The hospitality sector in India is a powerhouse for job creation and a key contributor to the nation’s economy. With the Union Budget 2025 around the corner, this pivotal industry is hopeful for policy changes that could propel it toward the ambitious goal of $3 trillion tourism GDP by 2047.
India’s restaurant sector, a critical segment of hospitality, has outlined several expectations, including Input Tax Credit (ITC) for GST, simplified labor laws, a streamlined approval process, tax incentives, infrastructure status for hotels and convention centers, and GST rationalization. Industry bodies like the NRAI and FHRAI have already appealed to the Finance Minister, seeking measures to support growth and sustainability. Here’s a look at what’s at stake and what experts are saying.
Driving Tourism and Job Creation
India’s growing population demands new job opportunities, and the hospitality sector is rising to the occasion, with restaurants mushrooming nationwide. However, this vibrant industry faces challenges like fluctuating food and beverage prices and high GST rates. The sector’s leaders urge the government to reconsider its policies to unlock its full potential.
Col. Manbeer Choudhary, CMD, Noormahal Group, highlights a crucial demand: “One of the key expectations from the government is the abolition of the 18 percent GST category for hotels with room rates exceeding Rs 7500, merging it with the 12 percent GST category to stimulate domestic and inbound tourism. Additionally, granting industry status to the hospitality sector could improve access to finance, regularize policies, and take a strategic approach to tourism development. Special allocations for infrastructure in tier-II and tier-III cities can boost regional tourism while creating local employment opportunities.”
"The hospitality and tourism industry is a vital pillar of India’s economy, supporting millions of jobs across cities and villages. However, the sector is facing challenges due to declining tourism as inflation and high taxes make travel less affordable. We hope this budget introduces measures to make travel more accessible and budget-friendly. Reducing GST rates for hotels, restaurants, and operators in the budget-friendly and hostel categories could help lower costs for travelers, encouraging more people to explore India’s rich cultural and natural diversity. Investments in better tourism infrastructure, improved connectivity, and tax incentives for businesses, along with easier access to loans for small operators, can further boost the sector. These steps would not only revive tourism but also strengthen the economy and create employment opportunities across the country," adds Keith Menon, Co- owner of Hermiting Hospitality.
Relief for Startups and Eco-Friendly Initiatives
“Increased budgetary support for food processing facilities might drive rural job creation and boost exports,” shares Simranjeet Singh, Director, CYK Hospitalities. Singh also emphasizes that tier-II and tier-III cities could benefit from policies promoting digital ecosystems and innovation in sectors like agri-tech, health-tech, and green-tech. Startups are also clamoring for continued tax exemptions and the removal of angel taxes to attract more funding.
GST Refunds to Boost Inbound Tourism
Zero GST or GST refunds for foreign tourists could elevate inbound tourism and global competitiveness. Additionally, eco-friendly incentives and investments in green tourism infrastructure can align the sector with the United Nations Sustainable Development Goals, appealing to conscious travelers. Technology and AI integration, alongside sustainability-focused policies, could transform the hospitality industry, making it more competitive and future-ready.
Path Towards Sustainability
Simplified taxation, including reduced GST rates for small eateries, is a major ask from the food and beverage sector. Subsidies for sustainable packaging and support for local sourcing can ease operational burdens while aligning with global sustainability trends.
“At 99 Pancakes, we hope the Union Budget 2025 addresses growth enablers for the F&B industry,” says Vikesh Shah, Founder of 99 Pancakes. “A reduction in GST on dining services and tax relief on sustainable packaging could be crucial. Scalability and market expansion will benefit from advanced kitchen technologies that drive operational efficiency.”
Reinstating Input Tax Credit (ITC)
The absence of ITC has been a long-standing issue for the restaurant industry. Sandeep Jain, Founder & MD, Desi Masala, stresses, “Reinstating ITC on GST would reduce operational costs and boost profitability. Tax incentives, easier credit access, and rationalizing licenses are also critical. Granting industry status to the food service sector will enable financial benefits like lower-interest loans, special schemes, and faster license approvals. These measures can stimulate entrepreneurship and drive sustained growth.”
