Research & Commentaries
TOURISM – BOOSTING INDIA’S ECONOMIC REVIVAL
India’s tourism industry is intricately woven with both the nation’s prosperity and its citizen’s well-being. With SARS-COVID scything across the economic and social landscape of India, tourism has been the first sector to suffer and it will be one the last to recover, if at all. India’s economy contracted by 23.9 per cent in the first quarter of 2020-21 Q-o-Q, and, if the prognosis of the World Bank is correct, India’s GDP will further contract by 9.6 percent this fiscal. Small wonder then that the RBI has identified the tourism sector as one among the 26 most stressed industries in India post-COVID onset. With this sector contributing 9.2 percent to the nation’s GDP and employing 8 percent of all people (five crores) directly or indirectly, with its potential for earning forex and investment, tourism is not only essential for the economic revival of the nation, but it’s also critical for it.
COVID has created an unprecedented crisis for the tourism sector. The entire ecosystem wracked by social distancing phobias and an aversion to travel and leisure stays by people at large. Right from airlines to destinations, from tour operators to transport agencies and tour guides, or even street food vendors and upscale eateries, all have been forced to take this debilitating assault head-on. While the economic impact of tourism attrition is severe, social sundering is even worse. For instance, the job losses amongst the youth are one of the highest in this sector since tourism hugely employs the young, the newly qualified, and the inexperienced youth in profuse numbers. Unfortunately, the continuing unmitigated stress in this sector has made what was once a blessing, a curse. For the youth, job losses are higher and the other attendant long-term severities even more so. This is a vicious cycle of low investment leading to fewer jobs and then to stunted economies.
Clearly, for the economic revival of the country, tourism’s revival is a must. And for revival, survival is an absolute pre-condition. If done right, the sector can double its employment once the impact of CLOLVID ameliorates. It can even increase its share of GDP input to 12 percent and achieve an economic footprint of no less than US$ 500 billion as India races to becoming a 5 trillion-dollar economy. But can this be done? The short answer is, yes. And there are a number of ways of getting there. For starters, government intervention is a must. Initiatives such as ‘One India-One Tourism’ policy should be implemented right away. Steps such as the recently announced government employees’ LTC cash vouchers and interest-free advances for travel are great news. In addition, tax rebates should be given for individuals to spend on domestic tourism, and corporates should be given GST relief for domestic MICE events. Steps such as zero visa fees, a working Incredible India strategy, and the mobilizing of National Investment and Infrastructure Fund (NIIF) to offer patient capital to the industry will be very effective.