Budget 2026–27: A Strong Push for Tourism Growth and Infrastructure Development

KB Kachru

The Union Budget 2026–27 reflects a strong commitment to accelerating and sustaining economic growth, with a decisive push on infrastructure development—both critical drivers for the tourism sector. As tourism growth is closely linked to connectivity and infrastructure, this renewed focus is expected to significantly strengthen the industry.

The government’s emphasis on the services sector, along with the recognition of tourism’s potential to generate employment, increase foreign exchange earnings, and expand local economies, is particularly encouraging. These measures reinforce tourism’s role as a key pillar of India’s long-term economic strategy.

Skilling, Innovation, and New Tourism Initiatives

A key highlight of Budget 2026–27 is the focus on skill development and innovation within the tourism ecosystem. Initiatives such as the proposed National Institute of Hospitality aim to strengthen industry-aligned skilling, research, and leadership development.

Infrastructure expansion in Tier 2 and Tier 3 cities, along with projects like the East Coast Tourism Corridor and a renewed focus on medical-value tourism, are expected to improve hotel viability and diversify India’s tourism offerings. These initiatives will also enhance India’s global competitiveness as a tourism destination.

Additionally, the introduction of content-creator labs will help amplify India’s tourism narrative, while digital initiatives like the National Destination Digital Knowledge Grid highlight a forward-looking approach to tourism development through technology and data-driven insights.

Policy Gaps and the Need for Structural Reforms

Despite the positive momentum, certain long-standing demands of the tourism sector remain unaddressed. One of the key gaps is the absence of comprehensive infrastructure status for tourism, which limits access to affordable financing and investment.

To unlock the sector’s full potential, the following structural reforms are essential:

• Expanding infrastructure recognition beyond select destinations
• Placing tourism on the Concurrent List to improve Centre-state coordination
• Rationalising GST rates to enhance competitiveness

These reforms will act as critical enablers, amplifying the impact of current budget initiatives and ensuring sustainable, long-term growth.

The Road Ahead for India’s Tourism Sector

With the government’s clear commitment to tourism-led growth, the industry looks forward to active post-budget policy discussions, especially around promoting Brand India globally.

The sector remains aligned with the vision of expanding tourism’s contribution to 10% of India’s GDP by 2047—with the potential to achieve this milestone even earlier through collaborative efforts between government and industry stakeholders.

KB Kachru is President, Hotel Association of India (HAI) and Chairman – South Asia, Radisson Hotel Group