The role of tourism in indian economy
- 1. The Role of Tourism In Indian Economy Nitesh Kumar Mishra M.com (Business Management 2016) Dayanand College, Ajmer An Overview Tourism is a major social phenomenon of modern society. Tourism is now one of the world’s largest industries and one of its fastest growing economic sectors. Tourism is the activity of travelling to a place for pleasure and a tourist is a person who is supposed to leave his/her hometown (permanent place) on temporary, basis for the purpose of seeking new experiences, having fun & entertaining, doing sports, seeing cultural & historical places (attractives) etc. On the condition that he/she should stay no less than 1 day and no longer than 12 months, make use of a tourist facility for accommodation and spend his/her own Money through their holiday. Tourism helps the visitors to get acquainted with the culture, customs and conventions, language and mode of living of the local people. Tourism thus liberalizes their mind and helps the people to strengthen the bonds of friendship, international understanding and co-operation. Tourism can be :- (i) International Tourism: An international tourist crosses the boundaries of many countries, uses different currencies, 1 faces different languages and meets different types of people. Usually international tourism involves longer distances although crossing small countries or travelling in the neighbourhood of international borders may involve short distances. (ii) Domestic Tourism: It is concerned with travelling within the country. It does not need a passport and visa or conversion of one currency into another. Domestic tourism has greater scope in countries of large dimensions such as India as compared to smaller countries. From a geographical viewpoint, domestic tourism may range from local excursion, regional trips to national level travels. 1. M.com (Business Administration) 2. MBA(First Year) Vardhman Mahaveer Open University
- 2. Role Of Tourism In Economy : For many countries tourism is seen as a main instrument for regional development, as it stimulates new economic activities. Tourism as an industry is the largest in terms of revenue generation as well as an employer in the world. It plays a very significant role in accelerating the pace of economic development by generating employment opportunities, enhancing social progress and strengthening communities, encouraging the protection of environment and contributing actively to conservation. Tourism may have a positive economic impact on the balance of payments, on employment, on gross income and production, but it may also have negative effects, particularly on the environment. Unplanned and uncontrolled tourism growth can result in such a deterioration of the environment that tourist growth can be compromised. Tourism In India Tourism in India has a strong relevance to economic development, cultural growth and national integration. As mentioned earlier, India is a vast country of great beauty and diversity and her tourist potential is equally vast. With her rich cultural heritage as superbly manifest in many of the architectural wonders (palaces, temples, mosques, forts, etc), caves and prehistoric wall paintings, her widely varied topography ranging from the monotonous plains to the loftiest mountains of the world, her large climatic variations ranging from some of the wettest and the driest as well as from the hottest and the coldest parts of the world, beautiful long beaches on the sea coast, vast stretches of sands, gregarious tropical forests and above all, the great variety of the life-style, India offers an unending choice for the tourist. Tourism is the largest service industry in India, with a contribution of 6.3% to the national GDP in 2015 and supported 37.315 million jobs, 8.78% of its total employment in India. India witnesses more than 5 million annual foreign annual tourist arrivals and 562 million domestic tourism visit. (a) Currently there are more than 130 preferred tourist destinations in the world. (b) The Taj Mahal alone as one of the Seven Wonders of the World invites over 3 million tourists every year. Foreign tourist arrivals by year Year Number (Millions) % Change 1997 2.37 3.8 1998 2.36 -0.7 1999 2.48 5.2 2000 2.65 6.7 2001 2.54 -4.2 2002 2.38 -6.0 2003 2.73 14.3 2004 3.46 26.8 2005 3.92 13.3 2006 4.45 13.5 2007 5.08 14.3 2008 5.28 4.0 2009 5.17 -2.2 2010 5.78 11.8
