The Hindu : Business : Tourism sector disappointed

Online edition of India's National Newspaper
Wednesday, Mar 01, 2006

Business

Business

Tourism sector disappointed

Special Correspondent

NEW DELHI: Laying stress on development of tourist infrastructure and overseas campaign to project the image of India through fairs and festivals, the Union Budget for 2006-07 has proposed a hike from Rs. 786 crore to Rs. 830 crore to the Ministry of Tourism.

"Foreign tourist arrivals increased to 3.92 million in 2005. It is still a fraction of India's potential,'' Finance Minister P. Chidambaram said while presenting the budget here on Tuesday. Besides taking-up 15 tourist destinations and circuits for development, the government will identify 50 villages with core competency in handicrafts, handlooms, and culture, close to existing destinations and circuits, and develop them for enhancing tourists' experience. The allocation for development of tourist infrastructure has gone up from Rs. 415.75 crore to Rs. 422.50 crore. It will help the Tourism Ministry to meet the expenditure on creation of tourist bungalows, yatri niwas, forest lodges, wayside amenities, beach resorts, and refurbishment of monuments. The Ministry also plans to set up four new institutes of hotel management in Chhattisgarh, Haryana, Jharkhand and Uttaranchal.

Describing the budget for tourism industry as `disappointing', the Indian Association of Tour Operators (IATO) said that far from conceding the IATO's demand for 90 per cent abatement of service tax, the Finance Minister had increased the service tax from 10 per cent to 12 per cent.

In a statement, IATO President, Subhash Goyal, said in the case of the Fringe Benefit Tax (FBT) the Finance Minister had reduced it from 20 per cent to five per cent only on three items of `tour and travel'.

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