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The Hotel Association of India has asked the government to prioritise hospitality-focused reforms in the forthcoming Union Budget. The industry body has renewed its demand for infrastructure status for hotels, citing the sector's contribution to GDP, employment, and foreign exchange earnings. It has highlighted the need for easier financing, longer loan tenures, and lower interest rates, along with simplified approvals and clearances. The association has also recommended single-window clearances, restoration of forex-linked incentives, and higher depreciation benefits to strengthen investment and operational efficiency.
The Hotel Association of India has urged policymakers to focus on sector-specific reforms to support growth and long-term stability in the hospitality sector. The industry body has reiterated its long-standing demand for infrastructure status for hotels and the extension of industry-level benefits, stating that these measures are critical for sustaining investment momentum. Advertisement
Sharing expectations from the upcoming Union Budget, HAI President K B Kachru said the hotel sector continues to play a meaningful role in India's economic framework through its contribution to GDP, employment generation, and foreign exchange earnings. He stressed that this contribution needs to be formally recognised through targeted policy support.
Kachru, who also serves as Chairman for South Asia at Radisson Hotel Group, pointed out that granting infrastructure status to hotels would improve access to financing. According to him, a uniform infrastructure classification would allow easier availability of capital, longer loan repayment periods, and lower interest costs, which in turn would reduce project delays linked to funding challenges.
He further highlighted the need to simplify the regulatory environment for hotel development and operations. The industry continues to face multiple approvals, no-objection certificates, and clearances, many of which add to time and cost overruns. Reducing both the number and cost of these approvals would significantly improve the ease of doing business for hospitality developers and operators.
The association has also called for the introduction of a single-window clearance system for hotel projects, stating that such a mechanism requires urgent attention. In addition, it has recommended the reinstatement of incentive schemes linked to foreign exchange earnings and higher depreciation benefits for hotel assets, which were available to the sector in the past.
According to the industry, these steps would help unlock the sector's full potential to generate jobs and support India's broader economic and self-reliance goals.
Source PTI
FAQ
Q1. What has the Hotel Association of India (HAI) requested in the run-up to the Union Budget
The Hotel Association of India has urged the government to prioritise hospitality-focused reforms in the upcoming Union Budget. The industry has reiterated its demand for granting hotels infrastructure status, which would recognise the sector's significant contribution to GDP, employment, and foreign exchange earnings. HAI emphasized that targeted policy support is needed to sustain investment momentum and ensure long-term growth in the hospitality industry.
Q2. How would infrastructure status benefit the hotel sector
According to HAI, infrastructure status for hotels would improve access to financing, allowing developers to obtain loans more easily, with longer repayment periods and lower interest rates. This would reduce project delays caused by funding constraints, facilitate smoother project execution, and attract new investments into the sector. A uniform infrastructure classification would also bring the hospitality industry in line with other key sectors recognised for strategic economic growth.
Q3. What regulatory reforms has HAI recommended for hotel development and operations
HAI highlighted the need to simplify the regulatory environment by reducing the number and cost of approvals, no-objection certificates, and clearances that currently burden developers. The association stressed that a streamlined approach would enhance the ease of doing business, reduce time and cost overruns, and improve operational efficiency across hotel projects, thereby strengthening the sector's overall competitiveness.
Q4. What specific policy measures has the association proposed beyond regulatory simplification
The industry has called for a single-window clearance system for hotel projects to expedite approvals and reduce bureaucratic delays. Additionally, HAI has recommended restoring foreign exchange-linked incentive schemes and introducing higher depreciation benefits for hotel assets. These measures are intended to support investment decisions, encourage expansion, and improve financial viability for both new and existing hotels.
Q5. Why does the hotel industry consider these reforms critical for India's economy
The hotel sector contributes significantly to India's GDP, generates substantial employment, and earns foreign exchange. By implementing the proposed reforms, including infrastructure status, easier financing, simplified clearances, and fiscal incentives, the industry can unlock its full potential, create more jobs, and support India's broader economic growth and self-reliance goals. The reforms are seen as essential for maintaining the sector's competitiveness in the global tourism and hospitality landscape.
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