Budget 2021: Disappoints yet again

The Budget 2021, as Nirmala Sitharaman, the Union Finance Minister stated, rested on six pillars i.e., Health and Well-Being Physical, Financial capital and infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D, Minimum Govt. and Maximum Governance.

In her Budget speech, the FM announced the allocation of Rs.64,180 crore for the Atmanirbhar Swasth Bharat Yojana over the next six years. This allocation has been done to develop health care systems and develop institutions to detect and cure diseases. Not just that, the Centre has introduced the National Commission for Allied Healthcare Professionals Bill to make sure that proper regulation of 56 allied healthcare professions takes place. Another step is to meet the nutritional demands of different districts by merging Supplementary Nutrition Programme and POSHAN Abhiyaan under the Mission POSHAN 2.0. 

The FM also announced Rs.2,83,846 lakh crore for the health and wellness sector, having Rs.35,000 crore specifically for the COVID-19 vaccines.

As far as the aviation segment is concerned, Sitharaman mentioned that the government is planning to monetise assets by privatising airports in Tier-2 and Tier-3 cities to keep better management momentum. 

Besides, the Finance Minister announced the plan to carve better Railway system by 2030 under the National Rail Plan.

While the allocation of funds and the initiatives count as the positive steps taken by the Centre as they will help revive the hospitality sector in the long run. Despite requesting the Centre to pay attention towards the hospitality sector that has been long devoid of its due, it did not find a mention in the Finance Minister's speech on Budget 2021. BW got in touch with the leaders from the hospitality sector, and here is what they said.

The hospitality industry is disheartened

Commenting on the Budget announcement, Gurbaxish Singh Kohli, Vice President, Federation of Hotel and Restaurant Association of India (FHRAI), stated that the Union Budget 2021 has disappointed the Hospitality industry. "Hospitality and Tourism roughly account for 10 per cent of India's GDP and employ nearly 9 per cent of India's working population and yet, it failed to find space in the Union Budget. The Hospitality industry has been bleeding, and the FHRAI has brought it to Govt. 's notice through several representations time and again."

Mentioning the pre-Budget memorandum shared by FHRAI to the Hon'ble Finance Minister, Kohli said that the memorandum included some priority reforms to stabilize the industry such as Review of the Kamath Committee recommendations, Classifying Hospitality under the RBI Infrastructure lending norm criteria, Industry status to hotels, restaurants and resorts across the country. Furthermore, FHRAI had also requested the inclusion of Hospitality and Tourism in the concurrent list, MAT waiver for a period of three years, IGST billing to hotels for corporate and MICE bookings. 

"The hospitality industry is disheartened and feels demotivated in its darkest hour. With zero foreign exchange earnings and less than 25 per cent of pre-pandemic revenues, the sector is facing an existential crisis. The industry is the fall guy for the Govt. We stand by and come through for the Govt. in its every need, as we did during this pandemic, but we are surprised that the sector could not find even a mention in the FM's budget. We wish our Govt. would study what other countries have done to ensure tourism, the worst-hit sector, is kept alive. The Hospitality and Tourism industry was looking forward to relief measures to lift this severely affected industry by COVID19. Instead, it has yet again completely and fully chosen to ignore us," he added.

Budget has potential for transforming India

On the contrary, lauding the government for the positive steps taken for reviving the economy, Rohit Kapoor, Chief Executive Officer, OYO India & South Asia said, "It is heartening to see a budget entirely focussed on revitalising the economy."

He is positive that the growth-oriented measures, economic reforms and inclusive growth would pave the way for extensive economic recovery. He believes that the government's focus on extending and improving transport (road, railway, metro) infrastructure with nearly 217 projects worth over Rs.1 lakh crore to be completed under National Infrastructure Pipeline will enable travellers to explore destinations. As a result, the domestic tourism and hospitality industries will be bolstered. He also appreciated the incentivisation and promotion of digital payments as the steps would fast track India's transition into a digitally-enabled economy. 

Elaborating on the potential of the budget he said, "We are confident that with the series of interventions announced by the Honorable Finance Minister, Nirmala Sitharaman, our country is on the path of stable and quick economic recovery. With the mantra of 'Atmanirbhar Bharat' and initiatives reducing compliances for one-person-companies, a boost for MSMEs, the reduction in corporate taxation, and the steps to simplify GST for companies further and ease tax compliance will boost morale across industries. The funds allocated to COVID-19 vaccines will also strengthen confidence among travellers and boost faster recovery in the service sectors. The government's efforts towards skilling the country's youth and collaborating with other countries will spur entrepreneurship and enable job creation. This budget truly has the potential for transforming India." 

Shot in the arm for the ongoing vaccine drive

"India's vaccination program, which has garnered world-wide positive attention, may help in economic recovery as the situation of women and children is expected to improve with health programs resuming after vaccination of health workers and more people joining the workforce," said Ankur Bhatia, Executive Director, Bird Group. 

Speaking about the allocation of Rs.35,000 crore for the COVID-19 vaccine, he said, "The funding would definitely be a shot in the arm for the ongoing vaccine drive."

He continued, "The Indian economy is indeed awaiting a return to normalcy in sectors such as travel and aviation. These sectors which provide jobs to 10 percent of the population are the ones that are now carrying most of the Covid-19 burden and have yet to start operating at anywhere near pre Covid-19 levels. They are also the sectors responsible for enormous job losses and consumption declines. We expect a full-throttle vaccination programme augmented by the Rs.34000 crore funding will bring the long-awaited cheer to the sector. People will start flying with confidence for leisure like during Pre COVID-19 times after being significantly emboldened by vaccination against the virus."