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INDUSTRY & SERVICES

TOURISM

Overview

Tourism has played a pivotal in social progress. It is also an important vehicle in widening socio-economic and cultural contacts. A wide array of interests-entertainment, sports, religion, culture, adventure, education, health and business-drives tourism. Tourist expenditure generates multiple effects with extensive outreach along its value chain. Adding to the demand for a variety of goods and services, tourism offers potential to exploit synergies across a large number of sectors such as agriculture, horticulture, poultry, handicrafts, transport, construction etc., where growth of income has favourable impact on poverty alleviation.

Tourism facilitates business contacts, widens markets and helps diffusion of growth impulses across territories to promote broad based employment and income generation. Investment in tourist infrastructure adds to economic growth, catalyses generation of income and employment, which in turn, leads to further growth in demand for tourism and stimulates subsequent rounds of investment in a virtuous circle.

Statistics of Growth

  • Travel and Tourism Competitiveness Report of 2009 from the World Economic Forum, has ranked India as 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's most attractive destinations.

  • Ranked 14th best tourist destination for its natural resources and 24th for its cultural resources, owing to many World Heritage sites, rich flora and fauna and strong creative industry.

  • In the 18th Session of the General Assembly of UN WTO in 2009, India was re-elected to the Executive Council of the United Nations World Tourism Organization for another four years term. India is a member of the Executive Council of UN WTO continuously for the last 19 years.

  • Foreign Tourist Arrivals during the period January-February 2010 were 10.92 lakh with a growth rate of 12.7%, as compared to the FTAs of 9.68 lakh and a negative growth rate of 13.8% during January-February 2009 over the corresponding period of 2008.

  • Foreign Exchange Earnings in US$ terms during the month of February 2010 were US$ 1434 million as compared to FEE of US$ 923 million during the month of February 2009 and US$ 1305 million in February 2008.The growth rate in FEE in US$ terms in February 2010 over February 2009 was 55.4% as compared to the growth of (-)29.3% in February 2009 over February 2008.

Investment Opportunities

  • Hotel industry
  • Service apartments
  • Adventure Tourism
  • Health Tourism
  • Convention centres
  • Wildlife Tourism
  • Highway Tourism
  • Amusement Parks

Infrastructure Development

  • Infrastructure Development holds the key to India’s sustained growth in the tourism sector. Therefore, the Ministry of Tourism has been making efforts to develop quality tourism infrastructure at tourist destinations and circuits. The Ministry of Tourism has sanctioned 94 projects for an amount of Rs.394.85 crore for infrastructure augmentation including rural tourism projects in the year 2009-10 (up to November 09).

  • The Ministry has launched a scheme for development of nationally and internationally important destinations and circuits through Mega Projects. To date 29 mega projects have already been identified and of these 21 projects have been sanctioned.In the current year, the Ministry has sanctioned mega projects in Madhya Pradesh at Chitrakooot, as Spiritual and Wellness Destination for an amount of Rs.2401.98 lakhs. The mega projects are a judicious mix of culture, heritage, spiritual and ecotourism in order to give tourists a holistic perspective.

  • Ministry of Tourism is also taking initiatives with other Central Govt. Ministries, such as Railways, Civil Aviation, Road Transport & Highways, Food Processing and Urban Development and also the concerned State Governments to achieve convergence and synergy with their programmes so that the impact of investment on these destinations is maximized.

Other initiatives

  • In the year 2009, Ministry of Tourism organised workshop on World Class Tourism Infrastructure and decided that the Ministry will meet the expenditure on the architect’s fee upto 2% of the project cost which could be included in the cost estimates.

  • Ministry of Tourism has issued the guidelines for facilitating construction of heliport as a component of destination development project in hilly / remote areas.

  • The Ministry of Tourism has decided to consider proposals for grant of financial assistance upto Rs.5 crore for construction of one convention centre at any well-connected and accessible tourist destination in each State/UT for promotion of Meetings, Incentives, Conventions and Exhibitions (MICE) Tourism.

