Relevance: GS III (Indian Economy – Employment & Infrastructure) | Source: The Hindu Business Line
1. The Context: Unlocking Potential
Despite India’s vast cultural heritage, the tourism sector remains underutilized. The article argues that India needs to move beyond marketing slogans (like “Incredible India”) and fix on-ground structural issues to become a $5 trillion economy.
- The Goal: Transform tourism into a primary engine for employment generation and foreign exchange earnings.
2. Key Bottlenecks
- Infrastructure Deficit: While major airports have improved, “Last-Mile Connectivity” to actual tourist sites remains poor. A lack of basic amenities (clean public toilets, safe water) discourages high-spending international tourists.
- Taxation Issues: India’s high Goods and Services Tax (GST) rates (18-28%) on luxury hotels make it expensive compared to competitors like Thailand or Vietnam.
- Regulatory Friction: Complex inter-state vehicle permits and varied state taxes create logistical nightmares for tour operators.
3. Strategic Solutions
- Infrastructure Status: The sector demands “Infrastructure Status” (currently treated as commercial).
- Benefit: This would allow hotels and resorts to access long-term loans at lower interest rates, reducing project costs.
- One Nation, One Permit: Implementing a seamless All-India Tourist Permit system to allow vehicles to move freely across state borders without paying multiple entry taxes.
- Niche Tourism: shifting focus to MICE (Meetings, Incentives, Conferences, and Exhibitions) and Medical Tourism (leveraging Ayurveda and affordable healthcare) to attract high-value visitors.
4. Key Data & Schemes
- High Multiplier Effect: Tourism is labor-intensive. Data suggests that for every ₹10 lakh invested, tourism creates 78 jobs, significantly higher than the manufacturing sector (approx. 45 jobs).
- Schemes:
- Swadesh Darshan 2.0: A shift from “Circuit-based” development to “Destination-based” holistic development.
- PRASHAD Scheme: Focused on developing infrastructure at pilgrimage and heritage sites.
UPSC Value Box
| Concept / Scheme | Relevance for Prelims |
| MICE Tourism | Stands for Meetings, Incentives, Conferences, and Exhibitions. It is a specialized niche of group tourism dedicated to planning business events, often bringing in higher revenue per visitor than leisure tourism. |
| Swadesh Darshan 2.0 | A revamped central sector scheme by the Ministry of Tourism. Unlike the original scheme (which focused on thematic circuits like Ramayana Circuit), 2.0 focuses on developing sustainable and responsible destinations with a tourist-centric approach. |
With reference to the tourism sector in India, consider the following statements:
- The “Swadesh Darshan 2.0” scheme focuses on the development of thematic tourist circuits across the country.
- The tourism sector has a higher employment multiplier effect compared to the manufacturing sector for the same level of investment.
- Granting “Infrastructure Status” to the tourism sector allows access to long-term credit at lower interest rates.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Correct Answer: (b)
Share This Story, Choose Your Platform!
Start Yours at Ajmal IAS – with Mentorship StrategyDisciplineClarityResults that Drives Success
Your dream deserves this moment — begin it here.
