Newstrack

Budget disappoints FHRAI

EH Staff - Mumbai

The Federation of Hotel & Restaurant Associations of India (FHRAI) has expressed disappointment over the budget, especially since the proposal for the hotel industry to be included in the infrastructure list has been overlooked once again. The statement which contained comments of Vivek Nair, honorary secretary, FHRAI, and vice chairman & MD, The Leela Palaces, Hotels & Resorts, and Harish Sud, secretary general, FHRAI, said, "Given the huge shortage of hotel rooms existing in the country and the need to add at least 100,000 guest-rooms in the next 3 years, if the target of 10 million tourists by the year 2010 is to be achieved, the conferring of infrastructure status would have given the necessary fillip to the hotel industry."

It further pointed out that recently the Reserve Bank of India had discontinued granting permission to hotel companies availing of ECBs and FCCBs as they were not included in the infrastructure list. However, the statement said that the association welcomed the finance minister's proposal to extend a tax-holiday to 2-star, 3-star and 4-star hotels for 5 years that were being developed in areas which have UNESCO World Heritage sites, though the impact would be minimal in the macro perspective. "We estimate a maximum of about 30 hotels with about 3,000 guest-rooms would be built which would be able to avail of this benefit and thus this proposal would only cover 3 per cent of the total of 100,000 guest-rooms which are required to be made operational if the present demand-supply mismatch is to be mitigated," the statement said.