  • The Caravan tourism policy announced by the Ministry of Tourism is aimed to promote and facilitate and incentivise development of

    • Caravan Parks in the public sector, private sector and PPP mode

    • Caravans in the public sector, private sector and PPP mode

    • Caravan Tourism can effectively meet the growing demand of accommodation while ensuring adherence to quality, standards and safety norms.

Sustainable Tourism

  • The true potential of tourism lies in adopting responsible and sustainable practices on both the demand and supply sides of the tourism chain, enabling an effective response to climate change. This is closely interlinked with inclusive growth through sustainable community participation.

  • This ‘sustainable’ tourism route has been adopted by the Ministry of Tourism in the innovative Rural Tourism Project, by strengthening the disadvantaged but skilled rural artisan communities through support to capacity building and vernacular infrastructure, while laying emphasis on the role of women.

  • In furtherance of these objectives and achievements, Ministry of Tourism in association with UNDP and key stakeholders in the tourism industry organised four regional conferences on Sustainable Tourism for Inclusive Growth at Shillong, Chennai, Bhopal and Cochin.

Hotel Infrastructure

  • The requirement of hotel accommodation in the country is estimated at 240 thousand rooms against availability of around 90 thousand rooms. It is estimated that there will be a requirement of additional 30,000 hotel rooms in Delhi. The Ministry of Tourism is therefore actively involved in monitoring the creation of additional accommodation for the games. Following initiatives have been taken for augmentation of accommodation infrastructure:

    • Reserve Bank of India (RBI) has de-linked credit for hotel projects from commercial real estate, thereby enabling hotel projects to avail credit at relaxed norms and reduced interest rates.

    • In addition, the External Commercial Borrowing (ECB) norms have been relaxed by Ministry of Finance to solve the problem of liquidity being faced by the hotel industry due to economic slow down.

Commonwealth Games 2010

  • The XIX Commonwealth Games are scheduled to be held in Delhi during 3rd to 14th October 2010. It is expected that around 100 thousand persons would be visiting during the Games.The following initiatives have been taken by the Ministry to use this opportunity and showcase India as a unique and hospitable tourism destination:

    • A Task Force constituted for this purpose monitors the additional new hotel accommodation coming up in the Delhi NCR by holding regular meetings with all concerned land owning authorities, concerned Ministries / Departments.

    • Governemnt has decided that Delhi Development Authority (DDA) flats located at Vasant Kunj and Jasola, New Delhi will be upgraded / furnished and operated by Indian Tourist Development Corporation (ITDC) for the Commonwealth Games as alternate accommodation of three star standards.

    • Government has also proposed to utilize the services of rooms available from the licensed guest houses and Bed & Breakfast units for the Games.

  • India Tourism Development Corporation

    • Hotel Ashok, Samrat and Janpath under the ITDC have been declared as the Official Hotels for the Games. While The Ashok & Samrat would be the Games Family Hotels, Janpath would be for Press and Media. These hotels have undergone a major renovation work to prepare them for the event.

  • Manpower & Volunteer Development

    • Providing more than 3000 volunteers, trained in hospitality sector, for the games under the “Earn While You Learn” scheme.

    • Training more than 3000 taxi/coach and auto rickshaw drivers with an objective of making them more tourists friendly.

    • Training of owners and service staff of the approved guests house in Delhi so that there is a quality improvement in the services being provided.

Quality Human Resource Development

  • It is estimated that to cater for the growing need of the hospitality sector, over 203 thousand hospitality trained manpower would be required annually, therefore, it has been the endeavour of the Ministry of Tourism to put in place a system of training and professional education with necessary infrastructural support, capable of generating manpower to meet the needs of the tourism and hospitality industry, both quantitatively and qualitatively.

  • Ministry of Tourism has decided to support additional Institutes of Hotel Management (IHM) in states. New Food Crafts Institutes (FCI) are also being set up. Ministry has also been providing financial assistance for modernization and capacity enhancement of IHMs and FCIs. A Scheme of Capacity Building for Service Providers is being implemented to impart hospitality training to those employed in this sector.

  • As a part of 100 days agenda of the Government, Ministry has taken following initiatives to provide skilled manpower in hospitality sector:

    • Skill training of youth in Hospitality sector (Hunar Se Rojgar Tak): The Institutes of Hotel Management (IHMs) have initiated a six to eight week fast track skill training programme for youth under twenty five years of age in food production and food and beverage services. About 5000 youths will be trained in the year.

