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MicroEconomy: Union Budget 2016-2017

 Everyone had a lot of expectations from the Union Budget 2016-2017.   Finance Minister Arun Jaitley presented the Union Budget for 2016-17 on 29 February, 2016 .

A Union budget is a quantified financial plan for a forthcoming accounting period but for half of the travel fraternity this Union Budget 2016-2017 presented like shocking news. By keeping this in mind T3FS spoke with Finance Minister and other renowned personality of tourism regarding the same burning issue of Union Budget 2016-2017.
The Finance Minister, Mr. Arun Jaitley, said, "It was extremely important for us maintain the discipline. I am quite sure, with all the steps we have taken, and hoped that in the next financial year we will be able to push through many more reforms.
The proposed reforms can help surpass the target of up to 7.75 per cent GDP growth as  projected in the Economic Survey.”
Mr. Subhash Goyal, President Indian Association of Tour Operators, (IATO), expressed his disillusion and said that “We had looked forward to this year’s Budget 2016/17 with lot of expectations for tourism sector getting due recognition with new incentives and tax benefits based on the foreign exchange earnings by the tour operators. Nationwide rollout of GST was giving us lot of positive feelings and we hoped GST regime shall help us set off Service Tax giving a significant boost to the TOURISM industry. Nothing about exemption of service tax, extending benefit of exporters of goods to the tourism industry and GST was announced in the Union Budget 2016-17. Growth momentum which was visible in the first month of January 2016 in terms of international tourist arrivals will lose the momentum.”
Mr. Goyal while concluding said “Tourism industry had been facing bad phase since past 3 -4 years and prospect of making money has stagnated the tourism growth and this will continue if no support from the government is extended to the tourism Industry. Neither new Jobs are being generated nor there is any attraction for our young generation to join the tourism industry as tourism sector remained neglected in last couple of years”.
 
Increased revenue through tourism only can help in combating current account deficit, employment generation in every nook and corner of the country, national integration. In general the tourism fraternity feels disheartened with such neglect of tourism, echoed Mr. Goyal. 
 
 
Mr. Rajeev Kohli, Vice President, IATO, mentioned that “announcement about increased baggage allowance with riders will not be of any use for International passengers if burden of taxes goes on mounting year after year. Also it is essential to increase baggage allowance for domestic airlines/sectors which can bring real benefit to tourists. Otherwise it will not make any positive impact.     
Infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs will further surmount the pressure on the tour operators who provide tourist vehicles for the tourism industry”. 
 
Mr. Kohli also mentioned that our request for introduction of Multi Entry Visa with e-Tourist Visa and increased days of validity did not get any consideration.
According to Mr. Pronab Sarkar, Hony. Secretary, IATO “Action Plan for revival of 160 unserved and underserved airports to be drawn up in partnership with State Governments will take longtime to materialize. However, this will be a good beginning for better regional connectivity and opening up new sectors for tourism activities, once implemented”.
 
 Commenting on the Union Budget 2016-17, Mr. Harshavardhan Neotia, President, FICCI said “Overall the budget proposals are in line with the development priorities of the nation. The Finance Minister has made a strong attempt to pump prime the rural economy and the infrastructure sector. This would yield dividends and we foresee a multiplier effect in the form of demand generation and employment creation over time. The state of the agriculture sector on account of two consecutive years of monsoon failure was precarious and it deserved the attention that was needed”.
“Additionally, we see a lot of emphasis on affordable housing segment which will also result in forward and backward linkages and thus propel growth. Sticking to the fiscal framework is another major plus and should offer comfort to the international community. Attempts towards tax simplification and improving the tax litigation framework are also noteworthy”, added Mr. Neotia.
 
 
Ankur Bhatia, Executive Director, Bird Group and Member, CII National Committee on Civil Aviation said “The budget for 2016-17 is for heartland of India, which is overall focused on agriculture, infrastructure development, education and health. The Finance Minister this year has laid emphasis on rail and road infrastructure developments as well as on new startups and Make in India campaign, which are good measures. We welcome, Cabinet’s decision of reviving underserved airports by allocating a budget of 50 – 100 crores each, developing 10 out of 25 non-functional airstrips in partnerships with state governments, which I believe will definitely accelerate the development of regional aviation sector and will also give a well deserving boost to the overall aviation sector.  
 
Although levying of additional cess in hospitality, could have been avoided as the industry is already burdened with taxes.
We do hope that the cess levied on combustion will be used for a betterment and development of green vehicles and infrastructure.
Overall a balanced budget with emphasis on development.”
 
Sharat Dhall, President, Yatra.com said, “The much awaited budget has turned out to be very friendly for the Aam-Aadmi but there could have been a bit more in it for the corporate sector. The proposal to increase the tax on ATF will result in increase in airfares and dampen air passenger growth which could have been a catalyst for economic growth. However, the focus on revamping roads and airports across the country is a positive move that should provide a fillip to infrastructure and the tourism sector as it will enhance connectivity to the smaller cities and encourage people to travel to unexplored destinations. Liberalisation in public transport and the government’s plea for private investors to contribute in refurbishing highways is also expected to create a positive ripple in the travel industry.”
Aloke Bajpai, CEO & Co-Founder, ixigo mentioned that “The Union Budget 2016 has laid out big investments for the infrastructure sector which include allotment of funds for the development of roads and highways and an action plan to revive 160 non-functional airports. These steps come as a welcome move for the travel and tourism sector.
The focus on travel and tourism is further reaffirmed with the Finance Minister announcing the annual programme “Ek Bharat – Shreshtha Bharat” which will aim at linking states and districts through exchanges in areas of language, trade, culture, travel and tourism.
 
Further, we also welcome the Government’s initiative to increase baggage allowance for international passengers and exempt passengers flying into India from filing the baggage declaration form if they are not carrying dutiable or prohibited goods. This will surely ease inbound tourism.
 
The current government's focus on the Indian startup ecosystem is very positive and the union budget 2016 has reinforced support for entrepreneurship and start-up businesses in India.”
 

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