Report of the working group on tourism 11th five year plan



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Report of

the working group

on tourism


11th five year plan

(2007- 12)


Ministry of Tourism

Government of india

Index


Chapter No.

Subject

Page No.

1

Introduction

3-5

2

Review of activities of the Tenth Five Year Plan (2002-2007)

6-21

3

Strategy for tourism development in the Eleventh Five Year Plan

22-26

4

Development of Infrastructure and Destination Management

27-33

5

Publicity and Mazrketing

34-37

6

Heritage and Culture Tourism

38-43

7

Product Development and Domestic Tourism


44-46

8

Susainable Tourism, Eco Tourism, Wild Life Tourism and Adventure Tourism

47-50

9

Access and Connectivity and related issues

51-56

10

Taxation,Incentirves and Concession

57-60

11

HRD and Capacity Building

61-63

12

Monitoring Reasearch and Statistics

64-66

13

Scheme - wise outlay proposed for Eleventh Plan

67



Chapter - 1

Introduction

1.01 Tourism has been a major social phenomenon of the societies all along. It is motivated by the natural urge of every human being for new experience, adventure, education and entertainment. The motivations for tourism also include social, religious and business interests. The spread of education has fostered a desire to know more about different parts of the globe. The basic human thirst for new experience and knowledge has become stronger, as communication barriers are getting overcome by technological advances. Progress in air transport and development of tourist facilities have encouraged people to venture out to the foreign lands.

1.02 Tourism’s importance, as an instrument for economic development and employment generation, particularly in remote and backward areas, has been well recognized the world over. It is the largest service industry globally in terms of gross revenue as well as foreign exchange earnings. Tourism can play an important and effective role in achieving the growth with equity objectives which we have set for ourselves.

1.03 Tourism is one economic sector in India that has the potential to grow at a high rate and can ensure consequential development of the infrastructure of the destinations. It has the capacity to capitalize on the country’s success in the services sector and provide sustainable models of growth.

1.04 It has the potential to stimulate other economic sectors through its backward and forward linkages and cross-sectoral synergies with sectors like agriculture, horticulture, poultry, handicrafts, transport, construction, etc. Expenditure on tourism induces a chain of transactions requiring supply of goods and services from these related sectors. The consumption demand, emanating from tourist expenditure, also induces more employment and generates a multiplier effect on the economy. As a result, additional income and employment opportunities are generated through such linkages. Thus, the expansion of the tourism sector can lead to large scale employment generation and poverty alleviation. The economic benefits that flow into the economy through growth of tourism in shape of increased national and State revenues, business receipts, employment, wages and salary income, buoyancy in Central, State and local tax receipts can contribute towards overall socio-economic improvement and accelerated growth in the economy.

1.05 Tourism is overwhelmingly an industry of Private sector service Providers, although the public sector has a significant role to play in infrastructure areas either directly or through Public Private Partnership mode. It is a multi-sectoral activity characterized by multiple services provided by a range of suppliers. It is quite similar to manufacturing industry, where the supply chain is as important as the end product. The related sectors include airlines, Surface transport, hotels, basic infrastructure and facilitation systems, etc. Thus, the growth of tourism cannot be attained unless the issues related to all the sectors are addressed simultaneously.

1.06 Another important feature of the tourism industry, which is of particular significance to India, is its contribution to national integration and preservation of natural as well as cultural environments and enrichment of the social and cultural lives of people. Over 382 million domestic tourists visiting different parts of the country every year return with a better understanding of the people living in different regions of the country. They have a better appreciation of the cultural diversity of India. Tourism also encourages preservation of monuments and heritage properties and helps the survival of arts forms, crafts and culture.

1.07 It is also important to note that tourism has become an instrument for sustainable human development including:


  • Poverty elimination

  • Environmental regeneration

  • Job creation; and

  • Advancement of women and other disadvantaged groups.

Scale of Global tourism

1.08 According to the World Tourism Organisation (WTO), the year 2005 saw more than 800 million international tourist arrivals, and the tourism receipts were of the order of US $ 682 billion. The World Travel and Tourism Council (WTTC) for 2006 forecasts that travel and tourism will generate 234 million direct and indirect jobs world-wide, accounting for 8.7% of the global employment, and it will contribute upto 10.3% of the global GDP. According to the same estimate, the global travel and tourism activity is expected to increase by 4.7% between 2007 and 2016.


Scale of India tourism

1.09 There has been a remarkable growth in the last three years, in foreign tourist arrival to India due to the various efforts made, including promoting India through the ‘Incredible India’ campaign in overseas markets. It has increased by about 65% from a level of 2.38 million in 2002 to 3.92 million in 2005, while the foreign exchange earnings have grown by about 96% during the same period. The Tourism satellite accounting for India has brought out that Tourism’s contribution to GDP of the country has been 5.9% in 2003-04, while employment in tourism sector both direct and indirect, has been 41.8 million in the same year which accounts for 8.78% of total employment in the country. Though the growth in tourism in India has been impressive, India’s share in global tourist arrivals and earnings is quite insignificant. It is universally acknowledged that the tourism resources in the country have the potential to generate significantly higher levels of demand from the domestic and international markets, and, if exploited intelligently in a sustainable manner, can prove to be the proverbial engine of growth for the economy.


-----
Chapter - 2
Review of Activities of the

10th Five Year Plan 2002-07
2.01 During the 10th Five Year Plan 2002-07, an attempt was made to position tourism as a major contributor of economic growth, and harness its direct and multiplier effects for employment and poverty eradication in an environmentally sustainable manner. Various schemes and activities taken up during the 10th Plan period aimed at enhancing the employment potential within the tourism sector as well as at fostering economic integration through developing linkages with other sectors. Broadly, the attempt was 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 and trade and the vast untapped potential of India as a destination;

  • Acknowledge 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;

  • Ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched, spiritually elevated and “feel India from within”.

