Make-ing Tourism in India happen…
‘Make in India’ can be that shot in the arm in achieving growth commensurate to India’s tourism potential. While a lot of onus lies on the government, from enhancing destination’s profile, leveraging its inherent touristic appeal to making tourism a competitive proposition; it cannot do it alone without the active participation of the private sector. If Maharashtra is signing 3,500 crore worth of tourism projects at ‘Make in India’ week this month, the campaign’s effect on changes in tourism is beginning to be reflected. However for ‘make in India’ to effect any differentiating changes one has to wait for while…
A new beginning
Last couple of years has witnessed a palpable and unprecedented enthusiasm in the country’s travel, tourism and hospitality sector. The BJP-led NDA government rode to power with a ‘clear’ mandate, first time in 30 years, on Narendra Modi’s 5T vision to build ‘Brand India.’ Modi’s 5T vision included Talent, Tradition, Tourism, Trade & Technology. It was for the first time that ‘Tourism’ became part of the debate in the country’s national electoral agenda. And then, he was also talking about building ‘Brand India’, another significant electoral overture with a very strong tourism connotation.
Then came the path breaking and the biggest announcement of ‘Make in India’ initiative, a massive campaign designed to be the springboard of government’s effort to give a boost to manufacturing across 25 odd sectors including two, ‘tourism and hospitality’ and ‘wellness’, that has since been also resonating well with country’s tourism sensibilities. This was year 2014.
However, about a year and half after the initiation of ‘Make in India’ campaign, some of that enthusiasm is definitely being seen as beginning to wear, particularly in the last six month as it began to emerge that 2015 would be one of the worst years for the country’s inbound tourism with a segments of travel trade in severe distress today. Ironically, and despite the country’s tourism mainstay being the domestic sector, it has been the inbound that is considered the barometer of India’s tourism health.
Tourism’s effect on the country’s socio-economic life is humungous. It creates employment more than any other sector after construction. It’s benefits reaches the hinterland. Large numbers of women find employment in this sector. These are some of conclusions that Planning Commission reached a few years ago when it identified tourism sector as a vehicle for national growth, development and employment generation.
According to WTTC (World Travel and Tourism Council) estimates tourism sector directly accounts for 23 million or 5.5 per cent of total employment in India and increases to 36.6 million or 8.7 per cent if indirect jobs are also included. In terms of GDP contribution of travel and tourism, WTTC pegs it at INR 7,642.5 billion or 6.7 per cent in 2014. This is expected to rise by 7.3 per cent annually to INR 16,587 billion in 2025, accounting for 7.6 per cent of GDP and generating 45.5 million jobs or 9 per cent of India’s total workforce.
The Planning Commission’s 12th Five Year Plan says that “the tourism sector has a major role to play to promote a faster, sustainable and more inclusive economic growth. It has better prospects for promoting pro-poor growth than many other sectors.”
300 years ago Iron Smith one of the founding economist said that “You have to convert your competitive advantage in to your competitive advantage.”
“India is rated 12th in the world for its natural assets yet we are 56th in the world for our tourism competitiveness. In this rating of 56, one of biggest rating that pulls us down is the rating of 110 on government prioritisation of tourism. This is the rating of 140 countries. Unfortunately that’s the irony. We have assets but those are not being converted into competitive advantages,” laments Aashish Gupta, CEO, FAITH.
Make in India’s eventual goal is to bring self-sustained, self-reliant prosperity to Indian economy. For as much as ‘Make in India’ is an opportunity for the travel and tourism sector’s growth, the opposite also holds true.
‘Make in India’ and Tourism
SATTE 2016 brought together a power-house panel discussion representing six senior state tourism representatives, a seasoned tourism consultant and a globally reputed travel professional and campaigner to steer the discussion. Opening the discussion Rajeev Kohli, Vice President, IATO & President, SITE, while lauding the ‘Make in India’ initiative wondered over Make in India’s inherent manufacturing tone and tourism’s service nature and how the two fit. “When you use ‘Make in India’ for tourism; beyond setting up hotel, roads and infrastructure, rest sometimes a little fuzzy for us at least in the private sector,” he wondered effectively throwing his first question to the panelist as to how do they see ‘Make in India’ and it’s fit for ‘tourism’ given that tourism is services?
