As Union Budget 2025 approaches, Rajesh Magow, Co-founder and Group CEO of MakeMyTrip, emphasizes the critical role of the travel and tourism sector in India’s economic fabric. Contributing over 9% to national employment and supporting 40 million jobs, a figure projected to surpass 62 million within the next decade, the sector is all set to play an important role in India’s growth story. “The sector’s role in driving economic inclusivity, empowering communities, and boosting economy at the grass root level makes it indispensable to the next chapter of India’s growth story,” said Rajesh Magow.
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Magow also highlighted that domestic tourism is witnessing unprecedented momentum, driven by a thriving middle class, increasing disposable incomes, and a growing penchant for experiential travel. Infrastructure investments in roads, railways, and airports have significantly enhanced connectivity, opening new destinations and redefining travel patterns, with long weekends becoming synonymous with exploration.
Rajesh Magow Shares Key Recommendations for Union Budget 2025
Magow called for targeted government measures to sustain and accelerate this growth: “Ahead of the Union Budget, we urge the government to bolster this growth with targeted measures. This includes granting the long-requested industry status, which will further encourage investment and development in the hospitality sector. Additionally, allowing GST credit for hotel construction and rationalizing GST rates will help reduce the overall cost of accommodation. These measures will further stimulate domestic tourism and positively impact inbound tourism. The industry would be delighted if the Honourable Finance Minister allocates resources for an international campaign under the Incredible India initiative,” he said.
He also accentuated: “The homestay sector is growing well in India, and this burgeoning sector needs support. The government’s clarification in the last budget, stating that any rental income earned by the owner of residential house property shall be treated as ‘Income from House Property’ instead of ‘Business Income,’ can adversely impact the growth of homestays. We request the Honourable Minister to review this point.”
He also advocates for revising mandatory state-wise GST registration to allow central office-based registration would ease administrative burdens and foster operational efficiency for Online Travel Agents (OTAs). “Besides, there are couple of other operational, and disparity related GST issues faced by Online Travel Agents (OTAs). Mandatory state-wise GST registration with a physical presence in every state is adding to the administrative costs and management overhead unnecessarily. Since the nature of OTAs business is online, if registration in different states can be allowed using their central head office address will help in streamlining operations, reduce costs, and improve efficiency. Moreover, this requirement will help put Indian OTAs on level playing field against international online players who are not bound by similar rules,” he states.
He has also urged the Indian Government to address GST disparities: “Similarly, there is an existing disparity in the GST charge for customers booking a non-AC bus through an online booking platform where customers are charged 5% GST, while direct bookings made with the bus operator there is no GST charge. This inconsistency undermines the objective of the Digital India initiative and is against the spirit of digital India,” he said
Magow also applauded the government’s existing investments, while adding that Union Budget 2025 is a unique opportunity to solidify India’s position as a global travel hub and propel the sector to unprecedented heights. With measures to enhance inclusivity, reduce operational bottlenecks, and foster innovation, the travel and tourism sector stands ready to be a cornerstone of India’s economic future. “The foundation is strong; it’s time to build the future,” Magow said, urging the government to seize this moment for transformative growth.