Niketa Sharma, Managing Director, Keish Hospitality, adds, “Allowing input tax credit setoffs would significantly improve profitability. Additionally, investing in infrastructure and promoting lesser-known destinations will attract tourists, creating jobs and driving economic growth.”
Online Delivery and Cold Storage Support
With inflation affecting costs, the sector seeks budget provisions to enhance online ordering systems and curb monopolistic practices by platforms like Swiggy and Zomato.
“Supporting service charge mandates and government-backed insurance programs to cover potential losses will ensure financial stability,” says AkshayLuthria, Founder of Street Storyss. “Provisions for better online delivery options are urgently needed.”
In the agriculture and food processing sectors, investments in cold storage and transportation infrastructure are critical. Janardhan Swahar, MD & CEO of Y-Cook India Pvt. Ltd., explains, “Incentives for sustainable farming and technology adoption can enhance productivity and competitiveness in global markets, contributing to both the economy and food security.”
Nidhi Singh, Co-Founder of Samosa Singh, shares a similar sentiment: “Simplified taxation and sustainable business practices can boost startups like ours. Stimuli for local sourcing, reduced taxes on essentials, and support for cold-chain infrastructure will improve operational efficiency and product quality.”
Alco-Bev Industry’s Expectations
The alco-bev sector, a major revenue contributor for states, seeks regulatory consistency and streamlined policies.
“Effective Free Trade Agreements (FTAs) and standardized pricing across states are essential,” notes John Royerr, Founder of Ochre Spirits. “A stable regulatory framework and innovation incentives can position India as a global leader in the alco-bev space.”
Hopes for Interest Rate Reductions
The retail sector anticipates transformative policies like interest rate reductions to facilitate financing and drive growth.
Shekhar Swarup, Joint Managing Director, Globus Spirits Limited, highlights, “Tax relief for citizens could boost disposable income, enhancing purchasing power. Recognizing F&B retail as an essential service and offering subsidies on utilities and land costs would also provide a much-needed lift.”
A Vision for Industrial Growth
With the Union Budget 2025 poised to impact industries across the board, the hospitality and restaurant sectors eagerly await announcements that could pave the way for growth, sustainability, and innovation. Let’s hope the government delivers on these expectations to empower one of India’s most vital economic engines.
The most awaited Union Budget 2025-26 by Modi 3.0 was presented by the Finance Minister Nirmala Sitharaman in the Parliament today. With a strong focus on extending infrastructure status, mudra loans to homestay owners, Udaan connectivity scheme and increasing disposable income through tax relief is a major boost for the economic sector.
The Union Budget 2025-26 lays a strong foundation for transformative growth, particularly for the restaurant and hospitality industry and the real estate sector.
Increase in Consumer spending
“We anticipate increased consumer spending, leading to higher foot traffic in restaurants, more frequent dining out, and sustained demand for food delivery services. The budget's emphasis on urban redevelopment, including the ₹1 lakh crore Urban Challenge Fund and enhanced infrastructure spending, creates exciting opportunities for mixed-use developments and real estate projects,” adds Aayush Madhusudan Agrawal, Founder & MD, Inspira Global & Lenexis Foodworks.
He stated, “Additionally, the allocation of ₹1.5 trillion fiscal support for MSMEs is expected to drive capacity expansion, creating a ripple effect that will further fuel demand for industrial real estate. The support for Tier-2 cities and the focus on urban innovation will not only stimulate real estate growth beyond the metros but also bolster homebuyer confidence and encourage further expansion. From gig worker welfare to the development of smart, sustainable cities, this budget's holistic approach will drive India's next wave of economic progress, creating new avenues for investment, innovation, and growth across our industries."
Launch of Mudra financing
Another encouraging development is the launch of Mudra financing for homestay enterprises. It will allow local company owners to launch and expand small tourism enterprises, particularly in less well-known locations. This will boost employment and promote travel to these areas.
