Parliamentary panel flags low fund use by tourism ministry, seeks reforms

Parliamentary panel highlights sharp underutilisation, recommends quarterly spending targets and a dedicated promotion board to boost tourism marketing

The Parliamentary Standing Committee on Wednesday made a series of recommendations to the Ministry of Tourism, including establishing a mandatory quarterly spending schedule to ensure proper utilisation amid significant underutilisation of allocated funds.

 

Flagging underutilisation of funds by the Ministry of Tourism in a report tabled in the Rajya Sabha, the Department-related Parliamentary Standing Committee on Transport, Tourism and Culture stated: “The Committee notes with concern the exceptionally low fund utilisation during 2024–25, where the Ministry could spend only ₹164.07 crore against a Budget Estimate of ₹2,479.62 crore, representing a utilisation rate of 6.6 per cent. Even measured against the Revised Estimate, utilisation stood at only 19.3 per cent.”

 

Further, actual expenditure under the Swadesh Darshan scheme in 2024–25 was ₹59.25 crore against a Budget Estimate of ₹1,750.00 crore, representing a utilisation rate of 3.4 per cent. The committee also pointed to the Ministry’s tendency to concentrate expenditure in the final quarter.

 

“The committee recommends that the Ministry implement a mandatory quarterly expenditure schedule targeting a minimum of 20 per cent utilisation in Q1, 25 per cent in Q2, and 30 per cent in Q3, to prevent end-year concentration,” the report stated.

 

The Ministry has also been asked to establish, within three months, a digitalised utilisation certificate submission portal with defined timelines and automatic escalation to State Chief Secretaries upon breach.

 

Taking note of the lack of provision of funds for international and domestic marketing and promotional activities under the Demand for Grants 2026–27, the committee recommended setting up an India Tourism Promotion Board — a dedicated body bringing together the government, State tourism departments, the hospitality industry, civil aviation stakeholders, and the private sector — which will provide a stable institutional platform for coordinated, professionally managed destination marketing.

 

“The absence of any budgetary provision for the promotion of Indian tourism constitutes a serious deficiency in the budget formulation process. The Committee recommends that the Ministry take immediate steps to secure the required allocation through appropriate budgetary means, including a Supplementary Demand, and ensure that a structured multi-year promotional budget is established from the next financial year onwards,” the committee noted.

 

Meanwhile, the Ministry of Tourism raised the issue of a shortfall in the allocation of funds for the PRASHAD scheme. It had projected a demand of ₹2,656.44 crore for 2025–26 but received an allocation of ₹2,541.06 crore, resulting in a shortfall of ₹115.38 crore. The PRASHAD scheme was the only component that received an excess allocation of ₹40 crore.

 

Taking note of this, the committee observed that while the Ministry has highlighted shortfalls in allocation from the Ministry of Finance, its inability to utilise even the reduced allocations weakens the basis for seeking higher provisions.

 

Noting that the credibility of future demands is contingent upon demonstrating sustained improvement in absorption capacity, it recommended that any future projections to the Ministry of Finance “be accompanied by a detailed expenditure performance statement for the preceding three years, along with specific measures proposed to improve utilisation,” the report added.