HBI Staff | Hyderabad 
The hospitality sector had high expectations from the Union Budget 2024-25 presented by FM Nirmala Sitharaman. However, the budget lacks substantial measures to address the fundamental challenges facing the sector, which are necessary to boost its growth.
Despite the significant multiplier effect of tourism on employment and the economy, key demands from the tourism and hospitality sectors—such as GST rationalisation, infrastructure status, ease of doing business, and policy reforms—were once again overlooked in the budget.
Here are insights from industry experts:
The hospitality sector has been pinning high hopes on the Union Budget for 2024- 25 presented by Smt. Nirmala Sitharaman today, on the backdrop of the Government of India’s stated vision of Viksit Bharat by 2047 and the critical role tourism industry holds in achieving it. However, 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 growth of the sector to be a $ 3 trillion economy by 2047.
Some key demands of tourism & hospitality to revitalise the sector such as GST rationalisation, 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. The hospitality sector is disappointed but not dejected as the overall focus on infrastructure development, employment generation and skill development and development of religious tourism centres are the silver linings which will help the sector to tide over some of the critical challenges that it faces today. The focus of Budget 2024 on youth employment, skill development and job creation are welcome initiatives. The industry has been facing a shortage of skilled workforce,especially in the hospitality sector.
It is also laudable that the Honourable Finance Minister’s Budget speech highlights the Governments’ commitment to make India a premier global travel destination through targeted investment and strategic initiatives. Development of iconic spiritual sites along with promotion of cruise and beach tourism can be helpful in attracting both domestic and international tourists.
Kabir Suri, President, National Restaurant Association of India
“Reflecting on the recently announced Union Budget, we would like to commend the Government and our Honourable Finance Minister Smt. Nirmala Sitharaman, for looking to establish economic measures that will drive India towards a better economic future. The EPF support for new hires will go a long way in significantly bolstering levels of employment in the country. This is crucial in developing a stable, secure and robust workforce which will be beneficial to all industries including the food services sector. The reduction in income tax slabs is a commendable move, empowering individuals with greater savings and disposable income, thus driving higher consumption levels, an essential catalyst for sustained economic momentum.”
He further added, “The emphasis on boosting tourism is a strategic step towards revitalizing the sector, promising a resurgence in hospitality industries. Also, support given to the MSMEs in the form of Mudra loan limit increase needs to be applauded. It is unfortunate that MSMEs in the food service sector will miss out due to the fact that the Food Services sector has not been recognised as an industry yet. The recent Economic Survey has laid focus on the creation of 8 million jobs each year till 2036. The food services sector is ideally positioned to drive this goal since it employs people with all education and skill levels. The current direct employment by the industry of 8.5 million people is slated to grow by more than 20% to 10.5 million in the next four years. However, lack of GST Input Tax Credit for the industry is slowing down the growth and job opportunities of this otherwise vibrant sector.”
K.B. Kachru, Chairman Emeritus and Principal Advisor, Radisson Hotel Group South Asia & President – HAI
Continued focus on infrastructural development, fiscal prudence, and consolidation. Tourism continues to be accepted as an engine of growth for the economy. Emphasis on spiritual tourism, however, no policy changes to expedite growth.
Tourism and hospitality play a crucial role in the growth of the Indian economy. The continued focus on government spending on infrastructure development augurs well for the sector. Improved infrastructure would translate into better connectivity, which will be beneficial to the promotion of tourism. The development of the eastern region, temple corridors in Gaya and Bodhgaya, and identification of Nalanda as a key tourism site continue to demonstrate the government’s intent to utilize the potential of tourism. Regrettably, however 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 that has been seeking rationalization of taxes. The benefits to individuals on taxation will augment the spending power. The focus on skilling and incentivizing employers for creating jobs are other positives that will benefit all sectors.
Although not directly linked to this budget, the industry would continue its ask for granting of infrastructure status for the hospitality sector and industry-related benefits by all state governments.
Nikhil Sharma, Managing Director and Area Senior Vice President- South Asia, Radisson Hotel Group
“We welcome the Union Budget 2024-2025 which focuses on positioning India as a global tourism hub through progressive initiatives. The surge in spiritual tourism has been recognized, and we are excited to see the sector receiving much-needed support in this year’s budget. The development of road connectivity projects, with a special emphasis on spiritual and cultural corridors, underscores the Government of India’s commitment to fueling the growth of the country’s rich cultural and spiritual network of tourism. At Radisson Hotel Group, we have always focused on Tier II and III cities, leveraging a first-mover advantage with 50% of our portfolio in these regions. Our strategic commitment to these destinations aligns with the government’s vision, allowing us to meet the increasing demand for spiritual experiences and further strengthen our presence across India. We are optimistic that this development will not only propel the domestic tourism sector but will also provide an opportunity for foreign tourists to further explore the rich culture of India.”
Pulkit Arora, Director, CYK Hospitalities
“Finance Minister Nirmala Sitharaman’s budget is a game changer for the tourism sector. India aims to establish itself as a world-class tourist destination, focusing on places that are of immense spiritual importance, which includes Vishnupath temple at Gaya, and Mahabodhi temple in Bodhgaya, and comprehensive development of the Kashi Vishwanath corridor, and the Brahmkunda of Rajgir and Nalanda, in Bihar.