"The National Geospatial Mission's efforts to enhance spatial data and mapping will help with improved infrastructure development and planning for the tourism industry. All things considered, these actions demonstrate the government's dedication to elevating India as a premier international travel destination and fostering fresh growth, employment, and innovation prospects in the industry," mentions K Syama Raju, President of FHRAI.
Major Relief for Taxpayers
The FM has proposed a major announcement on Income Tax Front as the Income Tax limit of taxpayers from Rs 7 lakh to Rs 12 lakh will have zero tax obligation from next financial year.
Commenting on the big move, Rahul Seth, Co-founder, Burger Singh says, "New income tax rates will boost consumption by easing the financial burden on the middle class, while term loans of up to ₹2 crore for first-time entrepreneurs will drive business creation and employment. As a QSR brand deeply connected with both sectors, we welcome these measures that enhance ease of doing business and financial inclusion, ensuring greater accessibility to quality dining options across India."
While Rajat Agrawal, CEO, Barista Coffee notes, "Budget for the year 2025 entails more income in the hands of the middle class with exemption of income in the hands of the salaries class till INR 12 lacs, this will also benefit individuals at higher earnings. Higher income will support the agenda on spending and will support the middle class on their allocation of funds beyond their daily needs and could benefit the retail industry at large with more money in the hands of the middle class. Further lowering down of taxes for other than salaried class will also support spending."
“A deep-rooted plan to bring more investments on building infrastructure and connectivity through dedicated spends on new airports and routes, will further create an opportunity for large reach and mobility which will further support retail businesses with increase in better inter-city connectivity and tourism,” adds Agrawal.
Adding his perspective, Amit Jatia, Chairperson – Westlife Foodworld,(owner and operator of McDonald’s India W&S) points out, “I would congratulate the Finance Minister for presenting a prudent budget that lays out a futuristic blueprint, aligning with India's consumption driven economy and the vision of Viksit Bharat."
"The measures announced today are well-positioned to fuel India’s consumption engine through a smart fiscal framework. An increase in the tax ceiling to INR 12 lakh is a welcome move which will certainly strengthen household purchasing power, driving demand across sectors. I am particularly excited with the announcement of the proposed National Institute of Food Technology in Bihar. It is a significant step towards advancing food innovation and strengthening India’s retail and food ecosystem, fostering innovation, skill development, and economic growth," adds Jatia.
Extends infrastructure benefits
The government has proposed a major initiative of infrastructure benefits to hotels in 50 destinations in partnership with state governments, performance led incentives to states for destination management, hygiene, branding and marketing of destinations.
Conclusion
With a smart fiscal framework and a five-pillar strategy for inclusive growth, this budget paves the way for an optimistic business environment and stronger consumer confidence benefiting the overall economy and organized sector players like us.
As we move closer to the much awaited budget for 2024, the hospitality industry is expecting some major shifts in policies and financial aids that will help in its growth.
Addressing the GST incongruity is paramount for fostering equitable growth within the hospitality sector and the sector is eagerly waiting for the same as the year looks promising for the industry. “We strongly urge for parity in GST rates between standalone restaurants (5%) and hotel restaurants (18%), recognizing that this disparity adversely impacts our industry. A harmonized tax structure will undeniably contribute to a more resilient and competitive landscape within the hospitality and tourism sectors,” said Tejus Jose, Director of Operations, ibis and ibis Styles India.
The sector not only look for a budget that not only acknowledges the significance of the hospitality industry in bolstering India's global appeal but also takes concrete steps to create a conducive environment for sustainable growth and competition.
Sharing his on the same, Vishal Anand, Founder, Moonshine Food Ventures addressed the need for scaling tourism to new heights. “The expectations from the upcoming budget are there as they have been for over the years. Especially for the F&B sector. With an increased focus on scaling tourism to new heights, there is an expectation for allowances, subsidies & steps to push the F&B sector as well,” he further added.
