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Mr Subhash Goyal (right), President, IATO, with the Senior Vice-President, Mr Murli Dhar, at a press conference in the Capital on Wednesday. — Ramesh Sharma

New Delhi , March 2

THE implementation of the Budget proposals 2005-06 could see the tourism sector being affected by as much as 7-10 per cent, the President of the Indian Association of Tour Operators, (IATO), Mr Subhash Goyal, said here on Wednesday.

"Our first reaction to the Union Budget proposals was that it was a very good Budget. However, after going through the fine print and reading between the lines, we can say that we were expecting much more. We cannot understand why the sector has not been given the priority that should have been given," Mr Goyal said.

IATO officials, while saying that the Budget was full of "contradictions", added that the decision to impose fringe benefit tax and some other measures announced in the Budget would have a negative impact on the tourism sector.

"We were expecting that there would be something for the creation of tourism infrastructure including hotel rooms. It raises the Budgetary allocation for the sector including providing more funds for publicity but that is merely marketing a dream without creating enough physical infrastructure in terms of creation of more hotel rooms," IATO officials said.

With input costs being taxed, there was bound to be a northward movement in prices of products and services offered, officials said.

The association Senior Vice-President, Mr Murli Dhar, added that the implementation of the Budget proposals could lead to a return of the Inspector Raj.

The association has welcomed some Budget announcements including the decision to extend the implementation of withholding tax on aircraft being leased till September this year. "This move will give a fresh lease of life to low cost, national and private airlines. It will also help the keep their costs under control," the association has said.

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