§ t?p 10 sect?rs in india t? attract

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Last updated: June 15, 2019

§  Thet?urism and h?spitality industry in india has been witnessing a healthy gr?wthand acc?unts f?r7.5% ?f the GDP ?f the c?untry. Acc?rding t? a KPMG rep?rt, theh?spitality sect?r is expected t? gr?w at 16.1% CAGR and will reach Rs. 2,796th?usand cr?re in 2022.

With an increasing middle class and disp?sable inc?me,this sect?r has been witnessing a p?sitive gr?wth f?r a few years. The sect?r isa maj?r j?b pr?vider acr?ss the terms, directly as well as indirectly. it als?attracts the m?st FDi infl?w and is an imp?rtant net f?reign exchange earner f?rthe c?untry.

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The h?spitality sect?r is a maj?r c?ntribut?r t? the indirect taxrevenues at the State as well as the Central level, which includes revenues fr?mService Tax, VAT and Luxury Tax. 1§  Thet?urism and h?spitality sect?r is am?ng the t?p 10 sect?rs in india t? attractthe highest F?reign Direct investment (FDi). Acc?rding t? the data released byDepartment ?f industrial P?licy and Pr?m?ti?n (DiPP), the h?tel and t?urismsect?r attracted ar?und US$ 9.2 billi?n ?f FDi between April 2000 and March20162§  Theh?tel industry in india thrives largely due t? the gr?wth in t?urism andtravel. The Travel and T?urism industry c?nsists ?f multiple verticals which includeh?tels, airlines, and travel & t?ur c?mpanies. H?wever,this rep?rt f?cuses ?nly?n the H?spitality Sect?r. Due t? the increase in t?urism with rising f?reignand d?mestic t?urists, h?tel sect?r is b?und t? gr?w.

There is an emergence ?fbudget h?tels in india t? cater t? the maj?rity ?f the p?pulati?n wh? seek aff?rdablestay. internati?nal c?mpanies are als? increasingly l??king at setting up suchh?tels. imbalance in increase in t?urists b?th d?mestic and f?reign n?t beensupp?rted with equal number ?f r??ms is a latent s?urce ?f ?pp?rtunity f?r gr?wth.

§  Thegr?wth in the h?spitality sect?r and its c?ntributi?ns t? the GDP will c?ntinuet? be substantially higher than ?ther sect?rs ?f the ec?n?my ?n the back ?fhuge t?urism p?tential in the c?untry. H?wever, the h?spitality sect?r is ?ne ?fthe m?st heavily taxed industries and is saddled with multiple layers ?f taxsuch as VAT, service tax, luxury tax, etc. ranging fr?m 20 per cent – 30 percent. This multiple taxati?ns adds t? ?perati?nal c?sts and reduces pr?fitability.

While the ?perati?nalizati?n ?f the much awaited GST regime is expected t? rati?nalisethe taxati?n structure, bring a p?sitive ?utc?me with streamlined taxes,enhance ease ?f d?ing business and l?wer c?st f?r the c?nsumers, there is anurgent need f?r l?wering the tax levied, t? incentivize and attract m?re investmentst? the sect?r.§  Theh?spitality sect?r has the p?tential t? be the main driving f?rce behind the gr?wth?f the ec?n?my. it, h?wever, will be p?ssible ?nly with the right am?unt ?fsupp?rt and incentives fr?m the g?vernment in all categ?ries ?f h?tels and n?t ?nlylimited t? the luxury and ultra-luxury segment. i believe that the g?vernmentmust pr?vide its full supp?rt in incentivizing the sect?r and the ?verall taxati?n?n the h?spitality sect?r sh?uld be reduced t? stimulate its gr?wthand make india c?mpetitive against ?ther internati?nally ren?wned h?spitalitychains1 http://www.business2business.c?.in/article/821/The-C?ntributi?n-?f-H?spitality-industry-T?-Ec?n?my-Gr?wth2 https://www.equitymaster.c?m/research-it/sect?r-inf?/h?tels/H?tels-Sect?r-Analysis-Rep?rt.asp

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