‘Union Budget,2014’
Analysis by Indian Convention Bureau
By this time, our ICPB members and other stakeholders have analyzed the
budget on the following line of thought:
1. Fulfills the expectations of the common man, mainly middle class
taxpayers and poor masses for the next 8 months.
2. Takes care of negative scenario prevalent in the industry due to
roadblocks in clearance of the projects (projects worth Rs. 1,67,000 crore
were pending due to policy paralysis)
3. Determines the roadmap for the next 5 years
4. Whether Prime Minister’s T for Tourism is embedded in the budget to
further promote MICE tourism
Overall Assessment
Overall assessment appears that the Finance Minister has taken a 360 degree
view of all categories of population. It gives much expected relief to all taxpayers
except super rich class. It addresses the issue of unemployment in a more
assertive manner through MSME sector (Rs. 10,000 crore), development of
infrastructure in sectors like Tourism, Manufacturing and Agriculture. The idea
of setting aside Rs. 7060 crores for 100 Smart cities, initiatives aimed at
developing airports, highways and ports and forceful announcement in the
energy reforms, disinvestment in public sector, allowing Foreign investments in
Defense and Insurance sector. There seems to be a pioneering step in
constituting Expenditure Management Commission to have a check on avoidable
expenditure. It may also lead to appropriate checks and balances in ‘subsidy’
concept which may, inter-alia bring corruption under control to some extent.
Creation of Infra Investment Trust and real estate Trust will provide long term
funds on a sustained basis to the cash starved infrastructure sector and will
address the deficit of thousands of crores in PPP projects.
Alas, FM should have taken more bold steps to address Labor reforms, more
Foreign investment beyond 50% in Defence and Insurance sector, ‘retrospective
taxation regime’ and bolder disinvestment in public sector. India is a highest
importer of Defence equipment to the extent of 15% followed by Pakistan and
China at 5% or so. Therefore, it would have been a boon to attract Foreign
investment, an urgent need of the hour. Perhaps, these bold steps were not taken
due to the fear that other parties may blame the government to favour select
corporate honchos. From Business tourism point of view, there is more need to
encourage the number of conventions and conferences being held in India as it
will bring more foreign exchange and will build image of ‘Incredible’ India to
‘Credible’ India. We expected a few more projects of creation of convention halls
than only one addition at Goa.
It cannot be denied that this government has taken a leaf from the previous
government in addressing the GST but there seems to be firm determination to
address the issues of the states for revenue distribution and also to prompt
states to follow suit. If implemented properly, GST will give welcome relief to
many sectors particularly Tourism sector.
Tourism and Hospitality sector assumes greater priority in the budget as steps to
develop smart cities, set aside substantial budget of Rs. 2037 crore to clean up
Ganga river, encourage Skill development and vision in spending Rs. 100 crore
each for approximately 28 areas for Feasibility study. The outcome of such
feasible studies will open floodgates of right kind of education, skill
development, infrastructure and other ambitious projects.
The budget is a manifestation of optimism of youth and shall alleviate the issue
of unemployment through Easing FDI norms and allowing Investment in various
sectors particularly construction (roads, airports etc.), Tourism, Hospitality,
MSME sector etc which will be a boon in creation of jobs
Keeping in view that every investment of Rs. 10 lakh creates 78 and 45 jobs in
Tourism and Manufacturing sectors respectively, one can feel elated that an
investment of Rs. 10,000 crore each in Tourism and Manufacturing sector will
create minimum 12.3 million jobs in the next 8 months as the table shows
below:
Sector
No. of jobs
projected
Amount of
money
investment
Breakup of
money invested
Direct and indirect
investment in
Tourism sector
7.8 million jobs
Rs. 10,000 crores
100 smart cities
@Rs. 7060 crores
Tourist circuits
@Rs. 500 crores
ASI @Rs. 200 crore
Ganga cleaning
@Rs. 2500 crore
Manufacturing
sector
4.5 million jobs
Rs. 10,000 crores
MSME sector
Road projects
17 million jobs
Rs. 37,880 crore
NHAI/state road
projects
30 million jobs
Rs. 57, 880 crore
Thus, we can expect creation of minimum 30 million jobs in the budget year.
We hope that the present overall growth rate of 4% will steadily but definitely
reach the level of at least 8% in the next 4 years. Three Cheers from India
Convention Bureau to the new Government.
G.G. Saxena
Executive Director, ICPB