Budget 2022 is a balanced budget that considers the overall state of the economy. The hospitality industry was the hardest hit by the pandemic, and the Budget offers some respite to the industry. Measures to boost tourism, infrastructure, and highway expansion, among other things, will benefit the sector.
The Budget showed a development and investment mindset, focusing on infrastructure, technology, skill development, and health that was needed. The FM announced an increase in the Emergency Credit Line Guarantee Scheme (ECLGS) in general, focusing on hospitality and allied services, particularly micro and small businesses (MSMEs); this would directly benefit the sector, allowing it to achieve new heights.
The FM also announced the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, which is projected to help micro and small businesses access extra credit of INR 2 lakh crore and create jobs. The additional funding for the hospitality and related industries will bring relief to an industry that has yet to recover to its pre-pandemic levels. The announcement acknowledges the hospitality industry’s pain. On the other hand, the specifics have to be looked at to understand the impact on certain enterprises and organisations.
The Budget also includes aggressive infrastructure development, including eight ropeways, an extra 25,000 kilometres of National Highways, and 400 new Vande Bharat trains with contemporary amenities, among other things. The inclusion of the groundbreaking ePassport in the Union Budget is highly appreciated. All of this will play a key role in encouraging foreign and local travellers to explore the country easily and give hospitality brands of all sizes a fresh lease on life.
The hospitality and restaurant industry is one of the country’s largest employers of human resources, and with the government’s commitment and support, the industry should expect better business in the future; this will inspire hospitality brands to invest more in the country, resulting in increased economic traction.
The plans announced to improve the country’s overall housing infrastructure are also encouraging. The government’s commitment to progress in a planned and sustainable manner is demonstrated by the formation of a high-level committee of urban planners and the designation of five existing academic institutes as centres of excellence in urban planning. We believe there will be unique opportunities for ecosystem members to come together and establish economies of scale, resulting in an increase in overall employment generation, with an emphasis on the need for Indian ‘Mega cities’ to turn into centres for economic growth.
However, the industry has borne the pandemic brunt for the past two years, and more direct and immediate help was expected. The long-standing demand for a reduction in GST, as well as remission or reduction in licence fees, which would have supported economic resuscitation, has not been met.