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As the government gets into the act of robust post covid recovery in the economy, the spotlight is again on a sector with the maximum potential to generate employment – travel and tourism. The government can aptly leverage the G20 Summit 2022, happening closer to home this time, to showcase India's potential in the sector. The Bali (Indonesia) Summit, scheduled later this year, can be used as a launch pad by the Indian government to usher in a new wave of tourism in the country and thus have a huge multiplier effect on several industries and sectors. The Indian government can organise fam trips of the ministers of the G20 member nations all year round, during and immediately after the summit, which will help boost the prospects of the tourism industry in India.
It is an opportune time to redraw the recovery plan for the sector that bore the highest brunt of the pandemic and snatched the livelihood of millions of people in direct and indirect employment. While the share of the travel and tourism industry in the Indian GDP went down to just 5.3 per cent in 2020 from as much as 10.3 per cent in 2019, the scales have started to tilt again. The sector staged a smart recovery in 2021 when the share of the industry in the overall GDP inched to 6.1 per cent in 2021.
Almost 62 million jobs were lost in the sector in the aftermath of the pandemic and the resultant lockdown in 2020. However, there will be an addition of 18 million jobs in 2021 as compared to the previous year. To take this recovery process forward, we must grab the opportunity and promote the sector for further economic growth and employment.
Opportunity within the G20 group
Among the G20 member countries, China, Mexico, India, South Africa and Indonesia are projected to get the lion's share and expand their tourism industry in a significant way. But the need of the hour is to take a substantial stride ahead of these 4-5 countries to clinch the rightful place of India's tourism industry in the global arena.
It is a given fact that a booming travel and tourism industry can have a spiralling effect on various other sectors like food, restaurant, catering and hospitality. The restaurant industry in India can get a sizeable fillip with the growth of the travel and tourism industry in India. The restaurant industry in India employed as many as 70 lakh people in 2019, and there are projections there will be a 9 per cent growth in the food and restaurant industry in the coming years. Given India's vast diversity in terms of cuisines and food items, organising food festivals and establishing food hubs at places close to major tourist destinations will result in further growth in the restaurant sector.
The tourism industry is a significant driver of employment creation for women, migrant workers and young people. It is one of the few sectors that can provide meaningful employment opportunities at the local level and for rural youth. The government will achieve the twin objectives of social development and poverty alleviation through social inclusion and regional integration through the development of this important sector.
Boost to forex earnings
Foreign tourist arrivals account for the country's third largest share of foreign exchange (forex) earnings. Forex earnings from the tourism sector saw around 9.4 per cent annual growth in the 2011 to 2019 period. A further push to the sector can result in much higher forex reserves in India which are of great significance, especially when the global energy and food prices are northward bound.
Data suggests that G20 member nations account for the highest foreign tourist arrival numbers in India. In 2021, Bangladesh, the United States, the United Kingdom, France and Germany took the top five places for foreign tourist arrivals in India. Except for Bangladesh, all the others are G20 members. Now is the time to further push the arrivals from these and other major member nations of the G20. The government of India can work with the tourism ministers of member nations to further ease the norms and do away with redundancies in granting E-tourist and E-medical visas to visitors of these countries.
However, to support a fast-growing travel and tourism industry, the government will have to have a multi-pronged approach and ensure ample skilled labour is available. The government will have to provide vocational education and train the youth. It will also have to improve the sector's working conditions to improve the industry's service quality. There will be a need for institutes and colleges that can impart professionalism and soft skills to the youth to support the industry's growth.
The government will also have to intertwine the development of the travel and tourism industry with the prospects and growth of other related sectors like handicrafts, transport, infrastructure development etc. There is scope for a massive improvement in road and water connectivity in some prime tourist destinations, apart from security arrangements. The government will have to move on a war footing in these matters before international and even domestic tourists come to these places.
As India marches ahead in its dream of having a $5 trillion economy, the emphasis on developing the tourism industry will stand the country in good stead. Besides the economic might that a prolific travel and tourism industry adds to a country, India can also look forward to a more balanced socio-economic growth and cross-cultural accretion of its society, which accompanies a thriving tourism industry.
The writer is the Director General, Federation of Indian Chambers of Commerce and Industry (FICCI)