HOPEFUL SIGNS
IN A VITAL SECTOR
Rabindra
Seth*
Tourism was originally
conceived as an earner of foreign exchange to support balance
of payments and to promote international understanding. Today,
it is reckoned as a major instrument of socio-economic development.
For developing countries it offers a reliable route to job creation
in a faster and less expensive way, advancement of deprived sections
of society, especially the youth and women, and in fact, a sure
way of removing poverty. For a country of India’s continental
size, a billion strong population, diversity of languages, culture,
cuisine and heritage, tourism has assumed a special role in national
integration and conservation of its natural and man-made assets
of fauna, flora, arts, crafts, architecture, customs and traditions.
This has now been universally brought under the umbrella of environmental
regeneration. Sustainable tourism development is thus the buzz
word. It is another matter that tourism, which in the
rest of the world has emerged as the largest and the fastest growing
industry, "failed to receive due importance on India’s development
agenda" as the Planning Commission put it in its mid-term
appraisal of the Ninth Plan. The result: India has been left far
behind in its quest for tourism compared both to the developed
western world as well as our Asian neighbours.
Status
According to
figures released by the World Tourism Organisation (WTO), a United
Nations affiliate, the number of tourists who crossed international
frontiers during 2002 exceeded 715 million. Of them only 2.4 million
came to India while some 80 million went to France, the world’s
number one destination, followed by more than 50 million each
to the US and Spain. China with its 37 million arrivals now occupies
the fifth place among the top destinations. Even smaller countries
like Malaysia and Thailand have crossed the 10 million mark in
the visitor count. India’s 0.38 per cent share of the world market
has remained stagnant for decades. It needs, however, to be pointed
out that in spite of the miniscule market share there are a few
significant factors of the Indian scene. First, even with being
at the bottom of the world tourism ladder, the sector is earning
for the country the equivalent of Rs. 13,000 crore in foreign
exchange with only six or seven per cent outgo. Secondly, tourism
is the third largest earner of foreign exchange after handicrafts
and gems and jewellery in gross terms and the second largest after
handicrafts in net terms. Thirdly, the average stay of a tourist
in India is estimated at 30 days, among the highest in the world.
Constraints
To come
back to the country’s performance in the global context. Where
did we go wrong? For an answer one has to take a long look back.
For decades tourism was perceived as an elitist activity, especially
by the socialism-inspired class. Even where the awareness of tourism’s
potential for employment was high they shied away from supporting
it in public for fear of being branded ‘anti-poor’. "How
can we have islands of affluence (star hotels) in the midst of
poverty" was their common refrain. Small wonder tourism never
made it to the national agenda; at best it was tolerated.
The federal nature
of our Constitution and segments constituting tourism spilling
into both the Central and State Lists ( and not finding a place
in the Concurrent List either) also came in the way of a coordinated
effort: aviation and railways are a central subject while road
transport comes within the purview of the States as do hotels.
Monuments are a national responsibility but law and order in their
environs is cared for by the States. The Planning Commission also
could not help tourism’s growth. Plan after plan it persisted
in distinguishing between international and domestic the tourism,
reserving the international part to the Centre and the domestic
for the States. This, too, came in the way of the evolution of
a national approach to tourism as a whole.
While there has been
a separate Tourism Ministry in place since 1967 and a few initiatives
like the setting up of the India Tourism Development Corporation
(ITDC) as a catalyst for infrastructural growth and promotional
activities and opening up of beach and wildlife destinations,
poor funding and lack of political will never gave a push to the
sector. Plan allocations to tourism never crossed even one-fifth
of one per cent of the total outlay. The States were content with
replicating their own tourism development corporations and spending
even less than the Centre on infrastructure. Lack of unity in
the industry, a malaise that continues till today, came in the
way of a lobby for tourism. Until recently the media too did not
include it in its own priorities. Commendable recommendations
made by committees set up by the Government itself remained unimplemented.
It was in this era
of apathy towards tourism that success stories started wafting
in from our neighbourhood. China, which was on par with India
in 1978 when it decided to globalise its economy (both were hosting
750,000 tourists annually) had by mid-90s leap-frogged to 23 million
arrivals; tiny Singapore was welcoming 5 million visitors and
Indonesia, Thailand and Malaysia had crossed the 7 million mark.
