Introspection on World Tourism Day 2020: Implication of Covid for Indian Tourism Sector

Professor M.M. Goel*                                                                                                                                                                  

 (Asian independent) To commemorate World Tourism Day 2020 on the theme ‘’Tourism: Building Peace’ on Sep.27 more than an annual ritual, we need to introspect on the implications of covid crisis for the Indian tourism sector with remedial steps for the revival. It contributes more than 5.06 per cent in the Gross Domestic Product (GDP) and deserves attention of the stakeholders. The on-going pandemic, travel restrictions, and the nationwide restrictions have brought the entire tourism sector to a standstill, and unlike other sectors, tourism will take longer period for recovery. The tourism sector is among the first to be affected by covid crisis, and the last to recover post pandemic. This  have a direct impact on some states including Haryana Uttarakhand, Rajasthan, Kerala, Himachal Pradesh, Goa, Sikkim and other north eastern states which depend extensively on tourism as a source of state revenue. Spiritual tourism has the potential to withstand the challenges of the covid crisis as soul is immortal and death rate is zero. The people have to be sensitised on fearlessness for the revival of the tourism sector with potential of creating job opportunities (direct and indirect) with highest multiplier.

The Indian tourism industry employs 8.75 crore people (12.75 per cent of the total employed population in 2018-19, such as 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 tourism sector have  rendered many people in unemployed. The food and hospitality sector is already reeling under pressure from high fixed costs and no footfalls. FAITH, a policy federation of associations of tourism and hospitality industry has estimated a loss of Rs 10 lakh crore for the industry due to COVID-19. This will also impact inflow of foreign tourists, which means a drastic fall in foreign exchange earnings which was close to Rs 2,10, 981 crore in Q1-Q3 2019. Indian government has to address the concerns of the tourism sector for reviving the economy with potential.

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 and is currently considering a tourism recovery plan. Italy, one of the worst affected by COVID-19, has  announced a 04 billion euros bailout package for tourism and will incentivise domestic tourists to holiday on home soil. The French government too has announced an eighteen billion euros “Marshall Plan for Tourism” bailout for tourism. Similarly, South Africa has initiated a relief package of approximately $11 million exclusively for MSMEs in the hospitality and tourism sector. Indonesia has announced a $725 million stimulus package in order to revive its tourism and civil aviation industry, with additional tax waivers to hotels and restaurants in select regions. Countries such as US, UK and Singapore too have initiated focussed efforts to revive tourism.

Even being an optimist needonomist, I am totally disappointed on 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. Inspite of the fact that the government has been paying special attention to the tourism sector for the last six years.

The tourism sector  requires access to credit like MSMs, of which, most vulnerable are the own account enterprises (OAEs). To improve the flow of credit to tourism sector, we must  include it under priority sector lending (PSL). Furthermore, under the category of MSME for PSL, a separate sublimit for OAEs must be created to ensure that credit flows to the smallest of small businesses. The government of India should consider tweaking norms under tourism infrastructure development schemes so that states may utilise funds under such schemes to develop health and safety infrastructure for ensuring with  minimum chances of transmission of communicable diseases in future. We have to use the funds under PRASAD for developing health and safety measures at spiritual destinations like Kurukshetra. We should consider supporting the hotel and restaurant industry by subsidising their fixed costs. There is case for the applications and renewal of licencing fees to be absolved for two years  for all tourism related businesses. The transfer of licence should be made seamless so as to bring ease of doing business in the tourism sector.

The state governments should consider waiving certain critical charges such as property tax and interstate transport taxes for two years. Electricity and water charges for homestay owners should be billed at residential rates instead of commercial rates. The state governments should look to create a state run e-commerce platforms, replicating the GEM model, which will allow for showcasing and sale of state specific cottage industry products and provide the necessary market connect to consumers. State governments must also think of ways to incentivise domestic tourists to boost local tourism by utilising the LTC scheme to the employees twice a year.

To my mind, Swan strategy needs to be understood, analysed, interpreted and adopted by one and all in the world including India. In my memory lane, Swan is a bird who is endowed with the wisdom of drinking milk and leaving water out of the mixture of milk with water from the utensil. This is unique capability of Swan worth replicating by our leaders who matter and decide the fate of people. Let them understand the chemistry of mixture and compound worth learning from Swan for  choosing a strategy- a choice of time, place and manner of attack on the problem at hand such as management of  covid crisis, sustainable development and tourism without terrorism.

In my humble view, ‘black and white’ is the truth in the form of facts on a  white paper which provides the information and status and needs to be accepted as a watch tower without distinction of colour of swan ( black or grey).

The events are events may be classified as black events which are not known in advance as death which is otherwise inevitable for everyone who has taken birth. It is worth referring a book “Death of Economics” by Mr. Paul Ormirod who has blamed the econometricians and mathematician for making economics complicated. The author has appealed the fraternity of economists to make it simple and not complicated by using econometrics and mathematics.

In my humble view, it is economics as queen of social sciences which unite people where as it is politics which divide people on the basis of religions, castes and regions.

For the tourism sector, it is necessary to develop a common safety and sanitation standard for hosting and serving its consumers as hero of the business. The tourism sector should utilise the opportunity to adopt ecological waste disposal practices and adopt environment friendly  practices in daily routine.

To reach the destination of life, all of us have to use Google map with spiritual tourism as a trip to know the truth of the self as soul fearlessly as fear is false evidences appearing real.

It has to be noted that the Indian tourism sector require double efforts and 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 highest employment multiplier and source of income for the MSMEs to contribute in GDP. India has been receiving 11 million foreign tourists yearly in pre covid era, which is small compared to its size and relative potential. We have to redefine, refocus and change the game plan going forward in Indian tourism sector.

* Former Vice Chancellor and Needonomist Professor living in Kurukshetra. Enjoy surfing the website  www.needonomics.com

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