"Lifestyle health problems in India are increasing and unhealthy food is a major contributor to this issue. The government needs to take cognizance of the problem soon and put in place solutions so that long term effects of such unhealthy foods can be contained.
Healthy foods and beverage options are available, however, 74% of people in India find it unaffordable, as per the ‘State of Food Security and Nutrition in the World’ (SOFI) 2023 report by UN. Sufficient tax breaks and financial incentives for healthy foods and beverages as well as boost in spending towards awareness of healthy eating will go a long way in solving this problem,” commented Abhishek Sarwate, CEO, Utopian Smoothies.
Not only this, in the dawn of the new financial year, the hospitality (specially QSR) sector stands resilient, yet burdened by the inequity of the current TAX structure and hence brands and businesses are expecting a low GST rate.
“The imposition of a 5% GST without availing the Input Tax Credit (ITC) deprives our industry of rightful benefits, resulting in a scenario where both businesses and patrons bear the brunt of the full cost. From raw material to the end product and fixed expenses like rental, utility etc. the hospitality sector diligently pays an 18% GST without reaping the advantages of ITC. As we embark on this fiscal journey, we call upon the government to consider extending ITC benefits against the 5% GST,” pointed Gagan Anand, Founder and Director, Scuzo Ice ‘O’ Magic, India’s first Live popsicle concept and dessert café.
The experts also believed that this thoughtful adjustment will not only alleviate the financial strain on the industry but also empower businesses to provide enhanced services and experiences. Let this new financial year herald a fair and symbiotic relationship between the hospitality sector and the taxation system, fostering growth and prosperity for all, they shared.
Commenting on the same, Vikrant Batra of Dhansoo Café mentioned, “Restaurant industry is one of the most significant contributors to the national economy and one of the highest employment creators in India. The key request that we want to highlight in this budget is the need for reinstating the Input Tax Credit (ITC) under the Goods and Services Tax (GST) for the restaurant industry. The sector is currently subjected to a 5% GST rate without the benefit of ITC, and if this can be certainly looked upon, it will be of great help.”
A boost to Hospitality with Focus on Tourism: Tourism is one of the fastest growing industries in our country with great potential for further growth. Budget 2020 brings quite a few favorable announcements like 100 new airports by 2024, Tejas trains for iconic destinations, museum restorations etc. which would definitely have a positive impact on the industry. “Interweaved in the vision of cultural development, economic development and ease of life, the annual budget 2020 is reassuring for the hospitality as well as tourism industry,” said Zubin Saxena, MD and VP Operations, South Asia, Radisson Hotel Group.
Disposable Income May Increase: Budget 2020 was more focused on development. Government has allocated additional funds for the promotion of tourism and transport services - like airport, railways, highway sectors. This will boost the travel and hospitality industry and will generate employment, connectivity and will result in inbound traffic to India. “Due to the proposed tax slabs, there will be an increase in the disposable income which will channelize further economic growth. We are hoping that the economic situation will improve in the near future and will be beneficial to the hospitality industry,” said Rohit Malhotra, CEO at Jay Jay Capital and Investment Pvt Ltd on hospitality.
Concession in Corporate Tax: There has definitely been an increase in the budget allocation for the Tourism and Hospitality industry, from 1416 cr in FY 19 to 2500 cr this fiscal year, but since this is one of the fastest growing industry, there could have been a better announcement. “Some positive changes have also been announced such as concession in corporate tax rate, which will be beneficial, help us to remain competitive in the market and also help create maximum employment. A proper budget has also been set aside for food processing sector, which will boost the rural economy,” added Arjun Raj Kher, Brand Head of Hitchki and Bayroute.
Generating Employment: ''The Government's focus on development is clear and reinforced with the allocation of additional funds to the Airport, Railway and the Highway sectors. This will boost business and leisure travel thereby generating employment, connectivity and overall economic development of catchment areas. With digitisation and infusion of positive funds in the economy, we look forward to rubber hitting the road in the days to come,” added Gaurav Dewan, COO and Business Head, Travel Food Services.