Interestingly, the first signs of awakening to tourism’s potential
came in the run up to the 1996 general elections when the undaunted
travel industry leaders were able to persuade the Bharatiya Janata
Party (BJP) to include a reference to the sector in its election
manifesto, a lead later followed by other parties. This, then,
was the beginning of a process which has culminated in the Tenth
Five Year Plan with a huge chapter on tourism, giving the sector
a place on the national agenda, a five times higher allocation
than the Ninth Plan and a target of raising India’s market share
to at least 0.62 per cent by the end of 2007. Translated into
arrivals if the target is achieved, it would mean 5.6 million
overseas visitors, more than twice as much as the current count
but still a long way behind our neighbours and other successful
destinations.
Interestingly,
it is the Planning Commission itself, which as a part of the Government,
took the first step towards salvaging tourism from the painfully
slow growth it had been left to. In the mid-term appraisal it
conceded that tourism had not been given its due. The Commission’s
diagnosis of what ailed Indian tourism is pretty close to what
experts, trade bodies and even officially appointed committees
have said all along. In the Commission’s own words, "Major
causes cited for the low performance are lack of professionalism,
unhygienic conditions, poor infrastructure, lack of easily accessible
information, lack of safety, poor visitor experience, restrictive
air transport policy, inadequate facilitation services, multiplicity
of taxes and the low priority accorded to tourism".
The Commission’s
recipe for corrective measures is also close to the industry’s
thinking: augmentation of international air seat capacity; introduction
of visa-less/visa-on-arrival, rationalisation/reduction of taxes
and impetus to rural tourism by linking village tourism with restoration
of heritage properties.
Potential
Around the same
time, the World Travel and Tourism Council (WTTC), a global think
tank of industry leaders, in a study presented to the Government
gave a new dimension to what it called the tourism imperative.
The WTTC has found that India has one of the fastest growing demands
for tourism services in the world. One of the major reasons for
this is a surge in domestic tourism, which has grown from 64 million
tourists to 176 million in the last decade. The latest figure
is 234 million. But the extent of the demand by itself does not
mean much, the study points out. This demand has to be matched
by adequate supply in terms of infrastructure, accommodation and
facilities. Thus, it warns that lack of supply will create grave
distortions, overcrowding of the existing facilities and increased
visitor exports out of India. Four million Indians go abroad against
2.4 million foreigners that come in.
Impetus
Although the
wake up call by the Planning Commission and the WTTC’s focus on
the burgeoning demand of domestic tourism services mark important
landmarks in the recent moves, Prime Minister Atal Bihari Vajpayee’s
reference to tourism in his Red Fort speech on August 15, 2001
stands out as the most significant. For, it was the first time
that the head of government spoke in favour of the sector from
a historic spot and on a historic occasion. The words he spoke
are worth recalling: "Tourism is a big source of employment
generation and foreign exchange earning. Indeed, it is the fastest
growing industry in the world today". These were not empty
words. There was sincerity behind them. This is clearly reflected
in the actions and the various initiatives that have since been
launched. A comprehensive National Tourism Policy is in place,
debated by a conference of state tourism ministers presided over
by the Prime Minister himself. The eleven- page chapter on tourism
in the Tenth Plan and Budget 2003 with its slew of reliefs and
massive funds for infrastructure have further strengthened faith
in the future of Indian tourism in spite of the lost time.
Approach
The Tenth Plan
focus on tourism has an interesting story behind it. In a rare
appearance for a Finance Minister, Shri Jaswant Singh spoke to
a CII-organised seminar on tourism and candidly conceded that
the elitist tag given to the sector in the days of socialist fervour
had prevented its growth. He promised that this distortion would
be corrected in the Tenth Plan in a separate chapter. So right
at the outset the chapter points out that the Tenth Plan approach
towards tourism "signifies a distinct shift from the earlier
plans" by recognising the "vast employment generating
potential of tourism and the role it can play in furthering the
socio-economic objectives of the Plan". Like the earlier
appraisal, it lists five main barriers to the growth of tourism
but perhaps in a more explicit way - absence of consensus on the
role of tourism, lack of priority on account of unappreciated
potential, relatively low levels of investment, lack of interest
on the part of the States, the primary player and an unprofessional
ad hoc approach. Hence, the Tenth Plan allocation of Rs. 2,900
crore is 0.72 per cent of the total outlay compared to 0.16 per
cent average of the earlier Plans. Apart from raising India’s
market share the Tenth Plan also hopes to create 3.6 million jobs
a year through tourism.
The 2003-04 Budget
too is an important landmark. Abolition of the hotel expenditure
tax is a major relief to the hospitality sector as is the extension
of sections 72A and 10 (23G) of the Income Tax Act to hotels.
But what is going to make a real difference is the outlay of an
additional Rs. 60,000 crore for such infrastructure which is the
lifeline of tourism – roads, railways, airports and seaports.
