The Federation of Associations in Indian Tourism & Hospitality (FAITH), a policy federation of all the national associations representing the Indian tourism, travel and hospitality industries, has published a vision document called India Tourism Vision 2035. It aims to position tourism as a ‘Social-Economic Job and Infrastructure creator for India’ as well as ‘to be a role model for creating Sustainable and Inclusive Ecosystem’.
Nakul Anand, Chairman, FAITH and Executive Director, ITC released the India Tourism Vision 2035 on February 16, 2022. The main idea behind this initiative is to ‘make Indian tourism a mainstream engine of socio-economic growth’ and ‘create a shared vision of tourism’ between all stakeholders – centre, state and industry.
According to the document, the global tourism industry has posted a CAGR of over 6% in the last 50 years. It has been the main source of foreign exchange earnings for one-third of developing countries and accounts for up to 40% of GDP in nearly 50% of the least developed countries.
Tourism is the single largest employer in the world with 334 million direct and indirect employment unique potential to fuel employment (both skilled and unskilled workforce) due to low barriers to entry contributing to all strata of society. Women account for 54% of employment in the sector, compared to 39% for the global economy.
Underlining why tourism matters for India, the document stated that the industry provided 87.5 million direct and indirect jobs and accounted for 12.75% of the total jobs created in the country in 2019. It saw 10.93 million Foreign Tourist arrivals and generated $30 billion Foreign Exchange Earnings in 2019. The 2.32 billion domestic tourist visits to states and union territories in 2019 represent a resilient domestic base. It also stimulates the need for critical national and state core and specialized infrastructure and capital expenditure.
According to the statement, the Tourism Vision ‘will lead to the employment of almost 15 crore Indians. From the 5 crore, Indians employed along the tourism value chain may multiply up to 3 times to 15 crores. Directly almost 7.5 crores Indians may get employed by tourism in the public and private sector in hotels, travel agencies & tour operations, tourism transportation, food services, destination management & services which are looking after tourists. Indirectly another 7.5 crores may get employed across the country in ancillary and supporting services in the unorganised sector which are catering to the main tourist service providers’.
The report has identified four strategic pillars to achieving the India Tourism Vision 2035, which includes:
Shared Tourism Vision
– Tourism Exports be treated at par with other exports & services and such transactions may be zero rated for GST without stopping the flow of input credits
– National Tourism Council of PM & CMs
– Registered Tourism service provides with single Centre-State unique id for quality assurance
– All Tourism projects and plans based around Sustainable Design Principles
Value Accretive Regulation
– GST rates 10% with full set-offs on hotels and restaurants and 1% on travel intermediaries and .1% on ticketing, all GST setoffs on fuel, liquor, construction, tourism transportation fees
– Travel credit for domestic travel and MICE
– Single window e – clearance for all projects
– National seamless Tourist transportation
– Single source-verified credits-based Hospitality and Tourism skilling
Investment Driver
– Set up 200 Centres of Excellence across States through Swadesh Darshan and Prasad schemes each with 0.1 mn Foreign Tourists and 20 mn Domestic Tourists leading to 20 mn Foreign and 4 bn DTVs
– Industrial rates in all States on Utilities
– Set up 5 Mega Tourism Zones each with almost 10 mn
– Foreign Tourists and 200 mn Domestic Tourist Visits (DTVs) leading to 50 mn foreign tourists and 1 bn DTVs
– Target almost 1 mn new Hospitality rooms on identified land banks
– Tourism to be declared a critical socio commercial infrastructure
– Create Last Mile Connectivity to all destinations boosting their visitation attractiveness
Market Excellence
– Tourism segments of excellence creating 10% MICE, 20% Adventure, 30% Heritage, 20% Medical, 10% Niche & 10% Buddhist
– Global Tourism Brand Ambassadors in all markets
– INR 5000 crores annual average Tourism expenditure by Centre and equivalent by States
– Double-share of Short Haul International Tourism
– Create a 12-month market of Indian Tourism through targeted market positioning of each season
According to Tejbir Singh, Vice-Chairman of FAITH, the industry needs to be rightfully recognised as an export industry either through SEIS like instruments with 10% duty credit in the new foreign trade policy or zero rating in GST and also 1.8% gst with full setoffs for our tour operators. PP Khanna, President of ADTOI second this recommendation.
Garish Oberoi, Alternate Board Member to FAITH from (FHRAI) Federation of Hotels & Restaurants Industry of India & Treasurer FAITH added that GST rates for hospitality in India are one of the highest in the world. This makes both domestic and inbound tourism in India expensive. “The 18% GST category for hotels above room rates of ₹ 7500 must be abolished and merged with the category of 12% GST. Gradually it should be brought down further below 10% with full set offs in line with global trends,” he noted.
