India’s tourism industry, virtually on par with the country's software industry at $117 billion, can grow four times to over $400 billion by 2022 with some investment in infrastructure and tweaking of tax laws, a finance ministry working paper has said.
“This sector is a goldmine of opportunity which has not really been tapped. If tapped well, it can lead to higher and inclusive growth,” the working paper authored by senior economist HAC Prasad said.
India’s share in world tourist inflows was 0.64 per cent in 2011 (ranked 38). In comparison, USA was pegged at 11.3 and China at 4.7 per cent respectively. But India’s share in world tourism expenditure is pitched relatively higher at 1.61 per cent (rank 17) implying that foreign tourists spend relatively more in India, the paper co-authored by R Sathish SalamShyamsunder Singh said.
The major issue that came in the way of pushing tourism sector in the country was multiplicity of taxes faced by the hospitality industry. According to the paper, state taxes like luxury tax, value added tax, licence fees on room rent, restaurants, banquets, bars besides service tax are levied separately on all these heads.
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