Full Assessment of Tourism Industry in India


As elaborated by the 12th Plan document “Tourism industry in India has the potential to help achieving the goal of faster, more inclusive, and sustainable growth. In fact, it is being considered a powerful antidote to poverty. It eliminates the disadvantage of market inaccessibility suffered by the poor in respect of their goods and services by bringing the consumer to their door step. However, the potential can be fully realized only if the international competitiveness of the Indian tourism sector is improved significantly by eliminating both the supply and demand constraints.”

One of the positive aspects related to tourism is that it can create economic activity in fragile, remote areas with relatively poor infrastructure and generate employment amongst a wide spectrum of people with varying skill sets. This too has been mentioned in the 12th plan document in detail with facilities for skill development as an institutional level, and, it is in this regard that grants have been made available under the ‘Hunar Se Rozgar’ scheme and a robust roll out of this would be a boon to add incremental value of farm incomes.

According to the available statistics, tourism industry was the second largest foreign exchange earner for India. It contributed 6.6 percent of India’s GDP and created 39.5 million jobs in 2012. The total number of inbound tourists has grown at 16% during the past five years and is expected to grow at 12% by the next decade. In addition to this, according to another report by Deloitte Touche, the Indian tourism sector is likely to generate close to $ 50 billion by 2017. Despite the challenges faced by the country in terms of a slowing economy, sluggish demand and security concerns, the country was fighting back and tourism developments were taking place.

Further, the tourism sector is expected to perform well in future and it offers an interesting investment opportunity for long term investors. Also, the medical tourism has been poised for rapid development in the future and India is busy developing world class facilities for attracting this multibillion dollar niche market.

The way Ahead

If India does not take advantage of this tourism revolution, it will have only itself to blame. However, with just a few initiatives, India can reap out maximum benefits of this sunrise sector. One of the major area of concern is the lack of infrastructure which is visible in all segments of tourism be it related to airports, railway, surface transport, sustainable development norms etc. The tourism industry can be maximized by the infrastructure development, providing priority to tourism tax incentives to private sector, specialized norms for single window clearance for foreign investment, creating land, bank financial assistance mainly long term loan on low rate of interest, ensuring freedom from red tapism. Despite the high voltage official “Incredible India Campaign” the tourist arrivals are very less for India. The only way we can progress is improve infrastructure deficiency and till we become proactive in our approach, the tourist arrival will stagnate at 5 or 6 million only. The planners of the country will have to understand the fact that all the modes of attracting tourists will be meaningless if accessibility is not smooth. The sooner, the better. Roads and rails are not going to serve the tourists alone, Indian economy too will get a big boost if this is done. Countries like Thailand, Malaysia and Indonesia are spending heavily on developing tourism infrastructure for attracting more and more tourists. India on the other hand, is still setting its priorities right.