- 3. 2011 6.31 9.2 2012 6.58 4.3 2013 6.97 5.9 2014 7.68 10.2 2015 8.03 4.5 Obstacles faced by India in tourism : Our people, who do not have empathy for tourists . They charge exorbitantly for all merchandise and memoirs. Our people, who do not understand importance of maintaining historical monuments in good condition. They litter and they inscribe everywhere at will. Lack of facilities like guides, good hotels (not costly ones), hygienic food and water, information boards etc. Lack of publicity for good tourist destinations among the travellers and also lack of good education to the locals on receiving guests and hosting them. also, lack of publicity on cuisines and cultures. How can we improve: Create awareness of the places of importance, its history or ecological or cultural sensitivity etc among locals as well as tourists. Some kinds of festivals / activities like food festivals, cultural fests, exhibitions etc will help in this front. Train the locals on how to behave with the visitors and how to keep away from places of tourist importance. Provide basic amenities like food, water and shelter. This should be affordable to all and shall be hygienic. Provide good information on the places. Conduct international cultural conventions etc. Objectives of study : 1. Explain the three major economic impacts of tourism on destination areas and how these impacts are measured :- (i) Increasing foreign earnings. (ii) Increasing income (iii) Increasing employment. 2. Describe the strategies to maximize the economic impact of tourism and how tourism’s role in economic development can be analyzed. Research Methodology : Tourism has traditionally acted as major source of income within many developing countries. The huge amounts of investment put into this sector points to the important role it plays in the growth of the economy and the development of economic potential. The primary data has been collected from various journals and articles and the secondary data has been collected from Wikipedia and Ministry of Tourism website. Economic importance of tourism in India :- The economic importance of tourism in India can by no means be underestimated. It benefits the people living in and around tourist centres financially. Fortunately for India, the Ministry of
- 4. Tourism of the central Government and the departments of Tourism of the different State Governments are jointly trying to make all possible attempts to attract the tourists to this country. The Government of India understands the importance of promoting Tourism. Tourist hotels, tourist lodges, dormitories and rest houses are made and maintained by various state Governments to look to the comforts of the tourists. The money spent by the Foreign tourists at hotels and other places helps the local economy. The Natural Tourism Board and the Tourism Finance Corporation of India have been working in full swing to bring about the improvement of tourist centres in India. This will immensely economic benefits to the the regional people. IMPACT OF TOURISM ON ECONOMY: Tourism industry in India has several positive and negative impacts on the economy and society. These impacts are highlighted below. POSITIVE IMPACTS: 1. Generating Income and Employment: Tourism in India has emerged as an instrument of income and employment generation, poverty alleviation and sustainable human development. It contributes 6.77% to the national GDP and 8.78% of the total employment in India. Almost 20 million people are now working in the India’s tourism industry. 2. Preservation of National Heritage and Environment: Tourism helps preserve several places which are of historical importance by declaring them as heritage sites. 3. Developing Infrastructure: Tourism tends to encourage the development of multiple-use of infrastructure that benefits the host community, including various means of transports, health care facilities, and sports centers. 4. Promoting Peace and Stability: Tourism industry can also help promote peace and stability in developing country like India by providing jobs, generating income & diversifying the economy. 5. The Multiplier Effect: The flow of money generated by tourist spending multiplies as it passes through various sections of the economy. 6. Regional Development: The under developed regions of the country can greatly benefit from tourism development. Many of the economically backward regions contain areas of high scenic beauty and cultural attractions. 7. Economic Value Of Cultural Resources: Tourism provides monetary incentives for the development of many local crafts and culture, thus it has an effect on the income of the local artisans and artists. 8. Source of Foreign Exchange Earnings: Tourism is an important source of foreign exchange earnings in India. This has favourable impact on the balance of payment of the country. The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate. Foreign exchange earnings by year
