In a move that would bring cheers to the tourism industry, the government finally plans to bring the hospitality and tourism sectors under the definition of infrastructure. The proposal came up at a high-level meeting called by the prime minister’s office to discuss inter-ministerial issues associated with the infrastructure sector and analysis of the target completion in various areas.

As per a report in Business Standard by Santosh Tiwari, a number of recommendations had come for the inclusion of hospitality and tourism under infrastructure and considering the potential of growth in these two sectors, the proposal was now slated to be discussed at various levels before a final decision.

The government has recently notified 25 areas as infrastructure across transport, energy, drinking water and sanitation, irrigation, communication and storage — setting right a policy anomaly that gave incentives to the core sector but never defined it. The sectors will be eligible for tax incentives, viability gap funding and will be covered by a regulatory framework for the infrastructure sector including levy of user charges.

At present, the areas constituting infrastructure takes into consideration different criteria including legacy assets such as roads and railways, high sunk costs, public goods nature, non-tradability of output and risk-prone nature. The inclusion of hospitality and tourism under infrastructure will help these two sectors in generating funds for projects.