    • Skill Certification: The service providers, who are working in the hospitality sector, would undertake a five day orientation programme followed by test that would be based on practical and viva voce. Thereafter, the participants would be provided a skill certificate, which will enhance their employability in the market. About 5000 existing service providers would be certified in the year.

International Cooperation

  • In the 18th Session of the General Assembly of UN WTO held in October 2009 in Astana, Kazakhstan, India was re-elected to the Executive Council of the United Nations World Tourism Organization for another four years term. India is a member of the Executive Council of UN WTO continuously for the last 19 years.

  • In the first Joint Working Group Meeting on Tourism between India and Indonesia in Yogyakarta, Indonesia held in August 2009, it was agreed to carry forward the cooperation.

  • A Joint Action Plan on Tourism Cooperation was signed between India and Singapore in August 2009 in New Delhi in the presence of the visiting senior Minister of State for Trade, Industry and Education, Republic of Singapore and the Minister of Tourism,Government of India.

  • A Joint Action Programme for the period 2009-10 for the implementation of the agreement between India and Russian Federation on Cooperation in Tourism was signed during the visit of the Russian President to India in December 2008.

Overseas Marketing and Promotion

  • Ministry of Tourism has consistently been working on a two-pronged strategy for marketing of 'Incredible India' brand. The strategy includes visible branding in the outdoor media such as advertising at airports, on trams, taxis and buses and through the print, online and electronic media, as well as through participation in Travel Marts and Road Shows. For promotion of Indian Cuisine, which is an integral component of the Indian Tourism product, support has been extended to Indian Food Festivals organized in various countries. The India tourism office in New York has supported Indian Food Festivals organized in Colombia, Ecuador, Argentina, Uruguay and Paraguay in S. America.

  • Work orders have been issued for launch of print media campaigns in America, APAC and Europe regions. Advertising Campaigns have also been undertaken by the India tourism offices overseas in their respective regions. Promotional activities have also been stepped up in the overseas markets with added focus on emerging markets, for generating greater awareness about India as a tourist destination and increasing India’s share in international tourist arrivals and receipts.

  • There has been an increased focus on potential and emerging markets in East/ South East Asia, and East European countries. Road Shows, in collaboration with the Indian Association of Tour Operators, have been organized in Japan and South Korea to promote the Visit India 2009 Scheme. India tourism, Frankfurt supported & participated in Road Shows organized in the Slovak Republic, Hungary, Croatia and Slovenia in June 2009.

  • A series of promotional initiatives were taken to minimize the negative impact of the global economic slowdown and terrorist attack in Mumbai, which had an adverse effect on tourism in the country. Some of them are as under:

    • An Incredible India Evening was organized in Beijing in April 2009. More than 600 persons representing a cross section of the Chinese media, travel trade, members of the diplomatic corps, and prominent members of the Indian community attended the function. A five day “Incredible India” Food Festival was also arranged to coincide with the India Evening.

    • The India tourism office in New York participated in a “Caribbean Conclave” organized in Port of Spain, Trinidad & Tobago in June 2009.

    • The India tourism Offices in New York, Frankfurt, Singapore, Beijing and Tokyo have participated in major travel fairs and exhibitions in South America, CIS, East European countries, East Asia and South East Asia, including Argentina, Brazil, Chile, Czech Republic, Hungary, Poland, Russia, Romania, Kazakhstan, Ukraine, Singapore, Malaysia, Indonesia, Thailand, China, S. Korea, etc.

    • Major promotional events were organised in Moscow and St. Petersburg in September 2009.

  • Visit India 2009

  • The initiatives taken to minimize the negative impact of the global economic slowdown included a “Visit India 2009” scheme launched in collaboration with all stakeholders including airlines, hotels, tour operators, State Governments for incentivising travel to India, organizing Road Shows in important tourist generating markets overseas, arranging familiarisation tours to India for international travel trade and media representatives to keep them updated on safety / security conditions in the country and media campaigns in the print, electronic, online and outdoor media.