- 5. The Foreign Exchange Earnings (FEEs) from tourism in the country have grown by 23.6% year-on-year during the month of May 2015. FEEs during the month of May 2015 were Rs 8,877 crore as compared to Rs 7,184 crore in May 2014, according to tourism ministry data FEEs from tourism during the period of January- May 2015 were Rs 51,351 crore as compared to Rs 48,302 crore during the same period last year. 9. Promotion Of International Understanding : Tourism can also become an effective tool to develop a better understanding and interaction amongst people of different countries. NEGATIVE IMPACTS: 1. Undesirable Social and Cultural Change: Tourism sometimes led to the destruction of the social fabric of a community. The more tourists coming into a place, the more the perceived risk of that place losing its identity. 2. Increase Tension and Hostility: Tourism can increase tension, hostility, and suspicion between the tourists and the local communities when there is no respect and understanding for each other’s culture and way of life. 3. Creating a Sense of Antipathy: Tourism brought little benefit to the local community. In mostall- inclusive package tours more than 80% of travelers’ fees go to the airlines, hotels and other international companies, not to local businessmen and workers. 4. Adverse Effects on Environment and Ecology: One of the most important adverse effects of tourism on the environment is increased pressure on the carrying capacity of the ecosystem in each tourist locality. 5. Import Leakage: This commonly occurs when tourists demand standards of equipment, food, drinks, and other products that the host country cannot supply, specially developing countries. Year Amount (US $Millions) % Change Amount (₹ Crores) % Change 1997 2889 2.0 10511 4.6 1998 2948 2.0 12150 15.6 1999 3009 2.1 12951 6.6 2000 3460 15 15626 20.7 2001 3198 -7.6 15083 -3.5 2002 3103 -3.0 15064 -0.1 2003 4463 43.8 20729 37.6 2004 6170 38.2 27944 34.8 2005 7493 21.4 33123 18.5 2006 8634 15.2 39025 17.8 2007 10729 24.3 44360 13.7 2008 11832 10.3 51294 15.6 2009 11136 -5.9 53700 4.7 2010 14193 27.5 64889 20.8 2011 16564 16.7 77591 19.6 2012 17737 7.1 94487 21.8 2013 18445 4.0 107671 14 2014 20236 9.7 123320 14.5 2015 21071 4.1 135193 9.6
- 6. 6. Seasonal Character Of Job: The job opportunities related to tourism industry are seasonal in nature as they are available only during the tourist season. 7. Increase In Prices: Increasing demand for basic services and goods from tourists will often cause price hikes that negatively affect local residents whose income does not increase proportionately. Strategies which can maximize the Economic Effect of Tourism 1. Improve access to handicrafts by auditing existing local products, training producers, supporting enterprise formation and expansion; supporting retailing through a craft market and cooperative outlet. 2. Support local tourism enterprise by: 3. encouraging hotels to audit and link with local suppliers; 4. supporting production communities if feasible; 5. strengthening links between handicraft sellers and hotels; 6. Strengthen informal tourism service provision by: 7. supporting guide association, upgrading quality of cheaper hotels and food outlets, providing cultural events and services in town; 8. Replace begging with a system for philanthropy, combined with support to former- beggars and skills training 9. Dealing with Multinational Tourism Companies Hotel and restaurant chains, travel agencies and tour operators Criticized for operating to benefit their own profitability at the expense of destination areas May engage in policies that run counter to national tourism plans Limited opportunities for locals to take management positions Strategies to boost total tourist expenditure and boost the existing financial flows include: Restoring profitability of accommodation sector Balancing demand and supply Continuing diversification out of beach package tourism into higher spending and less-enslaved tourism. Conclusion Tourism industry in India is growing and it has vast potential for generating employment and earning large amount of foreign exchange besides giving a fillip to the country’s overall economic and social development. But much more remains to be done. Eco- tourism needs to be promoted so that tourism in India helps in preserving and sustaining the diversity of the India's natural and cultural environments. Tourism in India should be developed in such a way that it accommodates and entertains visitors in a way that is minimally intrusive or destructive to the environment and sustains & supports the native cultures in the locations it is operating in. Moreover, since tourism is a multi-dimensional activity, and basically a service industry, it would be necessary that all wings of the Central and State governments, private sector and voluntary organisations become active partners in
- 7. the endeavour to attain sustainable growth in tourism if India is to become a world player in the tourism industry. References : 1. Various Journals and Newspapers 2. Website of Indian Ministry Of Tourism. 3. Data collection : www.en.wikipedia.orgs 4. Presentations provided by www.slideshare.net