Sandeep Singh, Director Of Rubystone
The recommendations we have made to the Hon. FM for the upcoming Union Budget includes; giving the hospitality industry infrastructure status and classifying hospitality under the RBI Infrastructure by lending norm criteria for access to long-term funds to improve the supply of high-quality accommodations and, as a result, stimulate greater domestic and international travel demand. Hotels built with an investment of INR 200 Cr or more have been accorded infrastructure status. This criterion needs to be lowered to INR 10 Cr per hotel to boost the budget category in hotels. As a result, hotels can obtain term loans with cheaper interest rates and longer repayment terms.
In addition, they urged that the hotel sector receive perks and industrial recognition. The country should designate the hotel industry as an industry, and a fund should be established to cover any fictitious losses. Many State Governments have given hotels industrial status; nevertheless, the rewards and advantages that come with being in industry have not been granted to the sector. A higher inflow of both domestic and international tourists will increase demand and, in turn, further boost confidence in Capex spending in the tourism industry, contributing to structural employment growth. The lower cost of operations, spread over a more extended payback period, will reduce the cost of supply, thereby increasing demand. To pass effective legislation to turn tourism into a national priority, we have also asked that it be added to the concurrent list of the Indian Constitution.
All States will be encouraged to harmonize their regulations if the Center declares tourism and hospitality as an industry and places them on the concurrent list. It will provide improved cooperation between the State and the Center for funding distribution between projects and programs, implementation geared towards the all-around development of the nation’s tourist industry. High-quality brownfield Capex and capacity development will greatly benefit from the extension of investment-linked benefits under Section 35 AD to ongoing hotel and resort capital expenditures, which will speed up investment and employment in the industry. Only new 2-star hotels and above-category hotels are eligible for this bonus under Section 35 AD.