2.02 The 10th Five Year Plan had a distinct shift from the approach adopted in the earlier plans. During the plan period, emphasis was laid on:


    1. Positioning and maintaining tourism development as a National priority activity

    2. Enhancing and maintaining the competitiveness of India as a tourist destination

    3. Improving India’s existing tourism products and expanding these to meet new market requirements

    4. Creation of world class infrastructure

    5. Developing sustained and effective market plans and programmes

    6. Special thrust to rural and small segment tourism

    7. Attention to civilisational issues and issues pertaining to civic administration, good governance and also to social and cultural values

2.03 Keeping in view the broad priorities for development of tourism during the 10th Plan 2002-07 as above, the broad fields of development taken up during the plan were:

Integrated Development of Tourism Circuits

Product/Infrastructure and Destination Development

Assistance for Large Revenue Generating Projects

Human Resource Development

Promotion and Publicity

Others(Market Research / Computerization & IT/ Interest Subsidy)


Integrated Development of Tourism Circuits

2.04 It was observed at the beginning of the 10th Plan that the Central Financial Assistance to the States had not been able to create a major impact in terms of creation of world-class tourism infrastructure. The experience showed that the resources available had 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. The infrastructure schemes being Centrally Sponsored had to depend on the contribution of the State Governments and many times there had been delays in release of this contribution. Therefore, in order to provide quick and substantial impact, the revised scheme was taken up to identify key tourism circuits in the country on an annual basis, and develop them to international standards, with the objective of providing all infrastructure facilities required by the tourists within these circuits. Ministry of Tourism ensured convergence of resources and expertise through coordinated action with States/UTs and private sector. The master planning as well as the implementation and monitoring of works in the selected circuits, which included improvement in accessibility, improvement in environment including solid waste management and sewerage management around the destination, illumination of the destinations, lighting of the approaches, etc., was carried out directly by the Ministry of Tourism or through the State Tourism Departments.

2.05 The circuits prioritized for development during the 10th plan period are given in a statement at Appendix-I to this report.
(B) Product/infrastructure and destination Development
2.06 In the 9th Plan, destination development had tended to be somewhat ad hoc, with inadequate prioritization. During the 10th plan period, limited destinations in the States / UTs were identified on yearly basis for integrated intensive development.
2.07 While developing the destinations, the strategy followed, was to ensure that the developments take place in a regional planning framework that is not restricted to the immediate environs of the site but extends to the ‘region of influence’ of the attraction or cluster of attractions including the primary staging area and travel nodes. It was ensured that all development work was based on professionally prepared master plans, ideally using the best expertise and contained components that are conceived, to satisfy the preferences and requirement needs of a clearly identified target market. Efforts were made to see that the master planning approach included all stakeholders in the planning process – all levels of government and administration, various government agencies and departments, the local community, elected representatives, and members of the tourism industry or related industries.
2.08 Destinations were carefully selected in consultation with the State Governments, based on the tourism potential. The activities taken up under Product Development and strategies followed were as follows:

2.9 Priority was given to promote Rural Tourism as the primary tourism product to spread tourism and its socio-economic benefits to rural areas and its new geographic regions. Key geographic regions were identified for development and promotion of rural tourism. The implementation was done through a convergence committee headed by the District Collector. A sum of Rs.50 lakh was made available for each project, and activities like improving the environment, hygiene, infrastructure etc. were assisted. A statement indicating the villages taken up during the period 2002-07 is at Appendix-II.

2.10 Heritage cities and towns were taken up for development to promote Heritage Tourism. Heritage cities like Agra, Jaipur, Madurai, Hyderabad, Gwalior etc. were taken up.
2.11 India with world’s greatest bio-diversity with a variety of unique natural locales, is a perfect candidate for promotion of Eco-tourism. As such, the strategy followed for development of eco-tourism during the 10th Plan included identifying focal locations for eco-tourism like the Himalayas, North Eastern States, Western Ghats, Jharkhand, Andaman & Nicobar Islands, Lakshadweep; and providing financial assistance to the State Governments for development of these locations as eco-tourism spots.
2.12 India has some of the greatest varieties of fauna in the world that has not been exploited through its potential. Efforts were made to make wild life sanctuaries and national parks as an integral part of the Indian tourism product. Assistance was provided to the State Governments to improve the facilities available in these parks. The Tiger and the Elephant were the ‘brands’ of Indian Wildlife Tourism.
2.13 India’s greatest adventure tourism assets are in the form of Himalayas as well as in its mighty rivers. Mountain based adventure activities were promoted in the Himalayas, creating the Himalayas as the brand and the icon of Indian Adventure Tourism.

2.14 The holistic healing product were packaged and promoted, as going beyond Ayurveda and Yoga, etc. to showcase Health Tourism products of India. The brand for this product was created and destination & sites for holistic healing which is governed by a well defined set of standards and regulations, were developed by the State Governments with assistance from the Ministry of Tourism.

