In a bid to put the flagging revenues of the national transporter back on track, finance minister Arun Jaitley recently announced a capital expenditure allocation of Rs 1.48 cr for the railways, the highest ever. However, no major new trains were announced and the focus was more on modernisation and passenger safety. The 92-year-old practice of a separate Railway budget was discontinued last year and was merged with the Union Budget.
Jaitley said redevelopment of 600 major railway stations had been taken up. All railway stations with more than 25,000 footfall would have escalators, CCTVs and Wi-Fi facilities set up. Moreover, a specialised railway university will come up at Vadodara, which will serve as the training centre for manpower required for high-speed railway projects. The Railway capex has been pegged at Rs 1.48 lakh cr , up from Rs 1.31 lakh cr last year.
The government has allocated Rs 11,000 crore to the Mumbai rail network and Rs 17,000 cr for the Bengaluru metro. Also, 150 km of additional suburban railway networks will be set up in Bengaluru at the cost of Rs 17,000 cr. The government will even eliminate 4267 unmanned rail crossing in broad gauge in two years.
In aviation, the Airport Authority of India (AAI) has 124 airports and it is proposed to increase the number by at least five times one billion trips a year. Moreover, Rs 60 cr has been allocated to kickstart the initiative. The UDAN Scheme will connect 64 unconnected airports across the country.
Apart from aviation, 99 cities have been selected for smart cities project with an outlay of Rs 2.04 trillion and 10 prominent tourist sites to be developed as iconic tourist spots. National Highways exceeding 9,000-km will be completed in 2018-19 and regional air connectivity scheme shall connect 56 unserved airports and 31 unserved helipads.
Sharat Dhall, COO (B2C), Yatra.com, said, “We are happy that the budget has laid great emphasis on infrastructure development to boost tourism. The continued focus on UDAN, railway infrastructure, building tourist corridors, enhancing connectivity by starting operations in 56 unserved airports reflects the government’s commitment to the tourism sector. Airport capacity enhancement will boost tourist flows and strengthen connectivity to a large extent. The creation of 10 prominent tourist sites will lead to an escalation in tourism and is very welcome. We were hopeful that the government would bring ATF under GST so as to reduce airline costs and keep fares low to ensure continued growth in Indian air travel market.”
Ajay K Bakaya, managing director, Sarovar Hotels & Resorts, said, “The positives in the budget are rail infrastructure, Bharatmala project, impetus to farmers, Heritage City Development, and healthcare. The move towards solar energy and operation green are welcome. However, Rs 60 cr to push airport capacity is too little and nothing concrete has been done to combat pollution. The lack of relief in taxes to companies with a turnover of below Rs 250 cr and taxing long term capital gains are also in the negatives.”
Simon Fiquet, general manager, Southeast Asia and India, Expedia, said, “The government has presented a budget that charts an all-inclusive development plan for sectors pegged to be future growth drivers for the country. The budget continued its strong focus on strengthening, expanding and upgrading the tourism infrastructure in India. In aviation – rounded development has been targeted – from increased regional connectivity and access through regional airports and expansion of UDAN scheme to Airports Authority of India bolstering a five times capacity expansion, to accommodate one billion trips a year. Railways and Roadways have seen a major outlay for expansion and upgradation, be it wi-fi for entertainment or setting up cctv cameras for better surveillance , ease of travel through modernisation of toll, use of disaster resilient infrastructure and safety first policy for security.
Additionally, the emphasis on the developing 10 tourism sites into iconic sites and enhancing tourist amenities at 110 Adarsh monument sites will not only contribute to more international footfalls but also hugely augment the domestic tourism revenue of the country, in the years to come. The expansion of Swachh Bharat Mission and launch of Operation Green will also build a clean and green India for attracting more tourists and delivering an international experience. The budget with a holistic development outlay, showcases the government’s strong commitment to build
India as a robust tourism economy.”
Harsh Jagnani, vice president and sector head corporate ratings, ICRA, commented on the budget, “The Budget has laid emphasis on developing the airport infrastructure in the country which is lagging the robust growth in air traffic (passenger traffic is expected to cross 300 mn passengers in FY2018 after having crossed 265 mn passengers in FY2017). Government’s plan to increase the capacity by five times is a positive development and is targeted to meet the future air traffic growth in the country.”
He added, “The budget has increased the planned capital outlay for the ministry of civil aviation to Rs 4,086 crore in FY2018-19 from Rs 2,543 crore in FY2017-18, which is in line with the government’s focus on development of infrastructure. AAI, the nodal authority for owing and managing airports, has been undertaking airport infrastructure up-gradation for last few years. Given the ambitious target of increasing capacity by five times, AAI is expected to play a greater role and increase the pace of infrastructure development. The budget proposal of leveraging AAI’s healthy balance sheet is expected to generate sizeable resources for AAI to undertake required capacity enhancement initiatives.”
Rakshit Desai, managing director, FCM Travel Solutions, Indian subsidiary of FCTG, Australia, said, “Introduction of several initiatives to improve infrastructure facilities in Union Budget 2018 bodes well for travel and tourism sector and will help reinforce India’s image as a tourist destination internationally. Significant investments to address concerns around connectivity with impetus on development of highways and arterial roads, railways and airport infrastructure is bound to push inbound arrivals. A dedicated focus to promote seaplane activities in the country, along with development of heritage sites and iconic tourist destinations will further enhance the appeal of India as a destination of choice. ‘Namami Gange’ will provide further fillip to religious tourism from both domestic and international travellers. Overall, it is a budget with a developmental agenda and could have benefited the tourism sector little more with announcements around simplified GST along with detailed FAQs for the travel industry.”