Other Promotional Activities

  • The Ministry of Tourism, through the India tourism office in London undertook an advertising campaign in the print and outdoor media in London to coincide with the Queens Baton Relay for the Commonwealth Games 2010, which was flagged off from the Buckingham Palace on 29th October 2009.

  • The campaign included advertisements on hoardings, billboards, LED Screens, bus shelters, etc. at Heathrow airport and at prominent locations in London city as well as in leading dailies . Outdoor advertising was also undertaken on taxis in New York, Miami, Chicago, London, Edinburgh, Milan, Rome, Tokyo, on buses / cable cars in San Francisco, Seoul, Miami, Philadelphia, Chicago, Toronto, Johannesburg, Cape Town, Bahrain, Muscat, and on hoardings / billboards in Tokyo, Milan, New York, Toronto, Ottawa, Edmonton, Dubai, Nice Airport, Cannes, Singapore, etc.

  • “Incredible India” events were organized in Russia in September, 2009 as part of the celebrations of the “Year of India in Russia” and a major India promotion event “India Calling” organized in association with the National Geographic Society at Hollywood Bowl and California Plaza in Los Angeles in September 2009.

  • Joint Promotions have been organized by India tourism offices overseas in collaboration with Tour Operators / Airlines and Wholesalers, in Rome, Dubai, Sharjah, West Palm Beach & Naples in Florida, Madrid & Barcelona in Spain, Brugge in Belgium, Basel, Bern & Zurich in Switzerland and Singapore.

  • The Ministry of Tourism organized a series of Road Shows in collaboration with the Indian Association of Tour Operators, Adventure Tour Operators Association of India and the PATA India Chapter to project India as a tourist destination, in the aftermath of the global economic slowdown.

  • India tourism offices overseas have participated in approximately 104 Travel Fairs and Exhibitions in important tourist generating markets the world over as well as in emerging and potential markets to showcase and promote the tourism products of the country. These include the major international Travel Fairs such as the Arabian Travel Market (ATM) in Dubai, PATA Travel Mart in Hangzhou, China, ITB – Asia in Singapore Top Resa in Paris, and World Travel Market (WTM) in London.

  • Ministry continued to provide Hospitality to Journalists/ tour operators/ Travel agents/ TV teams/ Photographers etc. from overseas markets. Till now Ministry has offered hospitality to 700 guests (approx.).

  • Social Awareness Campaign

  • Ministry continued its efforts to reinforce its brand through Incredible India campaigns. Through, Social Awareness Campaigns attempt was made to sensitize the stakeholders and masses about the importance of tourism and protection of heritage sites. Through generic campaign in the first half of the current financial year, awareness about various destinations/sub-tourism products was generated. In the second half of the financial year, Ministry continued its efforts of creating social awareness through focused campaigns.

Recent Initiatives

Rural Tourism

Rural Tourism showcases the rural life, art, culture and heritage of India,at rural locations in villages and benefits the local community economically and socially. It enables interaction between tourists and local population for a mutually enriching experience, the Government of India has taken several steps to develop and promote rural tourism. The Ministry of Tourism has partnered with the United Nations Development Programme (UNDP) for Endogenous Rural Tourism as pilot projects for capacity building. Within prescribed limits, this Ministry funds the hardware projects and the funds for capacity building were provided by the UNDP through this Ministry The software component was implemented with the involvement of an NGO/Gram Panchayat identified by the UNDP in co-ordination with the District Collector and the local community. The Ministry also extends the scheme of Capacity Building for Service Providers (CBS) to other rural sites beyond those covered under partnership with the IJNDP.

The focal point for each site is the District Collector for ensuring convergence with other Yojanas and Schemes. The project implementation is monitored by the Project Standing Committee chaired by the Joint Secretary (Tourism). Field visits are conducted by the Ministry of Tourism-UNDP Teams.

To monitor the projects, the National Workshops and Regional Review Meetings have been held regularly where initiatives were taken to further strengthen the scheme which included home-stay with food, guide- training among the local youth, enhancing the role of women, linkage with tout operators and encouragement of the foreign students to stay with the rural host community, etc. In some sites, e.g Hodka, Pocharnpalli, Kumbhalangi, Karaikudi (Chettinad), Aranmula, Raghurajpur, tour operators are involving such communities within their groups.

