The Federation of Hotel & Restaurant Associations of India (FHRAI) has put forth a set of pre-budget expectations for the upcoming budget, focusing on pragmatic reforms for the hospitality sector in India.
FHRAI proposes granting infrastructure status universally to hotels with a project cost of Rs. 10 crores and above, regardless of city population, aiming to eliminate geographical biases and enhance growth and accessibility in the hotel industry. This move is anticipated to facilitate long-term loans at affordable interest rates, fostering growth in the sector.
The hospitality sector seeks additional stimulus packages and incentives from the government to achieve the target of welcoming 100 million international tourists by 2047. This includes a call for a favourable GST regime and ease of doing business measures in the hospitality industry.
Addressing the bureaucratic complexities in the sector, FHRAI emphasises the need for a uniform system for approvals and compliance. The association suggests measures such as a single window clearance system, deemed approvals, self-regulation, merging of multiple approvals and licences, and fixing a validity period of a minimum of 5 years for licenses.
Pradeep Shetty, President of FHRAI, highlighted the industry’s significance in India’s economic growth and urged the government to consider these reforms seriously, recognising the crucial role of tourism and hospitality. He said, “The hospitality industry is a vital contributor to India’s economic growth. We believe that the proposed pre-budget reforms are pivotal in catering to the untapped potential of our diverse nation, propelling the hospitality sector towards unprecedented growth. FHRAI urges the government to consider these reforms seriously, recognizing the crucial role of tourism and hospitality in shaping India’s economic landscape.”
FHRAI strongly advocates classifying tourism, travel, and hospitality in the concurrent list to establish a national shared common framework between the Centre and States. The association contends that tourism, which contributes around 10 per cent of the GDP, should be declared a priority sector in the country with special incentives and benefits.
The call for a comprehensive review and reduction of GST rates in the hospitality sector is another key proposal. Specifically, FHRAI recommends abolishing the 18 per cent GST category for hotels above ₹7500 and merging it with the more moderate 12 per cent GST category, aiming to make India a more competitive and attractive destination.
These proposed reforms are viewed as essential steps towards positioning India as a global hospitality hub. FHRAI anticipates a budget that recognises the pivotal role of tourism and hospitality in the economic landscape and implements measures to propel India to the forefront of global travel destinations.
