarked for the PRASAD scheme, aimed at rejuvenating pilgrimage sites. Moreover, the budget for the 'Incredible India' international marketing campaigns has been increased further from INR 3 crore this fiscal year.

East India Gets A Boost

One of the major highlights of the budget is the focus on boosting tourism, particularly in Bihar, with an emphasis on spiritual tourism. Sitharaman announced several key projects, including developing Bihar's Vishnupad and Mahabodhi temple corridors. These sites are of immense religious significance and are set to be transformed into world-class pilgrim and tourist destinations modelled after the booming Kashi-Vishwanath corridor, according to Sitharaman.

Besides, Gaya in Bihar will see a comprehensive development plan to make it an industrial hub. Rajgir and Nalanda will also benefit from significant development initiatives. Rajgir, known for its spiritual importance to Hindus, Buddhists, and Jains, will see a comprehensive development scheme. Nalanda will be developed as a tourist centre alongside the revival of Nalanda University.

In Odisha, the central government plans to leverage the state's scenic beauty, temples, craftsmanship, wildlife, and other attractions to boost tourism.

The budget also highlights infrastructure improvements to enhance connectivity and tourism in the region. Sitharaman announced the establishment of an industrial node in Gaya as part of the Amritsar-Kolkata industrial corridor, with a substantial allocation of INR 26,000 crore for various key infrastructure projects. These projects include the Patna-Purnea expressway, the Buxar-Bhagalpur highway, a two-lane bridge over the Ganga river in Buxar, and the Bodhgaya-Rajgir-Vaishali-Darbhanga corridor.

These initiatives are expected to boost tourism in Bihar, create jobs, and drive economic development across the region, reflecting the government's broader vision for a "connected India."

Hospitality Seeks Reforms

Industry reactions have been mixed. Rajesh Magow, Co-founder & Group CEO of MakeMyTrip, praised the emphasis on infrastructure development and reducing the TDS rate on e-commerce operators, which he believes will benefit travellers and taxpayers alike.

Ahsan Shervani, Vice President of Star Hotels Pvt Ltd, welcomed the increased allocation for tourism but expressed a desire for more rationalisation in the industry's GST structure and infrastructure status.

Pradeep Shetty, President of FHRAI, shared, "There is nothing spectacular in the budget to bring structural changes to address the fundamental challenges it faces in a competitive world order and to accelerate the sector's growth to be a $3 trillion economy by 2047."

"Some critical demands of tourism & hospitality to revitalise the sector, such as granting of infrastructure status and bringing ease of doing business and policy reforms, have not been considered in the budget once again, given the well-accepted multiplier effect of tourism on employment and economy," Shetty added.

Underlining the same, K.B. Kachru, Chairman Emeritus and Principal Advisor, Radisson Hotel Group South Asia & President–HAI, said, "There has been no policy announcement to facilitate the development of hotels and promotion of inbound tourism. The announcement of GST simplification and comprehensive review of the Income Tax Act provides some hope for the sector seeking rationalisation of taxes."

Likewise, Madhavan Menon, Executive Chairman of Thomas Cook (India), expressed displeasure over the lack of focus on the hospitality sector. "We are disappointed to note that key pillars in India's Tourism agenda - Aviation & Hospitality were not mentioned as part of the Budget, and both standardisation of GST rates on hotel tariffs to 12 per cent and the reduction of ATF remained unaddressed."