Industry tag for hotels may bring in more funds: study
The Financial Express, January 11, 2010, Page 7
Sajan C Kumar, Chennai
With a view to give a fillip to investments in hotel infrastructure and promote the tourism sector, a study done by trade body Ficci, in association with Evalueserve, has set out a nine-point agenda. The study calls for granting the hotel industry the status of infrastructure and export industry, delinking of hotel projects from commercial real estate and 100% FDI in developing tourism infrastructure in India.
The study also endorses escalation of investment in the tourism sector, creation of land banks for budget hotels, single window clearance for new hotel projects by the state governments, identification of hotel sites to be given on long-term leases, improvement in civic amenities through the PPP model and development of one destination in each pro-active state as a model tourism destination.
According to the study, the hotel industry could not enjoy a multitude of benefits, owing to the fact that it has not been accorded industry status across the country. The status would encourage reinvestment in the hospitality sector, besides channelising investment flow in the tourims sector and help bridge the demand-supply gap. India requires investments worth Rs 60,000 crore over the next five years to meet the demand for about 1,50,000 rooms. As per World Travel & Tourism Council (WTTC) estimates, the Indian tourism industry would be generating about 31 million jobs both directly and indirectly in 2010 and would be responsible for creating 40 million jobs by 2019.
The tourism industry earned foreign exhchange worth $11.7 billion in 2008, an increase of 9.5% from the previous year. Given the quantum of earnings, the industry should be granted deduction on foreign exchange earnings, says the study. The benefits available under Section 80 HHD of Income Tax Act 1956, which was discontinued after 2005-06, should be revived. An exemption on the foreign exchange earnings of tourism industry would be beneficial for the industry’s growth.
The Financial Express, January 11, 2010, Page 7
Sajan C Kumar, Chennai
With a view to give a fillip to investments in hotel infrastructure and promote the tourism sector, a study done by trade body Ficci, in association with Evalueserve, has set out a nine-point agenda. The study calls for granting the hotel industry the status of infrastructure and export industry, delinking of hotel projects from commercial real estate and 100% FDI in developing tourism infrastructure in India.
The study also endorses escalation of investment in the tourism sector, creation of land banks for budget hotels, single window clearance for new hotel projects by the state governments, identification of hotel sites to be given on long-term leases, improvement in civic amenities through the PPP model and development of one destination in each pro-active state as a model tourism destination.
According to the study, the hotel industry could not enjoy a multitude of benefits, owing to the fact that it has not been accorded industry status across the country. The status would encourage reinvestment in the hospitality sector, besides channelising investment flow in the tourims sector and help bridge the demand-supply gap. India requires investments worth Rs 60,000 crore over the next five years to meet the demand for about 1,50,000 rooms. As per World Travel & Tourism Council (WTTC) estimates, the Indian tourism industry would be generating about 31 million jobs both directly and indirectly in 2010 and would be responsible for creating 40 million jobs by 2019.
The tourism industry earned foreign exhchange worth $11.7 billion in 2008, an increase of 9.5% from the previous year. Given the quantum of earnings, the industry should be granted deduction on foreign exchange earnings, says the study. The benefits available under Section 80 HHD of Income Tax Act 1956, which was discontinued after 2005-06, should be revived. An exemption on the foreign exchange earnings of tourism industry would be beneficial for the industry’s growth.
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