2.15 Beach & Coastal Tourism forms the mainstay of international tourism and provides the volumes required for India’s key markets, to create a suitable industry. A number of sites on the Coast of India were identified during the plan period for development of beach resorts.
2.16 India is a veritable shopper’s paradise and the retail trade provides enormous forward and backward linkages throughout the economy. Recognizing shopping as an intrinsic part of the tourism experience and most valuable contributor to revenues, the strategy during the 10th plan was to encourage the development of dedicated shopping centres for traditional crafts, designed on the lines of ethnic village “haat” such as Dilli Haat and Shilpagram. Availability of information on where to procure specific crafts and produce reliable unbiased shopping guides were enhanced during the plan period.
2.17 A large number of pilgrimage centres exist in the country which require some investment for improvement and providing better amenities. These tourist and pilgrimage centres are mainly frequented by domestic tourists and in most cases the basic amenities are missing. A large number of such centres were taken up during the 10th Plan for development, and financial assistance was provided to States.

2.18 Tourist reception centres are basically meant for interpretation facilities, dissemination of information and provision of necessary communication facilities. Similarly, wayside amenities are meant to meet the requirement of the tourists traveling to tourist destinations by road and include facilities like lounge, cafeteria, toilets, parking etc. Financial assistance during the plan for structural improvements, construction of additional accommodation and other facilities and improvement of sanitary and electrical fittings, were given. Thrust was given to provide such facilities which are professionally designed and eco-friendly. It was also emphasized that the management of such facilities is out sourced and operated on pay and use basis.

2.19 Refurbishment of Monuments/Heritage Buildings and Improvement of their Environs was intended to provide financial assistance to ASI and State/UT Governments for undertaking repair, refurbishment, beautification, landscaping, improvement of amenities, and illumination of monuments/heritage buildings falling in the jurisdiction of ASI or the State Governments. This ongoing scheme was continued in the 10th plan also and a number of monuments/sites were taken up during the plan period.

2.20 Illumination of monuments and SEL shows has helped in adding value to the tourist attractions. In the 10th plan, laser lighting and laser shows were included under the scheme. However, funds under this scheme were used only for major tourist attractions which fall within recognized tourism circuits or preferred destinations.
2.21 A statement giving the Destinations/Products prioritized for development and Central Financial Assistance during the 10th Plan is at Appendix-III.
(C) Assistance for large revenue generating projects
2.22 A new scheme was introduced during the 10th Plan wherein support in the form of grant to act as a catalyst was provided to large revenue generating products through the State Tourism Development Corporations or the State Investment and Industrial Development Corporations and the State Financial Corporations. This assistance was, in turn, utilized by these Corporations as equity in projects to be promoted by them or private sector projects. Projects like convention centres, luxury trains, cruise terminals etc. could be taken up under this scheme. A statement indicating the projects funded from the scheme during 10th Five Year Plan is given at Appendix-IV.

(D) Human Resource Development

2.23 Tourism being an employment oriented sector, it is estimated that the hotel and the catering sector provide more than 10% of the total employment generated by the tourism industry. Being a labour oriented industry, directly in contact with the country’s tourists, skills required by personnel engaged in this sector are different from those required by personnel engaged in other sectors. At present there are 24 Institutes of Hotel Management, and 11 Food Craft Institutes. The IHMs conduct diploma courses, post graduate diploma courses, craft and certificate courses. The FCIs conduct diploma courses in cookery, food and beverage services, house-keeping, etc. In order to harness the resources and provide a central thrust, the Ministry of Tourism has also established the National Council for Hotel Management and Catering Technology. The main objectives of the Council are to advise the Government on coordinated development of Hotel Management and Catering Education; to prescribe educational and other qualifications for staff in the institutions; to give certification and accreditation, and to standardize the courses. Ministry of Tourism encouraged the Institutes of hotel management to explore appropriate means to generate their additional resources during the 10th Plan, so that these institutions gradually become self supporting at least on revenue accounts. Assistance was given to them to enhance their infrastructural facilities.

2.24 The NCHM&CT, which has emerged as an apex formation in the country for hospitality management education, was assisted for construction of its new building at Noida. The Building is almost ready and it is expected that it will meet the requirements of Council.

2.25 The existing FCIs, IHMs and the institutes in the private sector cater to mainly the organized sector. The unorganized sector consisting of small hotels, dhabas, restaurants and other eatable joints spread all over the country hardly get an opportunity of training from skilled and professional trainers in the hospitality sector. As it is not possible and viable to set up FCIs in every district, a number of Capacity Building Programmes for the workers of un-organized sector were organized by FCIs and IHMs during the 10th Plan through outreach training programmes.

2.26 Indian Institute of Tourism and Travel Management (IITTM), established in 1983 as a registered society under the Ministry of Tourism primarily for developing and promoting education, training and research in travel and tourism, which was just running a single P.G. Diploma Course, has started two new courses during the 10th Plan i.e., a Bachelor Degree in Tourism (a three-year course) and a Masters Degree in Business Administration (a two-year course) with specialization in tourism. During the year, the Institute has started construction of its Campus at Bhubaneshwar for its Eastern Regional Centre on the land provided by the State Government free of cost. The Institute also conducted a number of capacity building programmes for the workers in the unorganized sector like Railway Coolies, Taxi walas, Dhaba and Hotel Staff, unemployed youth, etc. The Institute also conducted a number of Guide Training Programmes during the plan period to upgrade the skills of existing guides as also to recruit new guides. During the 10th Plan, the Institute has become almost self sufficient to meet its regular revenue expenditure.

