In a significant development announced yesterday, the West Bengal state cabinet has officially endorsed a proposal to confer industry status upon the tourism sector. This decision represents a crucial milestone in the state’s economic trajectory. The move, following a notable surge in tourism during the Durga Puja festivities, is anticipated to have wide-ranging effects on the local economy and employment landscape. Industry stakeholders unanimously acknowledge that the decision will particularly benefit the hospitality sector, ushering in substantial growth.
Will it be beneficial if the West Bengal state declare industry status for tourism sector?
One of the key benefits of this move would be the boost it will provide to investment in the tourism sector. Attaining industry status not only facilitates smoother access to bank credit but also enhances the appeal for businesses to channel investments into projects related to tourism.
The Confederation of Indian Industry (CII) has also lauded the West Bengal government’s decision to confer industry status upon the hospitality sector. In an official statement provided to a news agency, CII noted that the hospitality sector holds the potential to draw investments worth INR 5,000 crore in the near future, creating nearly 200,000 job opportunities.
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“The tourism department had put forward a proposal to give the status of industry to the hospitality Sector, Which includes hotels and Other facilities, The cabinet today approved the proposal as it would help to draw investment in the sector that has a tremendous potential to generate jobs,” said a minister present in the cabinet meeting at Nabanna. Sources said the initiative ensure Several facilities for the hospitality Sector.
First benefit of industry status for tourism-
First, the hotels would be able to save a handsome amount on electricity bills as they would have to pay lower tariff as per the industrial rate. And not the much higher commercial rate. “Hotels can save up to Rs 3 per unit on electricity bills. This is huge as the hotels spend a considerable on bills. The second highest expenditure of a hotel after the outgo on employees’ salary is electricity bills.” a source said.
Second benefit of industry status for tourism-
Second, the hotels would have to pay electricity duty at a much reduced rate once the hospitality Sector gets industry Status, “The exact that be saved from the electricity duty cannot be calculated immediately. But the amount will be significant.” said another source.
Third benefit of industry status for tourism-
Third, the hotels will be able to save on water supply bills. Now, the hotels pay commercial rates for water Supply. When the hospitality Sector would get the status of industry, it would pay the industrial rate, which is lesser compared to the commercial rate.
Fourth benefit of industry status for tourism-
Fourth, the hospitality sector would have to pay lesser license fees and other taxes, including property tax. Sources said that once the hospitality Sector gets the Status Of industry, it would be entitled to a better FAR (floor-area ratio).
“FAR refers to the relationship between the areas on which the building is constructed and the building floor area that’s usable Or is allowed to be used, A better FAR means more construction or area be allowed on a particular land. Industrial constructions get the benefit of more construction on a particular land, This Will definitely attract investors to set up hotels and other infrastructure.” said a source.
“It will attract investments, and boost tourism, thereby stimulating economic activities and fostering the state’s development. This will significantly help in the growth of the hospitality industry and will bring in more investments in the state. We are committed to the development of our 250-luxury-room hotel in Kolkata for which work will commence in the next financial year,”
Past chairman of CII Eastern Region & managing director, Apeejay Surrendra Park Hotels Limited, Vijay Dewan
Sources in Nabanna said the government was exploring all possible Ways to generate more jobs ahead of the 2024 Lok Sabha polls since lack of jobs remains an Achilles Heel of the ruling party.
“Fresh investment in the hospitality sector can create huge employment opportunities as the state has a tremendous potential in tourism. The state government feels that if the benefit is extended to the hospitality sector. It can draw huge investments. – said a bureaucrat.
The tourism industry contributes around 13 per cent of Bengal’s GDP. Which is higher than the national average of 7.5 per Cent. According to data available with the Union Tourism Ministry, around 1.04 million tourist from abroad visited Bengal in 2022, while the number of domestic tourists to the state last year was 84.54 million.
“This move emphatically distinguishes the hospitality sector’s role as a vital industry contributing to the state’s economy, This (decision) will benefit the industry by way of more competitive industrial rates for power, water and property tax apart from providing better FAR (floor-area-ratio).”
K Mohanchandran, chairman, CII Eastern Region tourism subcommittee, and senior vice president (East & Northeast), Indian Hotels Company Ltd
More than 15 lakh people are employed in the state’s tourist sector, which is predicted to grow as a result of the hospitality sector being granted industry status. Bengal’s tourism services will also be further enhanced as a result of its potential to entice large hotel chains to increase the number of rooms they offer. The Himalayan Hospitality & Tourism Development Network, the highest body representing tourism stakeholders, has Samrat Sanyal as its general secretary, and she praised the decision’s potential to grow the industry.
