Budget 2022 Expectations: Policy interventions are critical for the hospitality sector’s survival

Hence the Union Budget of 2022-23 will be a defining factor, as to what the Indian government's approach will be to deal with the economic challenges that lie ahead and amid this ongoing 3rd wave of the Covid pandemic.

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Budget 2022 Expectations: Policy interventions are critical for the hospitality sector's survival

Nirmala Sitharaman, India’s Finance Minister, is expected to present the Budget for the current fiscal year on February 1st, 2022. Developing Health Infrastructure, Physical and Financial Capital, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D were some of the key areas on which the Government of India placed a strong emphasis in the previous year’s Budget.

Amidst the surge in the cases of the Omicron virus in the year 2022, the question of the economic strain and most importantly, economic recovery remains to be an issue of immediate concern. Hence the Union Budget of 2022-23 will be a defining factor, as to what the Indian government’s approach will be to deal with the economic challenges that lie ahead and amid this ongoing 3rd wave of the Covid pandemic.

Also Read: Budget 2022: assist e-learning start-ups to be certainly a part of educational governing bodies

To ponder upon the key expectations of the market researchers, market watchers, and investors from the budget of 2022-23, The Policy Times brings to you a detailed sector-wise analysis of the upcoming budget.

General Expectations

Experts remark that the Budget of 2022 is no longer going to be a red-letter event. Rather they say that it is going to be a restatement of India’s current financial state. At a time when the overhang of Covid fuels the existing challenges of Inflation, Supply chain disruption, Semiconductor shortage, etc the analysts believe that a 5–10-year roadmap for asset monetization can go a long way to meet up the budget revenue targets. They also suggest the widening of the Non-Tax revenue stream, enhancement of fiscal prudence and divestment would ensure accelerated growth and equitable distribution of resources.

Some experts even go ahead and suggest that a push has to be provided to the Urban NREGA to boost the consumption levels in the economy. However, many others remain skeptical about it. Further, the creation of a multiplier effect in the economy is also felt like a critical need of the hour. Business and market professionals suggest that this could be done by providing tax concessions in the Automobile and Housing sector, for it specifically invites immediate long-term investments. Apart from this, it has been largely claimed and accepted that the government will have to continue providing aid and incentives to the sectors which are still searching for their bearings in the status quo.

Real Estate Sector- What to expect?

2021 was the ‘Year of Recovery,’ as demand increased between July and September. If the third wave of coronavirus virus does not hinder the recovery process, growth momentum is expected to remain unchanged in 2022.

Residential properties, ready-to-move-in homes, and luxury homes are expected to be in high demand, according to real estate developers. Other factors that will contribute to growth include new-age property websites that offer services such as a virtual tour of a property, digital payment integration, online rent agreements, online booking of packers and movers, property management, and so on. These factors are also aiding NRI investors.

It is believed that if state governments reduce stamp duty or circle rates, demand will increase. A low-interest rate on a home loan, an extended deadline for government housing projects, and making the entire buying process more convenient are a few other expectations that will lead to growth.

A GST waiver for properties that are under construction, and relaxation of interest rates for house loans, etc. is also something the market watchers are looking forward to.

Hospitality Sector – What to Expect

The hospitality sector has urged the government to announce more schemes to promote tourism in the upcoming Budget. The Hotel Association of India (HAI) stated in its pre-Budget memorandum that policy interventions are critical for the sector’s survival and an early and rapid return to normalcy. One of the major demands from the sector is also to grant hotels the status of ‘Infrastructure,’ as this will resolve a large number of issues that hotels and hospitality companies face.

This step will also aid in operational survival and encourage investment in the sector.

The HAI is one of its statements further clarified that the “Access to softer funding, longer loan repayment periods, and a resulting reduction in the gestation period will make hotel investments more appealing and sustainable. More hotels would result in more jobs and development.”

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Budget 2022 Expectations: Policy interventions are critical for the hospitality sector's survival
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Hence the Union Budget of 2022-23 will be a defining factor, as to what the Indian government's approach will be to deal with the economic challenges that lie ahead and amid this ongoing 3rd wave of the Covid pandemic.
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THE POLICY TIMES
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