Hospitality seeks full infrastructure status, tourism on concurrent list ahead of Budget 2026

MUMBAI: As the Union Budget 2026 approaches, India’s hospitality sector is pushing for long-pending policy reforms, warning that the absence of full infrastructure status continues to limit growth despite the industry’s scale and job creation potential.

The sector currently supports 46.5 million jobs and is projected to employ nearly 64 million people by 2035, yet remains outside the formal infrastructure framework, according to Shwetank Singh, executive director at Chalet Hotels Limited.

In the 2025–26 Budget, the government extended infrastructure status to hotels in 50 select destinations, a move welcomed by the industry but seen as insufficient. Singh said the sector now needs comprehensive recognition across the board.

“Infrastructure classification unlocks soft financing, lower utility tariffs and rationalised property taxes,” Singh said, adding that such benefits are routinely available to capital-intensive sectors such as highways and ports, but not to hotels despite similar investment requirements.

The hospitality industry is also seeking structural reforms in tourism governance. Singh called for tourism to be brought under the concurrent list, arguing that fragmented policy making between the Centre and states has slowed destination development.

“Policy coordination between the Centre and states has long remained fragmented. Tourism, and by extension hospitality, requires constitutional alignment within shared legislative space to ensure seamless implementation across destinations,” he said.

According to Singh, such reforms would not only improve the traveller experience but also accelerate destination-led growth across emerging and non-metro markets.

Industry executives believe that clearer policy alignment and financial support could significantly boost the sector’s contribution to the economy. Singh said these measures would move India closer to the goal of a $1 trillion contribution to GDP from tourism and hospitality.

With demand rising and capacity expanding, the industry is hoping Budget 2026 will shift from selective incentives to systemic reform.