<div><em><strong>K Yatish Rajawat </strong>on how lack of inter-state co-operation has hindered the growth of the tourism industry and how to solve the problem</em><br><br><br>The tourism industry contributes over 9 per cent of the employment base almost 37 million people in India are employed in it, it contributes 7 per cent to the national GDP. Inspite of the massive employment generation capability of the tourism industry it has been ignored in the last ten years. The last tourism policy -- a half- baked one -- came out more than 10 years back. </div><div> </div><div>On Wednesday (28 July), the tourism minister told the Parliament that a draft tourism policy is in the works and will be introduced shortly. As per the draft National Tourism Policy 2015 (NTP-15) which is available now, the government is looking at major regulatory and legislative changes under NTP-15.</div><div> </div><div>One of the major legislative reform recommended under the NTP-15 is to make tourism a concurrent subject so the central government can also be involved in shaping the industry. Currently, tourism is a state subject and there is very little that the central government can do. The most visible thing the government has done in the past couple of years is ‘Incredible India’ campaign to promote India as a tourism spot.<br><br><table align="right" border="1" cellpadding="1" cellspacing="1" style="width: 200px"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/Yatish-Rajawat-200.jpg" style="width: 200px; height: 200px; margin-left: 1px; margin-right: 1px; float: right;"></td></tr><tr><td><strong>K Yatish Rajawat</strong></td></tr></tbody></table>Unfortunately while the government burnt enormous amount of money under Incredible India and made several agencies like Ogilvy & Mather rich, it mainly remained an advertising campaign. With almost negligible resources spent in developing or creating facilities for tourists. Some of the states like Kerala, Madhya Pradesh and Gujarat did a better job of creating tourism infrastructure. </div><div> </div><div>But the lack of inter-state co-operation and a concerted approach to create tourism circuits has hindered the growth of the tourism industry. For instance, if a Buddhist tourism circuit has to be developed it will span Bihar , Jharkhand and even Madhya Pradesh. Two of these states have their own approach in terms of tourism, and Jharkhand seems to have none. Moreover, the high paying tourists for this will come from Japan who required international airport, easy visa and international facilities, all of which require central government intervention. Therefore, bringing tourism in as a concurrent subject will be an important move.</div><div> </div><div>NTP-15 also envisages setting up a tourism regulatory authority, that would draft laws and regulate the tourism industry. In order to achieve a common vision and address issues that affect the tourism ministry, a new institutional structure is expected to come up. The three bodies likely to be set up at the central level are as follows:</div><div> </div><div>- National Tourism Authority (NTA)</div><div>- National Tourism Advisory Board (NTAB)</div><div>- Inter-Ministerial Coordination Committee on Tourism (IMCCT)</div><div> </div><div> </div><div>This is an interesting move as though the tourism industry affects several companies in the hotel, restaurants, aviation , transportation none of them look at themselves as tourism company. It will be interesting how these different sectors will react once they come under a regulator. For instance, the hotel and aviation industry is largely unregulated from fare/tariff point of view. Hotel rates and service quality vary widely across the spectrum and are a huge deterrence for visitors looking at a certain level of consistency and affordability. </div><div> </div><div>The hotel industry is a very powerful lobby very closely connected to the real estate lobby it is also a very fragmented industry with small to large players. Unfortunately it does not have any quality of service parameters that are regulated. Only food or kitchens are regulated by the local state excise and food departments. Similarly, transportation both local and national particularly at tourist spots have nobody to regulate their fares. <br> </div><div>The promotion of tourism particularly for foreign tourists is an expense that individual location, cities, or even states cannot bear. It needs a concerted effort at the central level. Tourism is also a major foreign exchange generator, it is the third largest just after gems and jewellery and readymade garments. Therefore, every country spend enormous resources to ensure that it has a positive image in the world.</div><div> </div><div>Currently, the ratio of foreign to domestic tourists is in favour of the latter which shows the enormous potential that there is in terms of foreign tourism. Foreign visitors represent 19.3 per cent of the total spend in the tourism industry, that means more than 80 per cent of the spend comes from local tourists.<br> </div><div> It is also an attractive sector for FDI as with domestic tourists being larger than foreign tourists it means that it is relatively insulated from slowdown in the rest of the world. Foreign companies looking at investments into tourist locations are hampered by local laws. For instance, several foreign companies are interested in setting up jetties to attract tourists travelling on their own yatchs or boats from south east asia. Currently, the regulation for setting up a jetty is so cumbersome with defence, coast guard and even Ministry of External Affairs involved that it has not happened.</div><div> </div><div>FDI or any other form of investment in tourism sector is also important because of its huge employment generation capacity. An investment of $1 million in the T&T sector creates 78 jobs . To put it in perspective, the same amount generates only 45 jobs in agriculture and 18 in the manufacturing sector, respectively. Of course with the investment also comes the requirement for skilled labour. The problem of talent and skills shortage seems to be more acute at the entry level. Increase in the number of employees at the supervisory and managerial levels has been growing at a CAGR of 4.7 per cent over the past five years, whereas the number of entry level employees per hotel has increased by 1.7 per cent. </div><div> </div><div>NTP-15 will also have to take into account the requirement of skilled labour and invest to create, expand and increase the supply of skilled labours. The industry has made very little investment in creating training facilities as it has had a very short term horizon for its own needs. Such investment can only be done at central level if such certification has to attract the aspirational class and good talent.</div><div> </div><div> </div><div> </div><div><em>K Yatish Rajawat is a senior journalist, he tweets @yatishrajawat</em></div><div> </div><div> </div><div> </div><div> </div>