Putting Money in People’s Pocket: "The second union budget has been very helpful, it is something that the entire QSR and hospitality sector has been waiting for. This budget puts the money where it belongs - in the people’s pocket,” added Tarak Bhattacharya, Executive Director - Himesh Foods [Mad over Donuts].
Focus on Infrastructure Development: “Overall the budget looks like concentrating more on Infrastructure and Agriculture development which can directly increase the Purchasing Power and thus demand can be increased. This can help the Food and FMCG industries to increase demand and there by a higher sale,” shared Aji Nair, COO, Mirah Hospitality [Khandani Rajdhani, Rasovara]. However the industry expected some relief in the form of Input Tax Credit as Taxes in Project purchases, Services and Rent forms a major expense in food business and hope this request will be considered in the days to come.
No Announcement on Input Tax Credit: It appears that in an attempt to simplify the tax structure by doing away with exemptions while lowering tax rates, the government may have ended up actually complicating taxation for individuals by offering tax payers a choice between the old system and the new one. Not taking away LTCG and taxing dividends in the hands of recipients are negatives in my opinion. “For the restaurant industry, the much awaited and logical step of allowing input gst credit has not been considered despite it burdening an industry that employs millions but is struggling with high costs and low profitability/ returns on investment,” pointed Annie Bafna, Owner, The Nutcracker.
Setting up Investment Clearance Cell: “The Union Budget has some welcome announcements for start-ups and the economy at large. The setting up of an Investment Clearance Cell for entrepreneurs (which will also offer funding assistance), deferring the ESOP tax burden on employees for five years (or until they exit the company if this occurs earlier), the abolishing of audits for small companies with an annual turnover of INR 5 crores are all steps that will create an enabling environment for start-ups.
A Boost to Nutritional Programmes: “The digital refund of duties to exporters is another good move. The robust allocations for agriculture, infrastructure development, nutrition programmes and other segments could also help boost jobs creation. Nonetheless, the bottom line will vest on how well these programmes are implemented,” shared Aakash Vaghela, Founder & Managing Director , AV Organics LLP.
The consumption pattern in India is changing in last few years and the country is looking for a consumption-driven boost since ages. But the much-awaited budget of the Narendra Modi led government after its second stint brought disappointment for the restaurant as well as FMCG sector. Though, the industry expected subsidy for F&B industry where the government should have a look at the restaurants business where current GST rate of five percent does not allow restaurants to claim input tax credit (ITC) against taxes they pay on expenses such as rent and raw materials.
The sector also demanded a policy to reduce food wastage where the industry should move into adoption of frozen food to reduce food wastage and to preserve nutrition. Frozen food ensures lower food wastage as well as preserves nutrition with modern IQF technology. Our government should encourage the restaurant industry to ensure zero food wastage or even a scheme like Swachh Bharat Mission may be rolled out with 'zero food wastage pledge.’
"The Government, in this Budget, has kept "Gaon, Garib and Kisan" at the center of everything. Since we deal with agriculturally produced tea, which is a labor-intensive industry and one of the biggest employment generators in our country, such an approach will go a long way in helping the huge labor force working in the tea plantations based in remote locations across the country. Multiple initiatives have been proposed in this budget to double the farmers' income through various initiatives such as the creation of 10,000 new Farmer Producer organizations to ensure economies of scale for farmers over the next 5 years. Innovative pilots of “Zero Budget Farming” are to be replicated across the country for doubling farmers income and dairying through co-operatives are to be encouraged by creating infrastructure for milk procurement, processing and marketing. Such initiatives, if implemented will lead to the strengthening of the rural economy which in turn will result in the overall growth of the country. The new budget also was focused on encouraging ease of business for startups as the finance minister proposed easing the angel tax for startups. This coupled with a vibrant “Stand Up India” scheme will provide a boost to the start-up ecosystem in the country. Further, start-ups won’t be required to undergo scrutiny from the Income Tax department with a 2% interest subvention for a GST-registered MSME on fresh or incremental loans. There is a proposal also for a dedicated television channel for start-ups. A new payment platform for MSMEs is to be created with a plan to extend pension benefits to retail traders with an annual turnover less than Rs 1.5 crore. Overall it is a non-populist holistic budget keeping '5 Trillion Dollar Economy in next 5 years' in mind,” shared Kausshal Dugar, Founder, Teabox.