2.27 Guide training courses are organized by the Ministry of Tourism and also by the State Governments. These courses include programmes for fresh tourist guides and refresher courses for those already active in guide services. The contents of these courses were restructured during the 10th Plan. Courses were also organized for Government officials who have an interface with the tourists in order to sensitize them.
(E) MARKETING AND PROMOTION
2.28 There is a vast untapped potential inherent in the tourism sector for generating more wealth, incomes and employment, provided the Indian tourism product is promoted and marketed vigorously, both at home and abroad. One of the reasons why India is still lagging behind in this highly competitive market is the lack of adequate budgetary support for promotion and marketing as compared to some of the competing destinations, including those in India’s neighborhood. While the non-plan budget basically caters to salary of the establishment of the Tourist offices, including traveling expenses, office expenses, rent and taxes, the expenditure on promotion & marketing, which constitute the main area of operation, has to be met from the Plan budget. Within India, the Indian tourism product is promoted primarily by the Ministry of Tourism with the help of 5 regional offices and 16 sub-regional offices under them, with the involvement of the State Governments. Likewise, the Indian tourism product is promoted and marketed overseas through the Tourist Offices at 13 locations world over, as also directly by the Ministry.

Domestic promotion

2.29 During the 10th Plan period, a need was felt to launch a mass tourism awareness campaign highlighting the significant contribution of this sector in economic growth in general and creating employment in particular. This was required to bring tourism in the mainstream of our national development. The earlier policy of supplementing the efforts of the State Tourism Departments/Corporations for promotion and marketing of their tourism products continued. The promotion effort had a multi-dimensional thrust. It covered image building, dissemination of information, and public relation efforts. The communication message was geared towards the traveling tourists, the tourist service providers, travel and consumer media. The efforts took into account new technology and means of communication like those based on Information Technology tools as well as conventional tools like brochures, advertisements, and telephone based information, face to face communication etc. The domestic campaign also envisaged highlighting the new tourism circuits created. The unique features of the domestic campaign were:



  1. Creating high standard facilitation centres at all leading gateways, both railheads and airports.




  1. Launching a tourism awareness campaign involving all service providers such as taxi drivers, guides etc.




  1. Intensification of guides training.




  1. Creating a unique brand for Indian tourism which is vibrant and based on sustainable development.




  1. Using the digital technology to create the unique experiences of Indian tourism on the internet.




  1. Using travel writers and photographers of regional languages to write about the other regions.


Fairs, Festivals and Craft Melas

2.30 The variety of fairs and festivals are a powerful tool for showcasing the Indian culture for the tourists. These events are keenly awaited and viewed with interest and curiosity by domestic and foreign tourists. Such events have been supported in the past and were also given support during the 10th Plan. However, as a matter of policy not more than two events from each State were supported in a year. The local administrators were encouraged to generate local resources to augment Government outlays. It is expected that such fairs and festivals would become self-sufficient in due course.

Hospitality

2.31 Under the Hospitality programme of the Ministry, travel writers, tour operators, media celebrities, TV film producers and opinion makers were regularly invited and taken to different destinations. The overseas guests on arrival in India were looked after and escorted to various places of tourist interest. They, in turn helped disseminating information about India in their home markets.

Publicity

2.32 The Ministry has been adopting conventional publicity measures since the past plan periods. These include printing and distributions of Brochures, folders, maps, information booklets etc. During the 10th Plan, this was continued with a qualitative improvement and with more focus on IT and with electronic media. The help of professional public relation agency was taken for the image building exercise.


Overseas Promotion

2.33 The Ministry of Tourism performs its main marketing function through a network of 13 Government of India Tourist Offices located overseas towards specific area demarcations under 6 distinct regions as given below:

New York – responsible for the entire North American and South American Continent
Frankfurt – responsible for Continental Europe
London – responsible for U.K. and Ireland
Dubai -- responsible for West Asia & South Africa
Sydney – responsible for Australasia
Tokyo – responsible for East Asia
2.34 The existing system is to develop marketing plans region-wise taking into account the existing market segments and consumer needs which vary between different regions. However, the operational elements of these different marketing plans can be classified as follows:


  1. Directing advertising

  2. Public relations

  3. Promotion

2.35 Under direct advertising, the tourist offices release advertisement in leading travel magazines, newspaper etc. Some times, joint advertising and brochure support is also undertaken with tour operators etc. Under public relations, the offices in association with tour operators and airlines organize familiarization tours to India, for which expenditure is borne by the Ministry. Under promotion, the offices take part in special trade festivals like the ITB Berlin, WTM London, etc.

2.36 Although external publicity is a costly proposition, the fact remains that without aggressive promotion in the highly competitive tourist market overseas, India can not achieve the targeted growth and increased share of global tourist arrivals and receipts. During the 10th Plan period, the strategies for promotion included:

Dissemination of tourist information and attending to enquiries


Creating awareness about Indian Tourism Product
Maintaining close relation and co-ordination with Indian Missions, Travel and Trade Media, Airlines
Liaison with local bodies, Chambers of Commerce and other professional bodies
Organizing Indian food festivals and participating in festivals/exhibitions
IT based dissemination of information
Appointing professional PR agencies
Organizing festivals, Road Shows
Special Promotion Campaigns
Marketing partnerships
Print and electronic media publicity
Joint regional promotion
Hospitality
Gathering Market Intelligence
Brand Building of India
Consumer oriented advertising and net based electronic media, FM

Radio
Hospitality and Funding MO Passages


Market Development Assistance
(F) OTHERS

Market Research and Perspective Plans

2.37 A comprehensive statistical research programme is an essential input for sustainable development of tourism. Lack of information about different aspects of tourism is one of the major reasons for the sector not getting its due place in the national development plans of several countries. Infrastructure development and marketing of tourism have to be based on research findings and analysis. Without quantitative information on the demand characteristics, profiles of tourists along with the statistics of availability of existing infrastructural facilities at various tourist destinations, it is not possible to plan effectively for tourism development and promotion. Compilation of statistics and commissioning of research studies are, therefore, very crucial, and so also is the preparation of perspective plans for States and master plans for regions.

