Tourism: Effects On Economy & Employment

Tourism – especially foreigners coming to India – has always been a subject that has received less than the desired attention by successive governments at the Centre and in the states. With some exceptions like Kerala and Haryana a long time ago, no other state seems to have made earnest efforts to boost tourism – specially to attract international tourists. I have often tried to find some answers but failed. The only explanations that come to my mind are either that this is not a vote bank puller or perhaps the state governments have not really grasped the economic and employment generation prospects that can come with an increase in incoming foreign tourists.

Even before coming to some facts about the ‘effects on economy and employment’, just to put the matter in perspective, I looked up Google to check out the countries that attract the largest number of foreign tourists per person of their own population. As expected Vatican – technically a sovereign nation – is right on top. This tiny nation of just about 1,000 people attracts around seven million visitors annually, that is about 7,000 per capita. Of course, there are as many as 50 nations in the world where annual arrival of tourists exceed their population. Leaving out the tiny ones like Andorra (population <80,000), San Marino (33,000) and Monaco (36,000), surprisingly Croatia – with a sizable population of about four million – located at the crossroads of Central and Southeast Europe – attracts visitors every year around 14 times its population!

Anyway, back to The Vatican, and for a very good reason. During the recent inauguration of the Shriram Janmabhoomi Mandir, we all learnt about the tourism potential of this forgotten city of about 60,000 people. So, here we have the highest seat of Catholicism (1.4 billion in the world) attracting 7,000 tourists per capita so why shouldn’t we target something on those lines in Ayodhya – now the undisputed tallest place of Hinduism – with a global Hindu population of about 1.2 billion – and growing! On a direct proportionate basis, that would work out to a mind boggling 420 million visiting Ayodhya every year; 11.5 lakhs every single day! Okay, we know that is not feasible and not manageable – logistics and   infrastructure would not permit that even if a miracle was to happen and such numbers do descend at the holy temple town located on the banks of Saryu river where Lord Ram was born. Also, let’s look at two factors – firstly Catholics have only Vatican whereas we Hindus have many other teerthsthans like Mata Vaishno Devi near Jammu, Golden Temple in Amritsar, Tirupati Balaji in the South, the spruced up Kashi Vishwanath temple in the transformed city of Varanasi, Meenakshi Temple in Madurai, UNESCO World Heritage Great Living Chola Temples in Thanjavur Tamil Nadu, Mahabodhi Temple in Gaya, Akshardham in Gujarat and Delhi and now in several other locations too…the list is endless. 

The second vital factor is the location of the Vatican and that of Ayodhya. The majority of Catholics live in Europe for whom the Vatican is just a short drive or flight away. Even for those in the USA, it is not too far to fly over the Pacific and reach there. Ayodhya, on the other hand, is a long way off for Hindus living in the US, Europe, Canada, Australia, the Middle East and other places in the world. Out of the total ‘Hindus’ in the world, estimated at 1.2 billion, nearly 966 million live in India; so we are left with only 234 million living out of the country. Taking all these factors into account, let’s be practical and set our sights on getting just one per cent of the imputed figure of 420 million. Even if 4.2 million foreign visitors were to come to Ayodhya we will have whopping footfalls of over 11,500 visitors daily – not really an eye popping figure and well within the local administration’s management capabilities. 

As a matter of fact, our Prime Minister envisions redevelopment of the city to handle up to three lakh people streaming in every single day in ten years as per the Master Plan 2031. He sees an investment of Rs 85,000 crore over 10 years and has himself mentioned that “foundation had been laid on the same day for development works worth more than INR 15,000 crore which would convert the city into a mega tourist hub”. Plans include enhanced connectivity, hotels by Taj, ITC, Radisson as well as budget players like OYO and others. Add to it the newly emerged culture of Home-stays and we should be able to accommodate 11,500 foreign tourists and perhaps a larger number of the domestic travellers. The economic gains to the city/region would be enormous. So would be the potential employment for hotel workers, taxi drivers, tourist guides, merchandise retailers, FMCG shops, fruits, vegetables and flower vendors, auto sales and service outlets etc. The Ayodhya Development Authority envisages development of not only the small core city of about 31.5 sq. km but the master planned area of 133 sq. km and even a bigger area of nearly 875 sq. km.

But why am I talking about only Ayodhya or only generic ‘spiritual tourism’? We have beautiful beaches, fascinating forests and wildlife, magnificent mountains, ancient forts and palaces, architectural marvels… everything that is needed to attract foreign tourists. Why are we then getting less than 10 million (official 2023 figure of Foreign Tourist Arrivals – FTAs – from January to December) of them annually. Let me share some interesting statistics about the FTAs, as well as economic and employment potential of tourism. The 2023 figure cited above is still around 15 per cent less than the pre-pandemic arrivals. From just 6.3 million FTAs in 2011, we crawled up ever so slowly to the peak of 10.9 million in 2019. Next two years were of course, disastrous due to the deadly Covid but we managed to pull up to 6.2 million in 2022 and an encouraging 9.25 million in 2023. What is more important is the fact that our foreign exchange earnings from tourism in 2022 were $17 billion and these arrivals would’ve certainly given a big boost to the employment scenario. Every additional tourist counts; as it has an effect on several sectors like civil aviation, auto industry, hospitality (hotels and restaurants) tour guides, souvenir shops etc. 

Coming back to the 2023 FTA figures, worldwide the count was 963 million who collectively spent a whopping $1031 billion. Money spent by foreign tourists coming to India in the same year was about 21.4 billion i.e. approximately 2.1per cent of the total!  India accounts for nearly 18 per cent of the world population – and with ‘everything that can attract tourists’ – why shouldn’t we look at 18 per cent share of more than the trillion dollars spent by them? Why settle for a piffling two per cent? Our global rank in the ‘receipts’ in 2023 was a shameful 14. So, the case I am trying to make is that we have everything that tourists want – beaches, rivers, mountains, forests, bio-diversity, history, culture. All that we are lagging behind is the ‘will’ to make India the biggest tourist hub in the world and to streamline access – air and road – to all our tourist hotspots and hotels to meet all budgets at those places, comfortable buses and taxies, trained and certified guides, excellent maintenance of places of attraction… and we will be in business; ready for the world. Definitely doable. 

Some important points, recently mentioned by the chairperson of the World Travel & Tourism Council India Initiative, also need urgent attention of the government. These are: 
(i)    need for rationalisation and reduction of ‘hotel taxes’ – currently 12 per cent GST for rooms of up to Rs 7,500 per night and 18 per cent above that tariff – as our neighbouring competitors like Australia, Cambodia, China, Indonesia, Malaysia and Thailand charge much lower GST/VAT between two per cent and 10 per cent and 
(ii)     higher budgetary allocation for the tourism ministry for aggressive overseas promotion. In the interim budget the allocation was a trifling Rs 3 crore – down from 100 crores last year – whereas we need nearly Rs 2,000 crores! In her maiden speech in the Rajya Sabha Mrs Sudha Murty also mentioned the need to give a big push to tourism – one of the only two points the distinguished MP spoke about.

Ayodhya is just the beginning. If the rest of India can receive even a fraction of the attention that ‘Ram Janmabhoomi’ got, there’ll be nothing to stop the flood of tourist arrivals. 
 

Krishan Kalra

Guest Author The author is a member, the Managing Committee of the Indian Cancer Society, Delhi and was member of the Governing Council, of the Rajiv Gandhi Cancer Institute and Research Centre. He is past president of AIMA and a former member, the Board of Governors, IIMC.