World Tourism Day 2020: Implications of COVID-19 on Indian Tourism Sector
To other countries, I may go as a tourist, but to India, I come as a pilgrim.Martin Luther King Jr.
Celebrating September 27 as the World Tourism Day 2020, based on the theme “Tourism: Building Peace“, requires introspection of the impact of COVID-19 on the Indian tourism sector along with the remedial steps needed for its revival. The tourism industry contributes more than 5.06 percent to the Indian Gross Domestic Product (GDP) (2016-17). The ongoing pandemic, travel restrictions, and the nationwide lockdowns have brought the entire tourism sector to a standstill. Unlike other sectors, tourism is expected to take a much longer time to recover. The tourism sector was among the first ones to be affected by COVID crisis and will, perhaps, be the last sector to recover post-pandemic.
States, like Haryana Uttarakhand, Rajasthan, Kerala, Himachal Pradesh, Goa, Sikkim and other northeastern states, depend extensively on tourism as a source of state’s revenue. Hence, impact on these states would be much more discernible. Nonetheless, spiritual tourism has the potential to withstand the challenges of the ongoing crisis. The tourism sector has the potential of creating both direct and indirect jobs with a very high multiplier. However, it would be hard to revive the sector unless the people feel safe and secure.
The Indian tourism industry employs 8.75 crore people (12.75 percent of the total employed population in 2018-19), including people from the hospitality industry, tour operators, travel agents, homestay owners, drivers, guides, small traders, artisans, and craftsmen among a host of other service providers. The sector also has strong forward and backward linkages to other sectors such as agriculture, transport, handloom, and FMCG to name a few. Disruptions in the tourism sector have rendered many people unemployed.
Federation of Associations in Indian Tourism & Hospitality (FAITH) has estimated a loss of Rs. 10 lakh crore for the industry due to COVID-19. This will also impact the inflow of foreign tourists, which means a drastic fall in foreign exchange earnings which was close to Rs 2,10, 981 crores in Q1-Q3 2019. The Indian government needs to address the concerns of the tourism sector for a fast revival of the economy.
It has to be noted that the global scenario is completely different. The EU has provided benefits in the form of liquidity support, fiscal relief, and easing of state aid rules for those in the tourism business. Italy has announced a four billion euros bailout package for tourism. The French government, too, has announced an eighteen billion euros bailout for tourism under the “Marshall Plan for Tourism“. Countries such as the US, UK, and Singapore have also started developing plans for tourism revival.
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It is disappointing to see the sorry state of affairs in the Indian tourism sector. The lack of focus on tourism and its conspicuous absence from the recovery package in India is not digestible and is sadly disappointing despite the fact that the government has been paying special attention to the tourism sector for the last six years.
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The tourism sector requires access to credit like all other MSMEs, of which, most vulnerable are the Own Account Enterprises (OAEs). To improve the flow of credit to the tourism sector, it must be included under priority sector lending (PSL). The government of India should consider tweaking norms under tourism infrastructure development schemes so that states may utilize funds under such schemes to develop health and safety infrastructure for ensuring safe tourism. Funds like PRASAD should be used for developing health and safety measures at spiritual destinations of India.
The state governments should look to create a state-run e-commerce platform, replicating the GEM model, which will allow for showcasing and sale of state-specific cottage industry products and provide the necessary market to connect to consumers
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The Swan bird’s strategy needs to be understood, analysed, interpreted and adopted by one and all in the world including India. Swan is a unique bird in the sense that it is capable of drinking milk and leaving water out of the milk-water mixture. This unique capability of Swan is worth replicating by our leaders who matter and decide the fate of people. This trait will help our leaders choose a strategy – a specific time, place, and manner of attack to handle the problem of COVID crisis – for sustainable development and tourism without terrorism.
For the tourism sector, it is necessary to develop a common safety and sanitation standard for hosting and serving its consumers as heroes of the business. The tourism sector should utilize the opportunity to adopt ecological waste disposal practices and adopt environmentally friendly practices in daily routine.
It has to be noted that the Indian tourism sector requires extra efforts and a fresh push for its revival in the post-pandemic era. We should give top priority for the recovery package and focus on foreign tourism, rural tourism, and above all spiritual tourism as it has the highest employment multiplier and acts as a great source of income for the MSMEs to contribute to GDP. India has been receiving 11 million foreign tourists yearly in the pre-COVID era, which is quite small compared to its size and relative potential. India, being home to many religions of the world, including Hinduism, Sikhism, Buddhism, Jainism, has huge potential to become a destination for spiritual tourists. We have to redefine, refocus, and change the current game plan to make India the global destination of tourism.
At last, to reach the destination of life, all of us have to use the ‘Google Map’ of spiritual tourism – a trip to know the truth of the self fearlessly. Fear is a false piece of evidence appearing real!
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About the author
Prof. M. M. Goel is former Vice-Chancellor of JNU Jaipur. He is also known as ‘Needonomist’ (economist for needs) among the fraternity of economists in India.