The Golden Quadrilateral linking the four metros and the East-West
and North-South corridors will considerably improve connectivity
as will privatisation of airports now under process. The development
of Mumbai and Kochi ports has special significance because of
the potential they will offer of promoting cruise tours to and
from India. Kochi already has plans to build a modern passenger
terminal along with a golf course and shopping malls on the marina.
The allocation in the Budget for two international standard convention
centres in public-private sector partnership is yet another initiative
to promote the lucrative conference and exhibition business. Since
the Government will take care of the viability of the convention
centres, it will spur the industry to put its weight behind the
projects.
Economic reforms
have already eased considerably two other hurdles in the way of
tourism – telecom and automobiles. Even quality coaches have begun
to be made in the country.
The only stumbling
block that would need a national effort is land for hotel and
other tourism projects. Archaic laws on land use and building
bye-laws and the clearances regime have made hotel building a
hazardous adventure. This is an issue which has to be addressed
at the central, state, civic and down to the panchayat levels.
The sooner an effort is made the better. Even to be able to host
5 million foreign tourists we need to double the present number
of rooms estimated at a little over 80,000. Going by the average
growth of rooms – about 3,500 annually – it may take us decades
to achieve that target. Incidentally, China has 900,000 rooms.
There have been
suggestions to restructure the tourism set up in a way that it
will be able to carry with it other segments like aviation, railways,
road transport, finance and even home and external affairs. The
WTTC has been urging that a cabinet committee on tourism under
the Prime Minister would be a good idea. Another view is that
the present arrangement of group of ministers (GoM) is more practical.
Whichever route is preferred, this will only smoothen matters
at the national level. About coordination with the States the
National Tourism Policy suggests that this be achieved by making
tourism a concurrent subject. In fact, a majority of the States
have already approved the idea though some of the larger States
have reservations. But a constitutional amendment of this kind
is bound to take a long time. The Tenth Plan has also addressed
this subject. It speaks of the imperative of the States, which
virtually control the tourism product, adopting a focused, highly
professional and result-oriented approach as well as the need
for a conducive environment for private sector investment. "It
is important to realise", it says, "that the travel
and tourism industry is adversely affected by the lack of synergy
in inter-sectoral policies". It adds that "a concerted
effort will be made through the National Development Council to
arrive at a consensus on the role of tourism in the development
agenda of the nation".
Fortuitously,
there are stirrings in the States too, albeit only in two or three
so far. Kerala is the most shining example where the State is
now effectively marketing itself globally as "God’s Own Country".
Large sums are being spent on infrastructure and promotions and,
more importantly, there is a growing public-private sector partnership
as exemplified in the two successful international travel marts
that have been held in Kochi.
Andhra Pradesh
is the other state where its Chief Minister, Shri Chandrababu
Naidu, has set an example not only of priority for tourism but
also being the highest in Government spending and lowest in taxes.
Rajasthan is now concerned about losing its premier position which
it had acquired for being the third point of the Golden Triangle
formed by Jaipur with Agra and Delhi. It is setting in motion
corrective measures. Goa has already emerged as India’s beach
holidays destination, equally popular with domestic travellers.
It augurs well for tourism that it has at its helm a man like
Shri Jagmohan, whose commitment to good governance is well known.
The clean-up of our great monuments like Ajanta and Ellora is
an excellent beginning not only for preserving our rich heritage
but also for enhancing visitor experience. Shri Jagmohan’s effort
need to be turned into a national movement and organisations like
INTACH, the Indian National Trust for Art and Cultural Heritage,
are willingly giving a helping hand. His team at the Department
of Tourism is led by India’s first lady tourism secretary, Smt
Rathi Vinay Jha, who brings with her valuable experience from
ITPO, the India Trade Promotion Organisation and NIFT, the National
Institute of Fashion Design. The Joint Secretary, Shri Amitabh
Kant, has moved from Kerala where he played a major role in creating
the God’s Own Country brand for the State. At the Centre he has
been working on building the Incredible India brand which has
just been launched through a Rs. 10 crore media campaign overseas.
Shri Jagmohan
and the Department of Tourism are concentrating on select tourist
hubs around which the future growth of infrastructure will take
place. Worldwide, tourism has faced huge challenges. There was
9/11, the Afghan war and then the Iraq war and now SARS. In India
we have had our own pressures of economic slow down, Gujarat and
tensions on the border. But, like in the rest of the world, we
too have faith in the resilience of tourism which has a habit
of bouncing back. Two lessons learnt from the recent events have
helped the Department and the industry to lay greater store on
domestic and intra-regional tourism. These will be the buzz words
for quite some time. Indian Tourism has finally taken its first
step on its long journey. (PIB Features)
*Travel
Writer
