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Budget 2022: Hospitality industry disappointed with Sitharaman’s announcements

Budget 2022: Hospitality industry disappointed with Sitharaman’s announcements

“The number of meetings we held with the Finance Ministry and other ministries led us to believe that they were surely going to announce some sort of specific relief for the industry," said FHRAI VP.

Budget 2022: Hospitality sector disappointed Budget 2022: Hospitality sector disappointed

The hospitality and tourism industry, which has been severely impacted by the pandemic, is deeply disappointed with the Union Budget 2022. “The Budget has been gravely disappointing, the extension of ECLGS (Emergency Credit Line Guarantee Scheme) with additional allocation to the crawling hospitality sector and provisioning an outlay of Rs 2 lakh crore through CGTMSE (Credit Guarantee Fund for Micro and Small Enterprises) are the only relief measures provided as part of the Union Budget 2022-23. The special allocation through ECLGS will support the struggling sector to mitigate some of the pandemic-induced challenges,” says Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI).

The industry had requested for domestic travel for individuals and corporates to be a deductible expense in their IT returns. Inclusion of hotels and tourism related sectors in the National Infrastructure Pipeline (NIP), infrastructure status and industry status for the hospitality industry and allowing Input Tax Credit (ITC) for restaurants. The industry has also been requesting long-term credit facilities in view of the vulnerabilities and the time it would take for businesses to resume normalcy. “The number of meetings we held with the Finance Ministry and other ministries led us to believe that they were surely going to announce some sort of specific relief for the industry but it is a huge disappointment that it has not come through,” says Kohli.

Agrees Nakul Anand, Chairman, FAITH (Federation of Associations in Indian Tourism & Hospitality): "The Union Budget provides some relief and medium to long term infrastructure measures to the stressed tourism, travel and hospitality industry, but there was an immediate opportunity for more direct intervention to support the highly stressed tourism, travel and hospitality companies and their employees."

The Indian Association of Tour Operators (IATO) have also expressed deep disappointment over being overlooked in the Budget. “We had requested a one time grant based on our 2019-20 turnover, reduction in GST, restoration and enhancement of SEIS benefit, reducing taxes on international airfares and overall reduction of taxes on hospitality sector. Most disappointingly none of these found mention in the budget presented,” says Rajiv Mehra, President IATO. An extension of the loan under ECLGS has been announced, but it is of no use for the inbound tour operators as they are not able to pay EMIs of the loan they have already taken. Besides, banks are not providing fresh loans to the tour operators until they clear their previous loans. Further, the loans are not being given to tour operators who have taken loans under ECLGS 1 and 3,” explains Mehra.

“There has been huge employment loss besides financial loss in our sector. Just a few years ago we were earning huge foreign exchange for the government and in this hour of despair we expected some hand holding by the government,” he says.

Also read: Budget 2022 Live Updates: Govt to tax crypto 'assets', not 'currency' issued by RBI, says FM Sitharaman

Published on: Feb 01, 2022, 6:24 PM IST
Posted by: anwesha madhukalya, Feb 01, 2022, 6:17 PM IST