The Budget came as a major disappointment to the pandemic-hit travel, tourism and hospitality sectors. The industry players as well as economic experts were expecting a special package or incentives to revive these industries, which are among the worst-hit by the global pandemic. But the Budget did not even make a mention about any of these sectors.

To make matters worse, the Budget has cut allocations for tourism industry. It has slashed the budgetary allocation for the Ministry of Tourism by 19 per cent to ₹2,026.77 crore for 2021-22 as against ₹2,500 crore for the current fiscal. It has allocated ₹1,088.03 crore for development of tourism infrastructure for FY22 compared to ₹1,655.21 crore for 2020-21.

Industry bodies such as the Federation of Associations in Indian Tourism & Hospitality (FAITH) and Indian Association of Tour Operators have expressed their “deep disappointment” on the lack of immediate direct support for the sector, which has enormous employment generation capabilities and multiplier effect on various other sectors.

In a press statement, FAITH’s Chairman Nakul Anand said lack of immediate direct support in the Budget has disappointed the industry.

Anand, who is also the Executive Director at ITC, said, “The Budget laid out budget proposals for enhancing rail, road, ports, metro lite infrastructure & PPP in buses, airports and ports including vista coaches in tourist routes. These infrastructure measures may boost tourism over a long term but only once they are implemented.”

The tourism and hospitality industry accounts for more than 8 per cent of the country's gross domestic product (GDP) and contributes a large percentage of foreign exchange earnings and from domestic tourism activity.

Closure of businesses

In its letter to the Prime Minister in March 2020, FAITH had said that the pandemic has led to closure of businesses and mass unemployment estimated at 70 per cent of the total estimated workforce of ₹5.5 crore.

The National Restaurant Association of India (NRAI) also expressed its disappointment over the budget. “We were expecting some immediate liquidity support, rationalisation of the GST Structure for the sector, including restoration of Input Tax Credit and a policy roadmap on the ensuing E-Commerce Policy for the food service sector, which we reckon is very key to the survival and revival of the Restaurant Sector,” Anurag Katriar, President of NRAI, said in a statement.

Katriar added, “As an industry which is expected to grow to ₹5.99 lakh crore by 2022-23 and employing over 7 million jobs, it was disappointing to see that no specific announcements were made for the restaurants industry as well as the overall hospitality and the tourism sector in the just presented Budget.”