Union Budget 2024: Boosting Indian tourism with a Rs 2,479 Cr allocation

For the FY 2024-25, the Union Budget has given a big push to India’s tourism Industry through the allocation of Rs 2,479 Cr. This announcement has led to a surge in travel and tourism stocks, reflecting market optimism about the sector's growth potential.

While presenting the budget speech Finance Minister Nirmala Sitharaman said that the government will continue to focus on the development of tourism circuits and the protection of cultural assets. Regarding these measures, the work on setting up the Vishnupath temple in Gaya and Mahabodhi temple in Bodhgaya will be retained while the concept used will be the Kashi Vishwanath Corridor Project. These projects are proposed to be developed to boost the Spiritual and Cultural Tourism in Bihar.

Apart from the temples the Budget proposes measures for protection and development of the hot water spring at Rajgir and taking forward the process of making Nalanda one of the world heritage sites. Such endeavours are expected to promote the area and the country as a whole to the local and international market hence generating more employment and income opportunities.

Odisha, famous for its cultural and natural sightseeing, will also find funding for the construction of temples, scenery and beaches. This holistic approach aims to position Odisha as a prominent destination for diverse tourism experiences, from spiritual journeys to nature retreats.

The impact of these announcements was immediately felt in the stock market. Travel and tourism stocks, including Yatra Online, Easy Trip Planners (EaseMyTrip), EIH, Thomas Cook, and Praveg, saw gains of up to 4 per cent.

The Rs 2,479 Cr allocation has been considered with an increase of 44 per cent. A 7 per cent infusion from the previous year’s budget to the top and this government knows the importance of tourism in the provision of employment and economic growth. Some of this greater amount is meant to be spent on infrastructure, marketing campaigns, and other training and development activities for the industry. This substantial increase is expected to facilitate infrastructure development, marketing initiatives, and skill development programs tailored to the needs of the tourism industry.

Analysts had anticipated this boost, citing the need for continued government support to sustain the industry's post-pandemic recovery. Axis Securities highlighted India's potential to become a top global tourism destination, driven by a growing interest from both foreign and domestic tourists. The firm's analysis suggests that with strategic investments and effective marketing, India could significantly enhance its tourism offerings.

As per the government's projection, the travel and tourism market in India is projected to generate $23.72 billion in 2024, with an annual growth rate of 9.6 per cent over the next four years. This optimistic forecast is supported by the government's proactive measures and the inherent appeal of India's diverse cultural, historical, and natural attractions.