UNDP has created a panel of architects to advise, guide and provide design inputs for site hardware work plan with sensitivity to the local environment using local skills, material and style. In many sites, the architects have been able to give new dimensions which are based on local skill, material and style

Medical Tourism

Medical Tourism is gaining momentum and the several initiatives have been taken by the Ministry to promote this segment. The Ministry of Tourism, Government of India participated at the International Tourism Bourse (1TB) at Berlin, where India was promoted as the new emerging healthcare destination. The Ministry also participated in New York Times Travel Show to promote Indian healthcare services and invite investment into India. Further, a new category of medical visa has been introduced which can be given for a specific purpose to foreign tourists coming to India for medical treatment.

Cruise Tourism

India, with its vast and beautiful coastline, virgin forests and undisturbed idyllic islands, long historical and cultural tradition of architecture, theatre and performing arts, is a high potential tourist destination for cruise tourists. The cruise tourism potential in the country should be assessed from the medium-term and long-term perspective with details of foreign and domestic stakeholders. Huge untapped potential lies in Cruise tourism in India such as Development of major terminals, Development of non-major ports, Rationalization of duty structure for import of vessels, Development of inland water cruise etc.

Adventure Tourism

Adventure tourism has immense potential for growth. For experiencing the different types of adventure tourism right like rock climbing, river rafting, para gliding, mountaineering and under water diving, the Ministry has been sanctioning projects in various States.

Wellness Tourism

India, as the world knows, is a Wellness destination. The potential of wellness systems, developed through centuries of wisdom of this ancient civilization would be fully tapped. This is being done by positioning India as a centre of Ayurveda, Yoga, Siddha, Naturopathy, etc. together with the spiritual philosophy that was integral to the Indian way of life. The Ministry of Tourism has highlighted wellness in a big way through publicity and promotional activities.

Tourism- Policies and Schemes

National Tourism Policy

In order to develop tourism in India in a systematic manner, position it as a major engine of economic growth and to harness its direct and multiplier effects for employment and poverty eradication in an environmentally sustainable manner, the National Tourism Policy was formulated in the year 2002. Broadly, the “Policy” attempts to:-

  • Position tourism as a major engine of economic growth;
  • Harness the direct and multiplier effects of tourism for employment generation, economic development and providing impetus to rural tourism;
  • Focus on domestic tourism as a major driver of tourism growth.
  • Position India as a global brand to take advantage of the burgeoning global travel trade and the vast untapped potential of India as a destination;
  • Acknowledges the critical role of private sector with government working as a pro-active facilitator and catalyst;
  • Create and develop integrated tourism circuits based on India’s unique civilization, heritage, and culture in partnership with States, private sector and other agencies; and
  • Ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched, spiritually elevated and “feel India from within”.

Full text of the policy

Scheme for Product/Infrastructure and Destination Development

The focus under this scheme is on improving the existing products and developing new tourism products to world class standards. For infrastructure and product development, the Ministry of Tourism has been providing Central Financial Assistance to the State Governments during the 9th Five Year Plan which resulted in strengthening of the infrastructure and product development in the country. The scheme has been restructured during the 10th Five Year Plan to meet the present day infrastructure requirements. The past experience had been that a large number of small projects had been funded under the Scheme, spreading the resources very thinly, which at times had not created the desired impact. The focus in the Tenth Plan has been to fund large projects of infrastructure or product development in an integrated manner.

Under the revised scheme, the destinations are carefully selected based on the tourism potential. Master planning of these destinations is undertaken so as to develop them in an integrated holistic manner. The master plan is suppose to tie up all backward and forward linkages, including environmental considerations. Realizing the importance of destination development, the total outlay for this sector has been increased substantially. Important tourist destinations in each State, in consultation with the State Governments, are taken up for development. This include activities ranging from preparation of master plans to implementation of the master plans. The destinations are selected in consultation with the State/UT Governments.

