ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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INDIA CEMENTS-Keener Competition

INDIAN HOTELS Tourism Boom INDIAN HOTELS COMPANY'S Chairman, J R D Tata, has pleaded that the hotel industry should be recognised by government as an export industry and extended similar incentives and support as industries that manufacture and export goods enjoy. This, according to him, would enable the hotel industry to create facilities required to accommodate the expected additional inflow of foreign tourists in India. Last year saw an important breakthrough in the inflow of foreign visitors to India which at 10,80,000 exceeded one million mark for the first time with a corresponding record in foreign exchange earnings. The government's current estimate of the inflow of tourists by the end of the Seventh Plan in 1990 is 2.5 million. Tata estimates that about 45,000 rooms and allied hotel facilities needed to accommodate the additional 1.42 million visitors in a mixture of three, four and five star hotels will require an investment of about Rs 4,500 crore which will have to be sustained thereafter by continuing annual programmes of modernisation and renovation of old facilities. The hotel industry cannot be expected to raise such a substantial amount without some support and encouragement from the government at the centre and in the states. He has suggested that Section 80 HHC of the Income Tax Act of 1961 which allows companies engaged in the business of exports of goods or merchandise to deduct, for tax purposes from their income, 4 per cent of their export realisation and, in addition, 50 per cent of the profits, if any, made on export earnings in excess of the above 4 per cent deduction would be the obvious instrument for the hotel industry. Tata hopes that the 20 per cent rebate on interest on loans from financial institutions to five star and other approved hotels, where foreign exchange earnings exceed 50 per cent and 25 per cent respectively of their hotel earnings, will be extended not only to new hotels but also to existing hotels which have outstanding loans from financial institutions.

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