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Budget 2018 updates and reactions from industry experts

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In a bid to put the flagging revenues of the national transporter back on track, finance minister Arun Jaitley on Thursday announced a capital expenditure allocation of INR 1.48 crore for the railways, the highest ever. However, no major new trains were announced and the focus was more on modernisation and passenger safety. The 92-year-old practice of a separate Railway budget was discontinued last year and was merged with the Union Budget.

Jaitley said redevelopment of 600 major railway stations had been taken up. All railway stations with more than 25,000 footfall would have escalators, CCTVs and Wi-Fi facilities set up. Moreover, a specialised railway university will come up at Vadodara, which will serve as the training centre for manpower required for high-speed railway projects. The Railway capex has been pegged at INR 1.48 lakh crore, up from INR 1.31 lakh crore last year.

The government has allocated INR 11,000 crore to the Mumbai rail network and INR 17,000 crore for the Bengaluru metro. Also,150 km of additional suburban railway networks will be set up in Bengaluru at the cost of INR 17,000 cr. The government will even eliminate 4267 unmanned rail crossing in broad gauge in two years.

In aviation, the following impacts have been made:

The Airport Authority of India (AAI) has 124 airports and it is proposed to increase the number by at least five times one billion trips a year. Moreover, INR 60 cr has been allocated to kickstart the initiative. The UDAN Scheme will connect 64 unconnected airports across the country.

Apart from aviation, 99 cities have been selected for smart cities project with an outlay of INR 2.04 trillion and 10 prominent tourist sites to be developed as iconic tourist spots. National Highways exceeding 9,000-km will be completed in 2018-19 and regional air connectivity scheme shall connect 56 unserved airports and 31 unserved helipads.

Sharat Dhall, COO(B2C), Yatra.com, said, “We are happy that the budget has laid great emphasis on infrastructure development to boost tourism. The continued focus on UDAN, railway infrastructure, building tourist corridors, enhancing connectivity by starting operations in 56 unserved airports reflects the government’s commitment to the tourism sector. Airport capacity enhancement will boost tourist flows and strengthen connectivity to a large extent. The creation of 10 prominent tourist sites will lead to an escalation in tourism and is very welcome. We were hopeful that the government would bring ATF under GST so as to reduce airline costs and keep fares low to ensure continued growth in Indian air travel market.”

Ajay K. Bakaya, managing director, Sarovar Hotels & Resorts, said, “The positives in the budget are rail infrastructure, Bharatmala project, impetus to farmers, Heritage City Development, and healthcare. The move towards solar energy and operation green are welcome. However, INR 60 crore to push airport capacity is too little and nothing concrete has been done to combat pollution. The lack of relief in taxes to companies with a turnover of below INR 250 crores and taxing long term capital gains are also in the negatives.”

Simon Fiquet, general manager, Southeast Asia and India, Expedia, said, “The government has presented a budget that charts an all-inclusive development plan for sectors pegged to be future growth drivers for the country. The budget continued its strong focus on strengthening, expanding and upgrading the tourism infrastructure in India. In aviation – rounded development has been targeted – from increased regional connectivity and access through regional airports and expansion of UDAAN scheme to Airports Authority of India bolstering a five times capacity expansion, to accommodate one billion trips a year. Railways and Roadways have seen a major outlay for expansion and upgradation, be it wi-fi for entertainment or setting up cctv cameras for better surveillance , ease of travel through modernisation of toll, use of disaster resilient infrastructure and safety first policy for security.

Additionally, the emphasis on the developing 10 tourism sites into iconic sites and enhancing tourist amenities at 110 Adarsh monument sites will not only contribute to more international footfalls but also hugely augment the domestic tourism revenue of the country, in the years to come. The expansion of Swatch Bharat Mission and launch of Operation Green will also build a clean and green India for attracting more tourists and delivering an international experience. The budget with a holistic development outlay, showcases the government’s strong commitment to build India as a robust tourism economy.”

Nikhil Ganju, country manager, TripAdvisor India, said, “Having great infrastructure is critical to the growth of tourism in a country. The government’s focus on investing in airports to cater to one billion trips in a year is a welcome step and will help in making destinations more accessible to travellers – domestic as well as international. The development of prominent tourists sites into iconic tourist destinations is another step in the right direction and one which will raise India’s appeal as an international tourist destination.”

Peter Kerkar, CEO, Cox & Kings, said, “From a tourism standpoint, the government’s move to develop 10 prominent tourist sites as iconic tourism destinations is welcome as it diversifies our product offerings and creates tourism clusters.  Along with this, the move to upgrade tourism amenities at 100 ASI managed monuments will enhance the visitor experience. All this will generate huge economic activity as it also involves infrastructure and skill development in the region. Tourism is the largest employment generator in India and this will open up huge employment opportunities.

The move to expand the UDAN  (Ude Desh ka Aam Nagrik), to over 56 unserved airports and 31 unserved helipads will open up huge opportunities for the travel industry as connectivity will improve and people in these areas will be able to travel seamlessly within India and  overseas, thereby giving a boost to domestic and outbound tourism.

Overall, the thrust of this budget is on infrastructure development, which is what the tourism industry has always represented to the government. New tourism circuits can only come up if there was adequate development and this budget lays emphasis on it. Finally, giving a boost to the rural economy will also enhance the purchasing power amongst those living in rural areas and this in turn will stimulate travel. We have observed this over the last couple of years.”

Rakshit Desai, managing director, FCM Travel Solutions, Indian subsidiary of FCTG, Australia, said “Introduction of several initiatives to improve infrastructure facilities in Union Budget 2018 bodes well for travel and tourism sector and will help reinforce India’s image as a tourist destination internationally. Significant investments to address concerns around connectivity with impetus on development of highways and arterial roads, railways and airport infrastructure is bound to push inbound arrivals. A dedicated focus to promote seaplane activities in the country, along with development of heritage sites and iconic tourist destinations will further enhance appeal of India as a destination of choice. ‘Namami Gange’ will provide further fillip to religious tourism from both domestic and international travelers.

Overall, it is a budget with a developmental agenda and could have benefited the tourism sector little more with announcements around simplified GST along with detailed FAQs for the travel industry.”

Peter Kerkar, Group, CEO, Cox & Kings, said “From a tourism standpoint, the government’s move to develop 10 prominent tourist sites as iconic tourism destinations is welcome as it diversifies our product offerings and creates tourism clusters.  Along with this, the move to upgrade tourism amenities at 100 ASI managed monuments will enhance the visitor experience. All this will generate huge economic activity as it also involves infrastructure and skill development in the region. Tourism is the largest employment generator in India and this will open up huge employment opportunities.

The move to expand the UDAN  (Ude Desh ka Aam Nagrik), to over 56 unserved airports and 31 unserved helipads will open up huge opportunities for the travel industry as connectivity will improve and people in these areas will be able to travel seamlessly within India and  overseas, thereby giving a boost to domestic and outbound tourism.

Overall, the thrust of this budget is on infrastructure development, which is what the tourism industry has always represented to the government. New tourism circuits can only come up if there was adequate development and this budget lays emphasis on it. Finally, giving a boost to the rural economy will also enhance the purchasing power amongst those living in rural areas and this in turn will stimulate travel. We have observed this over the last couple of years.”

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