The Federation of Hotel & Restaurant Associations of India (FHRAI) has put forward its expectations for the upcoming budget, aiming to reshape India's hospitality industry.

FHRAI is proposing that hotels with a project cost of Rs 10 crores and above should be granted infrastructure status nationwide, regardless of city population. This move seeks to remove regional biases and promote growth and accessibility across the hotel industry.

Granting infrastructure status, FHRAI argues, would revolutionize the sector by facilitating long-term loans at reasonable interest rates, thus accelerating its growth. The sector is also seeking additional stimulus packages and incentives from the government to help achieve its goal of welcoming 100 million international tourists by 2047. These incentives include a favorable GST regime and simplified business procedures in hospitality.

Pradeep Shetty, President of FHRAI, emphasized the importance of these reforms, stating that they are crucial for tapping into India's diverse potential and driving unprecedented growth in the hospitality sector.

FHRAI's pre-budget report highlights the complexity of approval processes and compliance in the hospitality sector, hindering its growth. The federation recommends simplifying these processes through measures such as a single-window clearance system, self-regulation, and merging of approvals and licenses.

Furthermore, FHRAI stresses the need to classify tourism, travel, and hospitality under the concurrent list to establish a common framework between the Centre and States. This, they argue, will streamline the development of tourism nationwide.

Tourism is a significant contributor to India's GDP, accounting for approximately 10%. FHRAI believes that by declaring tourism a priority sector and offering special incentives, India can harness its full potential for socio-economic development.

FHRAI also calls for a review and reduction of GST rates in the hospitality sector to enhance India's competitiveness globally. Specifically, they propose abolishing the 18% GST category for hotels above Rs 7500 and merging it with the more moderate 12% category.

As Finance Minister Nirmala Sitharaman prepares to present the interim budget on February 1, FHRAI's proposals highlight the sector's priorities ahead of the 2024 Lok Sabha polls.

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