Tourism Development and Exchequer's Encouragment

Abstract

Despite the arguments against the development of tourism a large number of positive aspects can be noticed in favour of tourism development.  The data presented in this paper substantiates the need for development of tourism in India.  It is observed that the yields emanated from this sector percolate to every corner of the economy and society starting from advanced cities to hamlets. As a result it leads to balanced and inclusive growth.  To tap the latent potential of the tourism sector, it is necessary to make integrated efforts from all corners of the economy.  One such effort focussed in this paper, has been initiated by the Indian Tax System.  The system has designed various special provisions to motivate the sector, but they are scattered in various Acts.  The knowledge of these provisions facilitate a sound tax planning.  This paper makes an attempt to put important tax provisions, relating to different players in the tourism sector scattered in various tax laws, in one place to provide a basic understanding.  It concludes that the sops offered by the exchequer are inadequate looking at the needs of the industry.  This sector is a cash-cow.  Its yields outweigh the sops and efforts.  Hence, this sector needs focused attention from the policy makers.