“On the face of it ‘Make in India’ is essentially for the manufacturing sector,” agreed Hari Ranjan Rao, Secretary – Tourism, Government of Madhya Pradesh and MD, MPSTDC. He, however, also added that if you have successful Make in India, tourism cannot stay behind. “They will have to walk hand in hand. If you look at the definition of a tourist as per the UNWTO language, anybody who moves out from his normal place of resident for more than 24 hours, is a tourist. So if you have a good flourishing and thriving ‘Make in India’, tourism will be its instant and immediate beneficiary. You don’t have to make something in tourism but ‘Make in India’ and tourism will always go hand in hand,” he added.
Suggesting an element of confusion between ‘Make in India’ and ‘tourism’, M T Nandi, MD, Chhattisgarh Tourism Board, contrary to what Rao suggested, opined that for some states like Chhattisgarh its actually ‘Make in India’ that follows tourism. Nandi suggested that tourism brings awareness about the destination and its natural resources and strategic advantages that in its wake will make ‘Make in India’ flourish.
According to Nikhil Desai, MD, Goa Tourism, “As the ‘Make in India’ story gets stronger and stronger what we would be witnessing is a very high level of business visitors to the country, which essentially means a much larger number of inbound coming into the country. The two are inextricably linked.” He, however, also agreed with Nandi pointing to the need of strong home grown brands of global repute that will not only make India stand out as a destination but also give impetus to ‘Make in India’ campaign.
Maharashtra that will host ‘Make in India’ week from February 13-18 this month is probably one of the biggest and first major beneficiary of the new campaign for its tourism sector. “Because of Make in India campaign several new things are coming up in Maharashtra. I have received 34 proposal totaling Rs 3,500 crores, MoU for which we will be signing during the Make in India week. For wellness, we have about Rs 800 crores investment proposals under ‘Make in India’ campaign near Mumbai,” informed, Satish Soni, Director of Tourism, Government of Maharashtra & Jt. MD, MTDC.
In an unusual offbeat remark, Mahmood Ahmad Shah, Director – Tourism, Kashmir, commented that Make in India to him is “the feel and warmth of the place” that India offers. “It’s a feeling that no other country can provide. And this is unique to India,” he said. He also highlighted Gulmarg Gondola, Skiing in the Himalayas, commissioning of Tulip garden, a Make in India product that has helped prepone the tourism season.
For tourism to grow you need certain basic infrastructure like transportation, quality accommodation etc. However, in India what we normally see is that reaching the destination itself is a task. “The problem could be the roads, railways, poor or slow transportation as a result people are not drawn to go to those places. It is very easy for Indians to go to Singapore or other countries and visit all sorts of places but it is very difficult to go to say Diu from Sasan or Gir National Park. And because Make in India is an investment call, the effect will be on transportation, accommodation and on experiences. All of these things will finally add up to the development of tourism,” pointed N. Srivastava, Commissioner of Tourism and Managing Director, Gujarat Tourism
He said that Gujarat is home to India’s longest coastline about 1600 kilometers. Despite that there is not a single place where you can enjoy water sports. Small places in the world like Mauritius, Singapore and others have extremely good water sports developed. He said that this is an area of opportunity under ‘Make in India.’
Challenges galore
Kohli says that while working with different State Governments that intentions are always there, the passion is unquestioned, yet as a country we are not delivering global experience. “The fact is we are an incredible destination, we are an incredible country, there is no doubt about that but we are not an incredible tourism product as yet. Why does Taj Mahal still suffers with a road with trash on it? What is it that we are not getting right? Is it the way our law and rules are that states can do much? Is there something that the private sector needs to chip in with? What are the challenges?