2.38 The Ministry of Tourism is presently having a system under which foreign tourist arrival data are being collected from disembarkation cards. The data transcribed from these cards are computerized and tabulated. The estimates of foreign exchange earnings from tourism is estimated by the RBI as a part of balance of payments statistics based on a sample survey of foreign exchange transaction through authorized dealers. The statistics of domestic tourists visits are obtained from the State Government through a monthly return. The Ministry of Tourism also undertakes periodical surveys and studies of interest to Government.
2.39 During the 10th Five Year Plan, 20-Year Perspective Plans for all the States/UTs were prepared with the objective of development of tourism in an integrated way. These plans focused on the development of important tourist areas falling in the respective States in a coherent manner by dovetailing the funds and resources at the command of the State and clearly identifying the requirement for infrastructure development.
2.40 The Ministry also undertook a number of research studies to provide inputs to policy makers for planning and policy formulation. A few of the studies undertaken during the 10th Plan were:


  1. Impact of Civil Aviation Policies on Tourism

  2. Foreign Tourist Expanses on Handicrafts

  3. Domestic Tourism Survey

  4. International Passengers Survey

  5. Cruise Tourism – Potential & Strategy

  6. Best Practices followed by States in the field of Tourism

  7. Kerala’s Approach to Tourism Development

  8. Manpower Requirements in Hotel Industry and Tour/Travel Sector

2.41 An important study conducted by the Ministry during the 10th Plan was Development of Tourism Satellite Account for India giving the economic benefits of tourism in India like tourism’s share to GDP and employment.

2.42 As part of its efforts to develop tourism infrastructure in the country in a systematic manner which is sustainable, a number of Detailed Project Reports (DPRs) were also prepared by the Ministry for the Destinations/circuits short listed during the 10th Plan.
Capital/Interest Subsidy for Hotels

2.43 Till the 8th Plan, there was a scheme for providing interest subsidy for hotels up to 3 star category in the non-metropolitan areas. This scheme helped in meeting the accommodation demand of the middle income tourists to a large extent. However, administration of the scheme came in for criticism as the hotels had to approach the Ministry every time it had to claim the interest subsidy. As such, during the 10th plan, the interest subsidy scheme was replaced by the capital subsidy scheme. However, this scheme of interest subsidy continued for the old projects sanctioned in the past. Under the revised scheme, the capital grants up to 10% of the total principal loan taken from designated financial institutions upto Rs.25 lakh for 1-star hotels, Rs.50 lakhs for 2-star hotels and Rs.75 lakhs for 3-star and heritage basic category hotels, were given to encourage setting up of budget hotels in the country.

Information Technology

2.44 Information Technology was given a major thrust in the 10th Plan. Assistance was provided to the States to use IT in promotion and facilitation of tourism. IT was used as a major tool to promote Indian Tourism products in the country and abroad. The goals were to position India distinctively in the global tourism map using emerging technologies and new approaches in attention management to power India Tourism.

2.45 All these efforts made during the 10th Five Year Plan had a salutary effect on the Indiatourism. While the foreign tourist arrivals are expected to witness a growth of 78% during the period, growth in the foreign exchange earnings is expected to be of the order of 122%. India’s share in world tourism which was 0.37% during 2001 end, is likely to increase to 0.53% during 2006. As per the estimates about 12.5 million additional jobs were created directly and in-directly in the tourism sector during the 10th Plan period. Following tables present the facts and figures:
Achievements During the 10th Five Year Plan 2002-07
(a) Foreign Tourist Arrivals to India(In million)

Year

Arrivals

% Change over previous year

2002

2.38

(-)6.0

2003

2.73

(+)14.3

2004

3.46

(+)26.8

2005

3.92


(+)13.2

2006*

4.51

(+)15.0

Growth in 5 years i.e., 2006 over 2001: 78% (end of 9th Plan to end of 10th Plan)

*: Predicted.



(b) India’s share in world arrivals

Year

World Arrivals

(In million)

Arrivals in India

(In million)

Share of India in world arrivals(%)

2002

702.8

2.38

0.34

2003

690.9

2.73

0.39

2004

766.0

3.46


0.45

2005

808.0

3.92

0.49

2006*

844.0

4.51

0.53

India’s share in world arrivals increased to 0.53% in 2006 from the level of 0.37 % in 2001

*: Predicted.



(c) Foreign Exchange Earnings by India from Tourism

Year

Foreign Exchange Earnings (in US$ million)

% Change over previous year

2002

2923

(-) 3.9

2003

3533

(+)20.9

2004

4769


(+)35.0

2005

5731

(+)20.2

2006*

6768

(+)18.1

Growth in 5 years i.e., 2006 over 2001: 122% (end of 9th Plan

to end of 10th Plan)

*: Predicted.



(d) India’s share in world Foreign Exchange Earnings (In Billion US$)

Year

World Earnings

Earnings by India

Share of India in world earnings

2002

482.3

2.9

0.62

2003

524.2

3.5

0.69


2004

633.0

4.8

0.76

2005

682.0

5.7

0.84

2006

752.0

6.8

0.90

India’s share in world earnings increased to 0.90 % in 2006 from the level of 0.66 % in 2001(end of 9th Plan to end of 10th Plan)

*: Predicted.




(e) India’s Rank in Arrivals and Earnings


Year

India’s Rank

In World Arrivals

In World Earnings

2002

54th

37th


2003

50th

36th

2004

47th

35th

2005

43rd

33rd



(f) Foreign Exchange Earnings per tourist arrival – India & World


Year

Foreign Exchange Earnings per tourist (In US $)

India

World

2002

1228

686

2003

1294

759

2004

1378

826

2005

1462

844


2006*

1501

891

*: Predicted.



