FICCI calls for granting infrastructure status to hotel industry

According to a PTI report, the Federation of Indian Chambers of Commerce and Industry (FICCI) has called for granting infrastructure status to the hotel industry, aimed at boosting investments in the sector. As per the FICCI-Evalueserve study, the hospitality industry has been demanding infrastructure status, besides being exempted from paying tax on Foreign Exchange Earnings (FEEs) and tax holidays for new hotels as it will encourage re-investment of profits into the sector. The study added that India requires about 1.5 lakh hotel rooms over the next five years for which a huge investment is needed. Granting the status to the sector will also channelise investment flow in the tourism sector and help bridge the demand-supply gap.  

Besides, the study stated that there is also a need to accord export industry status to the hotel segment. The study mentioned that the tourism industry earned foreign exchange worth USD 11.7 billion in 2008 (calendar year), an increase of 9.5 per cent from the previous year. Given this quantum of earnings, the industry should be granted deductions on FEEs.