Budget 2022: GST on ropeways should be at par with Railways, says DRIL

The Covid-19 pandemic has wreaked havoc on the global economy, with travel and tourism being among the worst-affected sectors. While domestic travel in India is improving, it is still too early to declare a clear upward trend as Omnicron is making people stay home once again. Damodar Ropeways & Infra Limited (DRIL) has been manufacturing ropeways as well as doing Operation and Maintenance of the same for almost 50 years, with both passenger and material ropeways and steel bridges under its belt. Their ropeways include the one at Vaishno Devi connecting the devotees to Bhairon Nathji temple as well.

DRIL also operates the one of the world’s longest over-river ropeways in Guwahati, twin-section ropeways in Namchi, Sikkim, and another twin section ropeway in Jammu, One of the most beautiful ropeways in Pushkar, Rajasthan among others. So far, the company has over 13 passenger ropeways under its belt and many many material Ropeways too. Pre-Covid, DRIL carried about 4 million people annually, but that number has dropped dramatically during the lockdown.

In this Budget, the company expects the Government to introduce measures that will help to improve the potential of ropeways, boost tourism and enhance urban transport connectivity. GST on ropeways currently is at 18%, which is higher than that on air travel at 5% (economy) 12% (Business class), Railways (5%), Highway Tolls (0%). They along with other cable car and ropeways making / operating companies believe that they should be treated at least at par with Railways where the GST is 5% with input tax credit, because they cater to all sections of society. Even this tax reduction will go a long way in boosting the industry and making it more viable to operate Ropeways without having to raise ticket prices to offset the increases in all other input costs.

The ropeway projects are mostly situated in hilly areas, and the cross section of consumers availing the services comes from the average earning socio-economic class of people and a large % are villagers going on a pilgrimage.

For ease of doing business and fast-tracking new / proposed projects, especially for tourism or Urban transport systems, support from the government is needed. in streamlining the process of licensing, permits in construction of ropeway and cable car projects and even those under O&M. A centralized single window clearance system would be welcome and will give a major boost to the fast tracking of projects.

The Subsidies like those proposed for Varanasi project of 30 – 40% i-are a step in the right direction but more focus is needed to bolster this necessary industry. “We are witnessing that now a larger number of tenders are being floated, but the government is still focused on promoting CEN standards (European) for validating a ropeway project. Indian BIS standards have been upgraded recently and are very much at par with the CEN standards. Our recommendation to the authorities is to use the Indian BIS standards or at the least bring some kind of hybrid model for certification. Benefits of this hybrid model will go a long way, as it will significantly reduce the cost of the overall projects by at least 15% to 30% without any compromise on the standards of safety or quality. This will ultimately translate into faster RoI, more companies participating in the tenders and ultimately the pricing of tickets borne by the customers,” says Aditya Chamaria, MD, Damodar Ropeways & Infra Limited