Travelling in India is cheaper


INDO-AMERICAN Chamber of Commerce (IACC) has recommended to the government to bring tourism in the concurrent list of the Constitution for the orderly growth of the sector on a pan-India basis. “An empowered centre can play a more proactive role in developing the tourism sector,” says IACC.

The tax structure needs to be harmonised to ensure uniformity of levies on tourism related sectors like hotels, tour operators, travel services etc. Arbitrary and adhoc imposition of levies by some state governments have stifled the tourism growth.

It has also created, among the states front–runners and laggards in tourism development. In some states, there are focused policy initiatives to develop the tourism sector, which is netting in considerable revenue from both from foreign and domestic travellers.

A planned and scientific business model for tourism pre-supposes showcasing India as a whole as a tourist destination with its varied and rich natural endowments. That is possible only when the central government takes more initiatives in conjunction with the state governments, such as setting aside more funds for tourism development through budgetary allocations, making legislations that promote tourism etc.

Equally significant is granting infrastructure status to the hotels so that they can tap resources for construction and modernisation in a much easier manner.

In fact, some state governments have granted industry status to the tourism. But that is confined to that particular State. Hotels across the country can avail either industry/ infrastructure status only when the Centre is empowered to take the decision.

“Although travel to India has become cheaper, hotel rooms have become more expensive. There is a shortfall of around 1.1 lakh hotel rooms in the country. Due to the increasing gap between the demand and supply, hotels have increased their average room rates by 18-20 percent annually. Thus there is an urgent need to address the accommodation problem,” says, IACC.

In order to minimise administrative hassles and avoid ambiguity, IACC recommends that the government should issue a clear definition of the term “foreign tourists’’ to include business tourists, airline crew, medical tourists among others. The RBI also supports this position.

Tourism is poised to become a key driver of economic growth. To harness it’s direct and multiplier effects for employment generation and poverty alleviation, it becomes imperative to raise requisite infrastructure.

Tourist arrivals to India increased to 4.43 million in 2006, up 14.2 per cent from 3.92 million in 2005. The foreign exchange earnings from tourism grew to $ 6.569 billion in 2006, an increase of 14.6 percent from 2005. Retention of foreign exchange earned through tourism is the highest as out going is minimal.

While this is significant, the tourism industry must proactively work in partnership with the government to promote India as the most preferred tourist destination. This is critical as India’s share in global tourism was a miniscule 0.52 percent during 2006.