Industry urges govt for tax sops, hotel tariff reduction for tourism

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New Delhi, Sept 7 (UNI) Blaming high room tariff for low tourist inflows into the city, PHD Chamber of Commerce and Industry today asked the government to increase the supply of land, relax the municipal and zone restrictions, provide single window and expeditious clearance as well as introduce investor-friendly policies relating to the hospitality sector.

''If we are to get a bigger slice of the global tourism pie, then there are some issues that need to be dealt with on a war footing and State governments have a significant role to play in taking corrective action,'' the Chamber said.

PHD said hotel tariff in the country is very high because municipal bodies auction land for building hotels, which makes it difficult for hoteliers to construct budget hotels.

Taxes, such as luxury tax at the state level, also increase the cost of hotel accommodation.

The Chamber said it is hopeful that the tax incentives given by the Central government to construct budget hotels would help in mitigating the demand-supply gap.

Quoting a recent study, it said north India has seen a drastic fall in share of tourist arrivals from 70 per cent in 1980 to 38 per cent in 2007.

As per 2007 statistics, northern region had 20,094, south 30,117, west 30,861 and east 5,867 hotel rooms available.

During the period 2004-06, the northern region recorded a share of 39 per cent, while south, comprising of four states of Andhra Pradesh, Tamil Nadu, Karnataka and Kerala account for 45 per cent of the overall tourist arrivals into the country.

Tourist arrivals to south India have been increasing at 14 per cent from 2004-07.

Andhra Pradesh had a share of 23 per cent of the total tourist traffic in India in 2006 and continues to hold the number one position during 2007.

Uttar Pradesh holds the second rank, while Tamil Nadu, Karnataka and Rajasthan fell to number three, four and five respectively.

It is estimated that all these factors make India more expensive by 25 to 30 per cent, as compared to other tourist destinations in the region.

The Chamber has also identified four strategies for future tourism planning, namely, public-private partnership in marketing and infrastructure development; cleaning and beautification drive for important tourism areas, developing innovative themes to promote tourism and an implementation plan within a fixed timeframe.

It is a matter of concern that since the seventh plan, many projects funded by the Ministry of Tourism are still under implementation and asset creation has not led to development of tourism since the State governments do not have resources to operate and manage these assets on a sustainable basis and hence the money spent has not been put to productive use, PHD said.

Also, projects, which have been identified till now, are not all of national importance, it added.

The Chamber has suggested that long-term perspective development plans be formulated with an effective monitoring mechanism, provide better connectivity and access to tourist destinations.

Product development is crucial through proper infrastructure before marketing of the destination, it said.

This should include roads, parking areas, amenities at the tourist site, availability of trained guides and souvenirs for taking home as memoirs.

Providing road links to all the places of tourist interest is an important pre-requisite. This involves the improvement of State Highways and District Roads. PWD and urban development department funds may be dovetailed with that of tourism.

Also, high-speed rail links should be introduced so as to reduce the passenger's surface transport time for commuting to and from the airports. Connectivity to the airport through railway lines is a must for the convenience of passengers.

UNI SBA SR VC1110

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