The Federation of Associations in Indian Tourism and Hospitality (FAITH) today issued a statement in view of the recent order of the Supreme Court of India, dated March 31st 2017 clarifying that the directions issued by the court cannot be read down so as to apply only to shops involving sale of liquor situated within 500 metres of national or state highways.
FAITH reinstated that the Indian Tourism & hospitality industry – a people intensive industry, respects, honours and commends any judgement which upholds the safety human lives, from road related mishaps or otherwise. As Indians first, we are grateful for a highly functioning legal and governance system which advocates our safety & security.
In respect of the above, FAITH pointed out the following:
❖ Establishments approved under the tourism category, (hereafter called ‘establishments’) exist primarily for lodging, conferencing, meetings, banqueting & dining out experiences which include liquor service as part of this overall experiences as listed above. None of these ‘establishments’ are licensed for, nor practice, nor promote sale of liquor to be consumed outside of them. The establishments employ more than 5 crore people directly & indirectly impacting the living conditions of their almost 20 crores family members. At the recently concluded inauguration of the tunnel connecting Jammu & Kashmir, the honourable Prime Minister urged the youth to choose between terrorism & tourism. Displacing such a larger population from tourism jobs will run the risk of a nationwide unemployment roughly estimated at a million plus with the consequent risk of pushing this working population towards undesirable activities to earn their & their dependants’ livelihood.
❖ Almost 9 million tourists visit India, resulting in almost 27 million foreign visitations across Indian states. These along with ~ 1.8 bn domestic visitations frequent a significant portion of these ‘establishments’ as guests. All of this will be put to risk if the overall food & beverage experiences are compromised at such legitimate establishments which pay direct & indirect taxes & levies to both the central & state governments. After decades of independence, India despite all its natural geographic & cultural heritage still has only 0.67% of the tourism market share which will get reduced drastically further if this happens.
❖ A major reason for meetings, conferences, corporate events, weddings & exhibitions to be held at such ‘establishments’ in India is to combine them with social get together which includes food, beverage & entertainment experiences. India has less than an estimated 0.5% of the world share of this sub-sector of tourism which will see large scale cancellations. That has already started happening. Tourists who bring in $20bn + forex earnings will reduce their coming to India & a large number of Indians will increasingly prefer travelling out of India for such events leading to a major outflow of foreign exchange.
❖ Most of the entrepreneurs who bid as part of Government PPP tourism projects along national & state main roads & highways had modelled their cash inflows on these experiences considering room conferencing, food, beverages revenues over their concession periods. But a lot of these ‘establishments’ with reduced business will result in distressed financial assets & may lead to a large scale NPA situation for our banking & financial system and may severely impact the investment climate in tourism & hospitality & overall business environment in India.
❖ Developed countries such as USA have built their significant tourism growth starting from their iconic proven model of highways led tourism development. USA gets around 2 billion domestic tourism implying 8 trips per citizen & ~ 70 million foreign tourists. As compared. India gets 1.1 domestic tourism visits per citizen & just ~ 9 m tourists. Indian tourism’s hopes of highways driven tourism model will come to a standstill & will regress Indian tourism if such ‘establishments’ will cease to be tourism venues.
❖ We see a huge concern of liquor bootlegging & it’s emergent social evils of a black-market economy & a corruption driven parallel economy which the governments are trying so hard to battle & weed out of our system.
❖ Even states collectively, across India will run the risk of losing revenues which could run upto an estimated 1lakh crores.
❖ Each human life matters & there is no justification for any fatality caused by negligent driving drunken & otherwise. The whole tourism & hospitality industry appreciates the TV campaign undertaken by Ministry of road & surface transport which discourages drinking & driving & pleads that its ‘establishments’ don’t sell liquor for takeaway.
❖ India’s Tourism, Travel & hospitality is estimated to contribute to ~ USD200 Billion, ~ 9.5% of Indian GDP, around 5crs employment, I.e. ~ 9% of Indian employment, ~ USD$ 30 billion+ investment at ~ 5.5% of total capital investment in India. This capital investment is immobile & cannot be relocated or picked up & moved driven by decisions which challenge their business models on a retrospective basis.
❖ The tourism industry severely criticises the core issue of drunken driving, be it in city roads or on highways. The industry will support all move to promote responsible driving including responsible policing along all our roads & highways to prevent drunken driving which has happened anywhere, anytime or from anyplace.
❖ However the tourism industry requests that on a retrospective basis any damaging impact on investments in fixed capital assets & on large scale employment should be re-considered while strictly ensuring enforcing through effective policing for the very noble social cause & goal of preventing ‘drunken driving with zero tolerance.