Full text of the policy

Scheme for Integrated Development of Tourist Circuits

Under this Central Financial Assistance scheme the Ministry of Tourism Government of India has been extending assistance to States for development of tourism infrastructure. Experience has shown that in the past funds under the CFA have been used to fund a large number of small isolated projects, spread throughout the length and breadth of the country resulting in the resources being spread very thinly. Therefore, in order to provide quick and substantial impact, during the 10th Five Year Plan, this new scheme of Integrated Development of Tourist Circuits have been taken up. The objective of the scheme is to identify tourist circuits in the country on an annual basis, and develop them to international standards. The aim is to provide all infrastructure facilities required by the tourists within these circuits. The Ministry of Tourism aim at convergence of resources and expertise through coordinated action with States/UTs and private sector.

Full text of the policy

Scheme of Assistance for Large Revenue Generating Projects

It is recognized that the development of tourism infrastructure projects requires very large investment that may not be possible out of the budgetary resources of the Government of India alone. In order to remove these shortcomings and to bring in private sector, corporate and institutional resources as well as techno-managerial efficiencies, it is proposed to promote large revenue generating projects for development of tourism infrastructure in public private partnerships and in partnerships with other Government / Semi-Government agencies.

Large revenue generating project, which can be admissible for assistance under this scheme, should be a project, which is also a tourist attraction, or used by tourists and generates revenue through a levy of fee or user charges on the visitors. Projects like Tourist trains, Cruise vessels, Cruise Terminals, Convention Centres, Golf Courses etc. would qualify for assistance. However, this is only an illustrative list.

Hotel & Restaurant component will not be eligible for assistance under the scheme either on a stand-alone basis or as an integral part of some other project. Besides hotel & restaurants, procurement of vehicles and sports facilities like stadiums will also not be eligible for assistance under the scheme.

Full text of the policy

Scheme for Rural Tourism

Tourism growth potential can be harnessed as a strategy for Rural Development. The development of a strong platform around the concept of Rural tourism is definitely useful for a country like India, where almost 74% of the population resides in its 7 million villages. Across the world the trends of industrialization and development have had an urban centric approach. Alongside, the stresses of urban lifestyles have led to a “counter-urbanization” syndrome. This has led to growing interest in the rural areas. At the same time this trend of urbanization has led to falling income levels, lesser job opportunities in the rural areas leading to an urbanization syndrome in the rural areas. Rural Tourism is one of the few activities which can provide a solution to these problems. Besides, there are other factors which are shifting the trend towards rural tourism like increasing levels of awareness, growing interest in heritage and culture and improved accessibility, and environmental consciousness. In the developed countries, this has resulted in a new style of tourism of visiting village settings to experience and live a relaxed and healthy lifestyle. This concept has taken the shape of a formal kind of Rural Tourism. Under this Scheme, thrust is to promote village tourism as the primary tourism product to spread tourism and its socio-economic benefits to rural and its new geographic regions. Key geographic regions are identified for development and promotion of Rural Tourism. The implementation is done through a Convergence Committee headed by the District Collector. Activities like improving the environment, hygiene, infrastructure etc. are covered for assistance. Apart from providing financial assistance, the focus is to tap the resources available under different schemes of Department. of Rural Development, State Governments and other concerned Departments of the Government of India.

Full text of the policy

Scheme for Support to Public Private Partnerships in Infrastructure (Viability Gap Funding)

Developement of infrastructure require large investments that cannot be undertaken out of public financing alone. Thus, in order to attract private capital as well as techno-managerial efficiencies associated with it, the government is committed to promoting Public-Private Partnerships (PPPs) in infrastructure development. This scheme has been put into effect for providing financial support to bridge the viability gap of infrastructure projects undertaken through Public Private Partnerships.

Full text of the policy

Scheme for Market Development Assistance (MDA)

The Marketing Development Assistance Scheme (MDA), administered by the Ministry of Tourism, Government of India, provides financial support to approved tourism service providers (i.e. hoteliers, travel agents, tour operators, tourist transport operators etc., whose turnover include foreign exchange earnings also) for undertaking the following tourism promotional activities abroad:

(A) Sales-cum-study tour

(B) Participation in fairs/exhibitions

(C) Publicity through printed material

Full text of the policy

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