(g) Domestic Tourist Visits in India


Year

Domestic Tourist Visits (in million)

% Change over previous year

2002

269.6

14.0

2003

309.0

14.6

2004

366.2

18.5

2005

382.1

4.3

2006*

432.0

13.0

Growth in 5 years i.e., 2006 over 2001: 82.9% (end of 9th Plan


to end of 10th Plan)

*: Predicted.



(h) Share of Tourism Sector in India in GDP of the Nation


Year

Total Share of Tourism in GDP

2002-03

5.83%

2003-04

5.90%


(i) Employment Generation through Tourism in India


Year

Total Employment in Tourism Sector(In Million)

2002-03*

38.6

2003-04**

41.8

2004-05**

44.7

2005-06**

47.8

2006-07**

51.1


*: TSA Figure.

**: Estimated



CHAPTER - 3
Strategy for Tourism Development in the

11th Five Year Plan
3.01 During the 10th Five Year Plan, a doubled pronged strategy of upgrading the tourism infrastructure and vigorous marketing under the banner of ‘Incredible India’ campaign was followed to position India as a global brand. The following four-point journey was sought to be achieved to a large extent among the target tourists and in source markets:

From non-awareness to awareness

From awareness to interest

From interest to desire, and

From desire to final action i.e. booking a holiday.

The efforts made during the 10th plan are now resulting into India registering a growth of 78% in foreign tourist arrivals and a growth of 122% in foreign exchange earnings in 5 years time. Share of India in world arrivals, which was just 0.37% in 2001, is likely to be 0.53% in 2006. It has been estimated that about 12.5 million additional jobs have been created in the tourism sectors during the 10th Five Year Plan.

3.02 The Working Group on Tourism for the 11th Five Year Plan 2007-12, set up by the Planning Commission (constitution at Appendix-V), felt that keeping in view all variables in the environment, the product opportunities, the market scenario, the Indian planning and national objectives, following quantifiable goals may be set for the 11th Plan for Indiatourism:

3.03 INTERNATIONAL TOURISM

Visitation

Achieve international visitor levels of 10 million in 2011, at the end of 11th Plan.



Source Markets

Diversify principal source markets to include countries such as South Africa, Israel, Spain, China, Japan, S. Korea, Australia, Brazil, Argentina, etc. which offer high growth potential and from where present level of inbound tourist is below par.

Concentrate on countries like South Africa, Mauritius, Kenya, Malaysia, Fiji, etc with a large Indian Diasporas for greater visitations from those countries. Similarly target the PIOs and NRIs elsewhere to create greater resonance in them to visit the country of their origin and discover their roots. Target the ‘Baby Boomers’ group in Europe and North America by creating in them the desire to discover one of the oldest civilization of the world and to enjoy the plurality of cultural enjoyments which this country has to offer.

Revenues

Maintain and increase per capita spending of international visitors.

Attract higher quality tourists, increasing per head spending, resulting in higher revenues. Concentrate on Cruise tourism, MICE sector which are considered to be higher revenue generating sectors of tourism.

Seasonality

Reduce the seasonality in international tourist arrivals by targeting markets such as Australia, Spain, etc. It should be ensured that the drop in arrivals during “lean season’ is not more than 15% of the annual average.



Average Length of Stay

Maintain and initiate measures to ensure that the duration of stay is sustained, if not extended.



Purpose of Visit

Retain focus on Leisure Travelers.

Promote business related travel, including MICE market by promoting Convention Centres of international standards in major cities or at major tourist centres.

Expenditure

Prepare strategies to increase per capita expenditure on shopping and other non-accommodation, non-transportation heads, to match international benchmark of 30%.


3.04 DOMESTIC TOURISM

Visitation

Achieve a level of 760 million for domestic tourist visits by the year 2011, the end of 11th Plan at an annual average growth of 12%.

Complement international travel with domestic travel in order that the seasonality is eliminated.

Promote greater dispersal of domestic visitations in order to spread the benefits of tourism to all areas.



3.05 OTHER GOALS

Accommodation Units

Increase approved quality accommodation units from the current level of about 100,000 rooms to at least 200,000 rooms by 2011, to meet the increased requirement of tourism.

Set up hotels on the surplus land with Airport Authority of India near International Airports as per the international practices.

Promote development of budget hotels at the surplus Railway Land at specified Railway Stations.



Create land banks in the States and encourage Single Window facility for the investors in tourism projects

3.06 In order to achieve all these objectives, the Working Group felt that it was necessary that the momentum generated in tourism sector during the 10th Plan period is sustained, so that the full potential of the sector, as a major engine of economic growth, is realized, and the benefits of associated development reach all segments of the society. The recommendations of the Group was to adopt and apply sustainable practices and principles, and identify and resolve the constraints. The Working Group also felt it necessary that beside development of world class infrastructure and launching aggressive marketing campaigns, access & connectivity to India need be improved; new forms of tourism like rural tourism, cultural tourism, adventure tourism, cruise tourism, MICE tourism and medical tourism are taken up with renewed zeal & efforts; India is made a full year destination rather than a Oct.-March destination by diminishing the seasonality factor and promoting the Himalayas and the beaches during summers and the coastal regions during the monsoons; and India’s competitiveness as a preferred destination is enhanced with rationalization of taxes, liberalization of visa regime, improvement of airports, removing barriers to travel, enhancing tourist safety & security, improving signages, etc. To achieve all these, the following six key strategic objectives need to be kept in view:


i. Positioning and maintaining tourism development as a national priority activity;