Srivastava says that the government alone cannot do everything in a big country like India. “The role of private sector is there and is visible also in tourism sector. However, where it is not visible is probably in maintaining cleanliness or maintaining a toilet on the highway. When you visit a place like Dwarka or a beach you find there is litter thrown everywhere. You have not spent so much of money to come to that place to see litters strewn everywhere,” he said while pointing to the need of civic etiquettes and awareness to be developed.
In case of J&K, Shah pointed to the lack of investment and incentivisation of the tourism sector. “Desired amount of investments have not flown in to the tourism sector as a result facilities are not commensurate with international standards. The second inhibiting factor which I see is the lack of quality manpower. The staff down below is not trained. The passion about things is not there and more so we lack collective emancipation and collective realisation that we need to keep our environment clean, we need to provide quality services. Unless and until we attain that level we will be lagging in quality services,” Shah said.
Soni identified the root cause as “lack of integrated approach.” He said in many a state ‘tourism’ is not a priority. He says, for example, whereas Maharashtra has a different policy for tourism, states like Goa and Kerala have different CRZ relaxation. We have good coastline but our CRZ is not like that of Goa, and therefore we cannot compete with Goa. He also said that there is serious gap in tourism spending as he mentioned that as a country we earn about Rs 124,000 crores as foreign exchange but the centre is spending about Rs 1000-1200 crores.
Desai pointed to an interesting trend that has challenged the sector on occasion. He said that we are an extremely vocal democratic country, active civil society with active judiciary. People can actually blame the government all and sundry and yet get away with it. I think this is one good thing to have. But on the other side of it this kind of vocalism puts public service in spot of bother.
“We wanted to spend a good amount of money on infrastructure development in one of our coastal villages. This was challenged in one of the green tribunals and the project had to be shelved. There was a will, there was a plan, there was fund but because of the overactive civil society and judiciary the project got nowhere. These are the challenges that one usually tend to meet. But one has to overcome. I think this is the price one pays for a vibrant democracy,” he rued. Desai also pointed that there is need for some of the laws also to evolve, become more progressive and be attuned to reality.
While flagging safety and security concerns Nandi indicated that there are times such concerns are unfounded or overhyped.
Way forward
According top priority to the tourism sector and this coming right from the top is key to unleashing tourism’s potential vis-à-vis Make in India. “If tourism is considered as an economic activity and generator of economic wealth then it has to be a top priority of the government. In MP, the chief Minister knows the power of tourism and therefore he has retained the portfolio of tourism himself and is the Cabinet Minister of Tourism. When it becomes the priority of the government, everything else starts falling in line. So it’s no coincidence that consistently we have been doing good in marketing and coming up with new tourism products. In fact, MPSTDC hotels are one of the best in the country. That’s because of the priority,” Rao added.
Gupta says one of the first things which need to be addressed at the national level is taxation. “The rate of indirect taxation on tourism is 18-22 per cent. We are perhaps the only country in the world with such a high rate of indirect taxation. Everywhere in the world rate of indirect taxation on tourism is either zero or less than 5 to 7 per cent. For India to be successful, the GST rating on India tourism needs to be below 10 per cent. If for some reason tourism is classified over 10 to 20 or 20 plus, India is going to be completely uncompetitive on the world tourism scale,” he warned.
Soni informs that the soon-to-be-launched new Maharashtra State Tourism Policy is also being tweaked, developed and co-related keeping in mind the ‘Make in India’ campaign. He said that the state’s increasing tourism thrust involves a range of tourism products involving heritage, adventure sports, water sports, beach tourism, Bollywood and shooting (Film tourism) and developing the right infrastructure, many of which will materialise at the upcoming Make in India week.
Meanwhile Goa is also working on a tourism master plan keep in mind the ‘Make in India’ campaign. “This master plan is now being chalked out for the next 25 years. In the master plan we are going to every village to understand their specialty like what should be nurtured. I think one of the best ‘Make in India’ or ‘make it in our own state’ is our very own cultural ethos that can be packaged in a very unique experiential form of tourism,” Desai said.
