Centre mulls granting 'infra sector' status to tourism industry

India’s tourism sector, hit by the Covid-19 pandemic and the lockdown on travel, is set to receive a major boost with the Centre planning a set of measures to aid the sector that supports close to 40 million jobs directly and indirectly. Government sources have told Business Today TV that the Union Cabinet will soon consider a set of policy measures proposed by the tourism ministry, including granting it infrastructure sector status.

The grant of such a status will allow firms in this sector to access longer maturity loans and flexible refinancing through specialised lenders. The benefits include easier clearances for foreign direct investment. 

Among the other measures that are being considered by the government is a plan to refund foreign visitors the Goods and Services Tax (GST) they pay on purchases made during their travels in India. This is something that many overseas destinations including European Union nations do to boost tourism.

Inter-ministerial consultations are also focused on the options to reduce and rationalise other existing taxes levied on India’s tourism sector.

A recent report by the National Council of Applied Economic Research (NCAER) claimed that India’s tourism industry lost an estimated 21 million jobs in just three quarters of the last financial year due to the Covid-19 pandemic lockdown.

Travel and tourism was the largest service industry in India and estimated to be worth $234 billion in 2018, as per government data. The industry has become one of the largest foreign exchange earners in India. According to the World Travel and Tourism Council (WTTC), tourism generated $194 billion or 6.8 per cent of India’s GDP in 2019 and supported nearly 8 per cent of its total employment.

The proposed new National Tourism Policy will also fulfil another long pending demand – the revamp of India's visa, immigration and customs policies. The changes aim to not only boost normal tourism but even the growing segment of medical tourism.

The nine tentpoles of the proposed national tourism policy include welcoming the visitor with seamless connectivity and transport infrastructure, development and management of destinations, promoting fresh investment, diversifying the availability of tourism destinations, focusing on quality assurance and standards and skill development among others.

Under the new national tourism policy, the government proposes to promote synergy in transport and tourism to enhance visitor experience. Improvement of roadways, railways, air transport, waterways will be the focus. The policy will also lay emphasis on developing theme-based circuits, Buddhist circuits, and special tourism zones with priority to the North-East and Jammu and Kashmir, Ladakh.

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