“Startups in India have faced the challenge of angel tax over the past year, and government’s announcements of alleviating the stress of IT scrutiny is a welcome step,” pointed Kabir Jeet Singh, Founder & Chief Executive Officer, Burger Singh by adding that India has the potential to become global startup hub, and we still have a long way to go in making this a reality. “The government should also consider easy availability of capital and government grants for the industry, along with an extended tax holiday,” he added.
Chef Ananya Banerjee says, "Under the Goods and Service Tax, the hospitality sector stands to reap the benefits of standardized and uniform tax rates, and easy and better utilization of input tax credit. As the final cost to end user decreases, we can expect the industry to attract more overseas tourists than before".
Commenting on the same, Pankaj Gupta from Taftoon said, “The budget 2019 is a great attempt by the government to bridge the rural-urban divide. Incentivising farmers through minimum support price, investing in farmer related schemes, creating a better distribution network will definitely boost the agrarian industry leading to better & diversified produce.”
Commenting on the budget Saurabh Mehta, Owner at Mallacca Restaurant, Gurugramsaid, “The Budget is for farmers and rural India, startups and MSME are on central focus of the Budget 2019. He highlighted the key points, thus, there is good scope for farmers producer organisations; measures to allow farmers to benefit from eNAM; focus on zero budget farming - a new concept; ASPIRE, which will be good for food processing industry based on agriculture; Make in India with stress on MSMEs; and focus on availability of safe and adequate food.”
Analyzing the Budget, Nitish Bansal, Owner at Judge and Jury Café and Bar, Delhi said, as expected, the Budget did not disappoint, rather the budget seemed holistic and aspirational that aimed to deliver economic growth. To being with the rural economy, the Budget announced modernisation schemes and focused on agricultural aggregation through setting up 10,000 new Farmer Producer Organisations. Setting up livelihood business incubators and technology business incubators to develop 75,000 agri-entrepreneurs is also a move in the right direction."
Union Finance Minister Nirmala Sitharaman, in her maiden budget on Friday, July 5, 2019, said the government will increase its focus on agriculture infrastructure will be the biggest move. "Zero budget farming will help double the farming income in days to come. This is also an attempt to make small-scale farming a viable vocation. Also, she stated about Jal Shakti, which I believe is the prudent step towards development and will surely manage water crisis and bring comprehensive development," said Vaibhav Arora, the owner at Pub Ji Café, Delhi.
The much hyped interim budget of the Narendra Modi’s government ahead of the Lok Sabha elections remain biased with restaurant industry getting lesser in its kitty. Restaurant industry is worth Rs 3,52,000 crore, and is expected to grow to Rs 5,52,000 crore by 2022, generating over 6 million jobs. Single window clearance for the Indian cinema sector has manifested ease of doing business. Still, restaurants have been awaiting relief from the 15 odd licenses needed to serve a sandwich.
“Government must recognize the increasing contribution by introduction of a uniform policy that includes single window clearance and reduction in no. of licenses for operating a restaurant,” shared Rahul Singh, President, NRAI (National Restaurant Association of India).
Though, the GST regime was brought in to achieve transparent transactions and ensure full compliance. But removal of ITC for the restaurant sector has brought in bad practices and unregulated transactions. “Discriminatory removal of ITC has taken away the “vatability” of GST, passing on the burden of cascading tax to the consumers; thereby striking at the very root of the regime,” added Singh.
