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Sahay to meet PM Thursday for tax reduction in tourism sector

New Delhi: Indian Tourism Minister Subodh Kant Sahay will meet Indian Prime Minister Manmohan Singh Thursday to seek his intervention in reducing taxes in the tourism sector.

Sahay along with senior officials including four secretaries from the Ministries of Finance, Civil Aviation, External Affairs and Surface Transport will meet Singh to ensure rationalisation of the tax structure for development of the tourism sector in a coordinated manner with the involvement of all ministries concerned.

"Currently the taxation on tourist packages is about 27 per cent which include luxury tax, services tax, road tax and air ticket tax in the country which is one of the highest in the world," said a senior Tourism Ministry official.

There is a constant demand for reduction of various taxes in the tourism sector as the higher tax structure is adversely affecting the industry, he said.

Sahay will also seek significant enhancement in fund allocation for the sector.

Besides senior officials, a delegation of stakeholders in tourism including hoteliers and tour operators will also accompany Sahay to seek the PM`s intervention to give a boost to the tourism industry in the country.

The Tourism Minister will make a presentation of a blueprint to bring all states on a common platform for the development of tourist destinations through public-private participation.

The official said Sahay will seek changes in policy relating to development of tourism infrastructure and will also emphasise on a competitive tax regime both at Central and state levels.

The travel and tourism sector had contributed 5.92 per cent towards the GDP and 9.24 per cent towards employment generation in 2007-08. It is estimated that there were 49.8 million tourism-related jobs in 2007-08.

A senior Indian Tourism Ministry official said the need of the hour is to attract more foreign tourists and to create more tourist destinations with active private participation.

In the last few years, the tourism sector has witnessed significant growth. Foreign tourist arrivals have reached 5.58 million in 2010 from 3.92 million in 2005.

Domestic tourist visits have also gone up to 650 million in 2009 from 392 million in 2005.

However, though the growth in tourism has been impressive, India`s share in total global tourist arrivals is quite insignificant.

While China had 5.80 per cent of the world`s tourism arrivals in 2009, India`s share was a modest 0.59 per cent.

Though India has tremendous potential for tourism development with its diverse natural and cultural richness providing the basis for a wide range of experience to the visitors, the major impediment in the sector is unhygienic conditions at tourist destinations, the official said.

"The Ministry plans to run various campaigns through state participation to maintain hygienic standards at tourist destinations," he said.

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