The Indian Food and Beverage industry rises significantly each year. As India aims to promote world-class tourism experience, this would also benefit the F&B industry. The inflow of tourists – international or domestic would like experience the taste of the local food, which will eventually bring up the demand for local food vendors as well as reputed food brands. This would significantly result in economic and social growth. Also, there will be an increase in local employment opportunities to run successful food businesses and manage tourists in these cities.”
Manoj Bhat, MD & CEO, Mahindra Holidays and Resorts India Ltd
“The budget is focused on fiscal prudence, stimulating investments, providing employment, and encouraging growth in the economy. The emphasis on improved connectivity and infrastructure will greatly benefit the domestic tourism sector. The spotlight on developing religious tourism, will further boost the local economy by providing investment and employment.”
Akash Bhatia, CEO of Eco Hotels and Resorts Limited
“The recent budget plan highlights a game-changing vision for India’s tourism industry. Building up the Vishnupad and Mahabodhi Temple corridors, along with the extensive development of Rajgir and re-establishing the Nalanda University, will elevate India’s cultural and historical charm. We’re delighted about the assistance for making Odisha an ultimate top-spot for tourists. As one of the key players in the hotel business, it is our aim to ensure that our services will be exceptional enough to match these improvements and give guests amazing experiences that draw attention to India’s deep roots and lively culture.”
Kunal Vasudeva, Co – Founder & Managing Director, Indian School of Hospitality
The government’s allocation of INR 1.48 lakh crore for education, employment, and skilling, including training 20 lakh youth and upgrading 1000 institutes, is a significant step forward. For those pursuing vocational routes, this is a major win. It will help people develop practical skills and excel in their fields, bringing more youth into the formal economy. Additionally, with manufacturing bases in or near districts, there’s less need to migrate to cities, reducing mobility. Such initiatives are crucial for hyper-local job creation and boosting the manufacturing sector, driving India towards becoming a $10 trillion economy in the next 7-10 years.
The Union Budget’s provision for ₹10 lakh education loans with interest relief for higher education in India is a big win for those pursuing the academic route. Given our low gross enrollment ratio, these loans will make quality education more accessible, allowing students to choose institutions of merit. This embodies ‘Sabka Saath, Sabka Vikas,’ fostering inclusivity from the ground up. By enhancing local education opportunities and increasing our GER from 26% to at least 40% in the next 5 years, we can cultivate a skilled, competent, and agile-thinking workforce. This workforce is essential for job creation, manufacturing growth, and meeting the workforce needs across various sectors, supporting ‘Made in India for India and Made in India for the world,’ and propelling us towards becoming a $10 trillion economy in the next 7-10 years.
Ahsan Shervani, Vice President, Star Hotels Pvt Ltd (Shervani Hotels)
We welcome the allocation of approximately INR 2,450 crores to the sector, marking a 44.7% increase from previous estimates. This funding aims to enhance employment and stimulate tourism growth which is a welcomed move. As an industry we are still eagerly looking for a bit more rationalization in the GST structure for hotels and grant of infrastructure status to the industry.
The budget’s announcement to prioritise the participation of women in the workforce is welcomed in sectors like hospitality and retail. This initiative aims to diversify the workforce and recognizes the contributions that women can bring to these sectors. The budget is paving the way for greater gender equality and economic empowerment within these industries.
Furthermore, the announcement to promote water supply, sewage treatment, and solid waste management projects for 100 large cities reflects an approach to infrastructure development. These initiatives will not only enhance urban living standards but also increase demand across various industries involved in construction, engineering, and environmental technologies.
Overall, the budget’s focus on incentivizing employment, supporting women’s participation in key sectors, and advancing urban infrastructure projects is set to catalyse industrial growth, create new job opportunities, and drive sustainable economic development. This forward-looking strategy positions India for long-term resilience and prosperity.
SP Jain, Chairman and Founder, Pride Hotels Group
“We warmly welcome the budget announced today by Finance Minister Nirmala Sitharaman. The government’s focus on the tourism industry, especially the development initiatives for Jharkhand, Odisha, and the North East, is commendable. The special emphasis on Rajgir and Nalanda will undoubtedly enhance religious and cultural tourism, creating new opportunities for growth and community engagement.
In 2023, India’s tourism sector attracted over 9 million foreign tourists, marking a remarkable growth rate of over 40% year-on-year. The budget’s commitment to enhancing spiritual tourism, particularly through the development of significant sites like Bodh Gaya and the Vishnupada Temple, is a strategic move that promises substantial economic benefits for the regions involved.
However, we had hoped that the Honorable Minister would grant infrastructure status to the hospitality industry. As a highly capital-intensive sector, our industry requires significant investments, and the initial 3-4 years often yield no profits due to high-interest loans from banks. Granting infrastructure status would enable us to access loans at lower interest rates, facilitating the development of more hotels and improving the quality of facilities offered. This is essential to attract both Indian and international tourists and to support the overall development of our industry. .