    • Provide effective linkages and close coordination between various Departments and Ministries of Government;

    • Plan and implement a professionally managed integrated communications strategy to increase awareness about tourism and its social and economic impact on the society.

ii. Enhancing and maintaining the competitiveness of India as a tourist destination;

    • Take effective steps for easier & faster availability of visas;

    • Increasing air connectivity and seat capacity from major overseas markets;

    • Improving facilities and quality of services at international and major domestic airports;

    • Rationalization of taxes;

    • Removing restrictions like RAP/PAP/ILP.

iii. Improving India’s existing tourism products further and expanding these to meet new market requirements;

    • Develop sustainable beach, coastal and cruise tourism;

    • Package and market India’s wide variety of traditional cuisines;

    • Encourage adventure and rural tourism;

    • Develop and promote round-the-year tourism;

    • Pursue the Medical Tourism vigorously;

    • Take advantage of MICE segment;

iv. Creation of world class infrastructure;

    • Identify travel circuits for development as international standard destinations;

    • Construction and improvement of highways for good connectivity with tourist destinations;

    • Introduction of special tourist trains, establishment of budget hotels on surplus land available with Railways and Airport Authority of India;

v. Developing strategies for sustained and effective marketing plans and programmes;


    • Maintain and develop the India tourism brand position established with the ‘Incredible India’ campaign;

    • Evolve and maintain a system of market research activities in India’s major source markets to continuously receive, analyze and respond to information on pricing, security issues, health, safety and quality of tourism services & products etc.;

    • Make use of the various technological tools, including the internet, for advertising for greater and wider impact. Further, encourage e-commerce portals to extend effective marketing support to small and medium enterprises and also offer competitive packages.

vi. Developing Human Resources and capacity Building of Service Providers

3.07 The Working Group on Tourism, therefore, felt that in view of the multi-faceted aspects of tourism, Sub-groups may be constituted consisting of experts in different fields to deliberate on identified key segments in a focused manner, and come up with recommendations for accelerating the growth rate in the tourism sector. Accordingly, 9 Sub-groups on the following subjects were constituted by the Working Group:



    1. Product Development and Domestic Tourism;

    2. HRD and Capacity Building;

    3. Development of Infrastructure and Destination Management;

    4. Publicity and Marketing;

    5. Access and Connectivity and related issues;

    6. Taxation, Incentives and Concessions;

    7. Heritage and Culture Tourism;

    8. Monitoring, Research & Statistics;

    9. Sustainable Tourism, Eco-Tourism, Wild life Tourism and Adventure Tourism.

3.08 The reports of the Sub-Groups were considered by the Working Group in its second meeting, and subject-wise final recommendations of the Working Group are made in the following chapters with proposed outlays.

------

CHAPTER -- 4

Development of Infrastructure and Destination Management
4.01 Infrastructure Development and Destination Management hold the key to India’s sustained growth in the tourism sector. At the operational level, it is the quality of infrastructure that can provide the critical connectivity between the tourism product and the target market for both domestic and international tourists.
4.02 The creation of tourism infrastructure has had its multiplier effect in terms of overall economic growth, employment generation vis-à-vis investment and the preservation of art, culture and heritage. Tourism projects in underdeveloped areas have helped in the creation of roads, telecommunication, medical facilities, among others.
4.03 Tourism sector projects that are capital intensive, such as Destination Development (roads, signages, relocation of commercial establishments, lighting, guest facilities, local transport links, landscaping, management office space, parking etc), remain commercially non-viable and require government funding. It is however necessary that such infrastructure is created with utilization of the professional expertise of architects, landscaping experts and is then privately managed through a transparent process. Other projects such as setting up of hotels, convention centres, golf courses, tourist trains, etc. normally have substantial gestation periods and become economically viable over periods exceeding 12-15 years. In order to attract tourists, it is necessary that these facilities are created to a sufficient extent through private initiative with the Government acting as a facilitator and catalyst apart from part funding such projects.

4.04 In the last 4-5 years, paradigm shifts in tourism planning and development have yielded quantum increases in tourist footfalls. During the 10th Five Year Plan, the Ministry of Tourism has focused on infrastructure development in certain key destinations–Ajanta-Ellora, Bodhgaya-Rajgir-Nalanda, Kurukshetra, Mahabalipuram. An integrated approach with all backward-forward linkages was adopted in these destinations. This has yielded larger tourism volumes and revenues, thereby contributing significantly to the national economy and the rural sector in particular. This thrust for infrastructure development has been achieved in combination with care for the carrying capacity of destinations, visitor satisfaction and local community sensibilities.

4.05 In the 10th Five Year Plan, the eight schemes providing Central assistance for tourism infrastructure development from previous plan period, were merged into following two schemes:


  1. Integrated Development of Tourist Circuits.

  2. Product/Infrastructure and Destination Development.

Recognising the need to regulate tourism product development, these two schemes were further merged into one scheme for Product/Infrastructure Development for Destinations and Circuits with the following components:

A) Major Destinations and Circuits development



B) Rural Tourism infrastructure development
4.06 After detailed deliberations, the Working Group felt that resources are still being spread thinly across States. For instance the year-wise number of Destinations and Circuits taken up during the 10th Plan is very large(Destinations-366; Circuits-151), and many of them have not made much of impact. Pending evaluation of the scheme, as being carried out by the Ministry for making the schemes more effective, it was felt necessary by the Working Group to recommend revision of the Schemes with focus on attaining the world’s best standards through:

  1. Improvements in the existing tourism product.

  2. Development of new tourism products.

  3. Integrated infrastructure development of the tourist sites.

4.07 The following broad recommendations were made:
Tourist sites and destinations should be carefully selected on the basis of their tourism potential. The aim should be to provide all infrastructure facilities required by the tourists within such destinations and circuits. Master Planning of these destinations and circuits will then enable their development in an integrated holistic manner.