On, the other hand, the industry accepted that the budget announced is consumption oriented will prompt spending across sectors and middle class consumers. “There is no denying that the spending power will increase with new tax benefits to the middle class customers and it will drive consumption at restaurants and food & beverages places but since there was still no mention on input tax credit, it is biggest loss for F&B,” pointed Nitish Jha, VP- Sales & Marketing, The Catering Inc, citing it as an average budget overall.
Commenting on the same, Singh said, “Much needed doles provided in the budget is surely a positive sign for the restaurant sector as it will drive consumption. However, the fundamental philosophy of GST remains lost in the regime which negates Input Tax Credit (ITC) on the premise of a lower output tax rate.”
Meanwhile, as more and more customers are getting health freaks, restaurants and food companies are also coming up with healthy alternatives to please their customers. And, for them this budget may seem a bright light as the government intends to focus on healthy and organic foods and farm products.
“The budget touched upon “healthy India” and “comprehensive wellness” and the F&B industry will have a major role to play in this regard. As a chef my menus always have seasonal produce sourced responsibly to give the guests healthy and “good for you” food options while making no compromises on Taste,” said Tarun Sibal, Director, One Fine Meal, adding that as a restaurateur and an entrepreneur he has always stated that food safety and hygiene is the answer and not a problem. “I welcome this budget focusing on Food and Food safety,” he further added.
Hence, we can say with focus on consumption, the budget remains a hollow budget for the restaurant industry with nothing to ease of doing business.
Union Budget 2017 was one of the much awaited budgets for all sectors in India. Hospitality & Tourism which has contributed a lot in the development of Indian economy was ignored in the budget allocation.
"We had very high expectations from this year's Union Budget for tourism and hospitality. Based on the Government's vision for tourism and our hopes were to receive the much needed reduction in taxes which would come into effect in the GST roll-out later this year. Also we had hoped that the government would grant infrastructure status to hotels with a project cost of INR 25 crore as against the present INR 250 crore. But there has been no mention on any of the critical aspects for promoting tourism," says Dilip Datwani, President, Hotel and Restaurant Association of Western India (HRAWI).
In last one year with growth in the hospitality and food sector we have seen that this has pushed the continuous growth of the economy being a major contributor in the GDP. It also came up in a research done by Trip Advisor that food tourism would be on rise in 2017 and further, but this move has brought a deep concern for the industry leaders. "Hospitality as the backbone of Tourism is a big contributor to the GDP, being one of the biggest employer and also is one of the biggest generators of Foreign Exchange to the country. It is very disheartening to know that the Union Budget has completely ignored Tourism and Hospitality," concludes Datwani.
Commenting on the same, Riyaaz Amlani, President- NRAI shares “While we were looking at some incentives for the Restaurant Industry, there are no specific announcements made by the Finance Minister.” According to the NRAI India Food Services Report 2016, the total Food Services Market today stands at INR 3,09,110 crores which is about 1.6x the size of Railways and about 8x the size of the Hotel industry; employs a total of 5.8 million people; and contributes a whopping INR 22,400 crores by way of taxes to the Indian economy. As per the NSDC, restaurants contribute the maximum manpower requirement within the hospitality sector. “For now, the restaurant industry will continue to suffer under heavy taxations and licensing with no on ground change in Ease of Doing Business,” adds Amlani.
However, the budget has given a 5 per cent reduction in tax slab of the middle class section who comes under Rs 2.5 to 5 lakh bracket which will help increase disposable income of the section. "For the hospitality industry the only take-away from the Union Budget 2017 is the 5 per cent tax reduction which is applicable for all MSMEs. Other than that, the Government has announced plans to establish five tourism zones in the next Financial Year with Special Purpose Vehicles (SPV) set-up. There is no clarity on what or where the Government plans to execute this project. Despite acknowledging Tourism's potential in creating a multiplier effect for the economy, the Finance Minister has not really marked out anything significant for its promotion," Points Kamlesh Barot, past President, HRAWI.
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