Achieve convergence of resources and expertise through coordinated action with State Governments/UTs and the Private Sector.

The Ministry of Tourism should prepare a panel of 10-12 outstanding Architects/Consulting Agencies with sensitivity towards conservation, preservation and aesthetics aspects. The Master Plan for these destinations and circuits should be prepared by these professionals and the project implementation constantly monitored by them.
Ministry of Tourism should select only 10 major Destinations and 6 Circuits (North, South, East, West, Central and North-East) on an annual basis.
The maximum amount sanctioned under the Scheme of development of destinations/ circuits should be raised to Rs 50 crores for Destination Development and Rs 100 crores for Circuit Development.
The infrastructure development for selected destinations and circuits could be taken up as a Centrally sponsored scheme with assistance to identified agencies of States and also as a Central Sector Scheme for the works related to monuments and other places under the control of Central agencies like ASI, Port Trust Authorities, etc.
The sustainable maintenance and operational plan for the assets created through Tourism Development Authorities/ Private Sector should be inbuilt into the project proposal. The implementation of these projects should be centrally driven and constantly reviewed and monitored.
Selection of rural sites for Rural Tourism projects should be based on their core-competency and not merely on the basis of projects received from State Governments.
A panel of professionals should be identified for selecting the rural sites, interacting with the community and preparing projects based on tourism potential of the rural site.

No rural tourism project should be sanctioned without prior approval of the software (capacity building) component. This will ensure that the host rural community plays a critical role in project implementation and self-help groups are constituted for the project of the rural site.

Flexibility should be given to District Level Committees in selection of the hardware (infrastructure) component of the rural tourism projects; and it should not be entirely decided by Ministry of Tourism.
It may be considered whether implementation of rural tourism projects is achieved through the State Tourism Directors/Commissioners rather than District Collectors for better marketing of the rural sites.
Project implementation in the existing rural sites should be closely monitored with the objective of ensuring success.
Not more than 100 rural sites should be selected during the 11th Five Year Plan. These sites should possess well-recognized core strength.
Services of professional agencies should be utilized to structure projects so that risks are well apportioned between private sector and government.
The Large Revenue Generating (LRG) Scheme needs to be broad based with higher outlays of 50% promoters’ contribution upto 25% of project cost or Rs 50 crores, whichever is lower. This will ensure that the tourism sector in India attracts private sector participation in projects like Cruise Terminals, Cruises in Lakshadweep, Andaman & Nicober Islands, Skiing Villages, Private Trains and Golf Courses.
The Viability-Gap Scheme of the Ministry of Finance needs to be fully leveraged for attracting private sector participation in tourism projects. The already announced Convention Centres have not made headway on account of the States failing to act as key drivers. The Central Government needs to push the States to convert each such Convention Centre into an operational reality within 15 months failing which Central Government should move to alternate locations in other States.

A series of “Investors Meet” should be held by Ministry of Tourism in key metros and in international centres. This should be done after specific projects have been identified and the broad contours of the project are drawn up.

Make use of environmental resources that constitute a key element in tourism development, maintaining essential ecological processes and helping to conserve natural resources and bio-diversity.
Respect the socio-cultural ethnicity of host communities, conserve their built and living cultural heritage and traditional values, and contribute to inter-cultural understanding and tolerance.
Ensure viable long-term economic operations, providing socio-economic benefits including stable employment and income-earning opportunities and social services that are fairly distributed to all host community stakeholders, thereby contributing to poverty alleviation.
The States should enact a Conservation and Preservation Areas Act on the lines of the Kerala Tourism Conservation and Preservation Areas (2005) Act. This will enable them to declare areas which are important from the tourism viewpoint as ‘Special Tourism Zones’ for the conservation, preservation and integrated planned development of such areas. Such an Act would also enable preparation of Sustainable Tourism Development Plans including guidelines to regulate development activities in the Special Tourism Zone, entailing:

(a) Policy for land use plan and allocation of land for tourism purposes.


(b) Policy for built-up area and environment including architectural form.
(c) Strategies towards conserving and strengthening existing natural systems and enhancing visual qualities of the region.
(d) Regulations found necessary for implementation of the Tourism Development Plan.

The Ministry of Tourism should sponsor a programme for Certification for Sustainable Tourism (CST) in order that sustainable tourism businesses are clearly identified. This may also provide the incentive for non-sustainable operations to seek Certification. In addition, international endorsements can also be encouraged such as ISO-14000 series for environmental care and ISO-9002 for service quality.

Destination Management needs attention and coordination at the 27 World Heritage Sites in the country which are impacted by increasing numbers of visitors and are also subject to a number of regulatory authorities.
The following may be defined as infrastructure facilities under Section 80-1A of the Income Tax Act:

- 3 Star and above Hotels.

- Heritage Hotels classified by Ministry of Tourism.
- Convention Centres with integrated exhibition facilities
- Time Share Resorts and Apartment Hotels classified by Ministry of Tourism.
- Theme Parks
- Amusement Park
- Integrated Destination Development Projects with Hotel facilities and Golf Centres.
- Rural Tourism Projects
- Cruise Liners for Tourism operating in Indian Rivers and Oceans
- Adventure/Nature Tourism Projects
- River cruise projects
- Air Taxi Services (12 seater/1 hour flights)
It is necessary to also develop and strengthen the linkages with other sectors such as Civil Aviation, Railways and the Road and River Transport.




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