IJMBA, 2012; Vol 2 (3): July 2012 (044 – 051) International Standard Serial Number 2230 – 8393

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ROLE OF TOURISM INDUSTRY IN ECONOMIC DEVELOPMENT OF INDIA

Dr.S.K.Khatik*1, Amit Kr Nag2

¹Professor and Head Department of Commerce, Dean of Commerce and Chairman, Board of Studies,
Barkatullah University, Bhopal.
2
Assistant Professor, Department of Commerce, The Bhopal School Of Social Sciences. (BSSS)

ABSTRACT
This paper attempts to evaluate role of tourism as one of the service Correspondence to Author
industry in India and its impact on the overall economic development of
the country. Tourism industry in India is growing and it has vast potential Dr.S.K.Khatik
for generating employment and earning large amount of foreign
exchange besides giving an impetus to the country’s overall economic Professor and Head
and social development. It has become the fastest growing service Department of Commerce,
industry in the country with great potentials for its further diversification Dean of Commerce and
The main objectives of this paper is to study the role of Tourism in Chairman, Board of Studies,
development of multiple-use infrastructure that benefits the host Barkatullah University,
community, including various means of transports, health care facilities, Bhopal
and sports centers, in addition to the hotels and high-end restaurants
Email:
that cater to foreign visitors. The development of infrastructure has in
turn induced the development of other directly productive activities.
However, there are pros and cons involved with the development of
tourism industry in the country. This paper makes an attempt to provide
an in-depth analysis about the significant development as well as the
negative and positive impacts of tourism industry in India.

Keywords:
Tourism, Demand; Foreign Exchange; Forecasting

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INTRODUCTION systems that are practiced in the country.

Adventure tourism pushes for development of
Among the various service industries, tourism in
outdoor recreational activities. As the industry
India is the largest and fastest-growing in the
grows, the Ministry of Tourism and its partners
country. It has a vast impact on the national
plan to explore other niche markets that can be
economy and plays a major role in other aspects of
developed. Efforts also are focusing on
the country's growth and development, especially
infrastructure development. Investments are
the creation of jobs. The Ministry of Tourism in
funneled to road, airport and seaport construction
India reported in 2007 that tourism contributed
and improvement. The hospitality sector and
6.23 percent of the country's gross domestic
manpower training are also key targets for
product (GDP). Tourism was also responsible for
development.
8.78 percent of the country's total employment.
Justification of the study
This translated to roughly 53 million jobs and
It is generally presumed that developing countries
recorded earnings of approximately $10.73 billion.
such as India are going through a delayed transition
These positive numbers contributed to a growth
in migration patterns, where urbanization has
rate of 24.3 percent compared to previous years.
contributed to falling income levels and fewer job
India's booming tourism industry benefits specific
opportunities in rural areas, thus contributing to
sectors. Traditional crafts are being developed and
ongoing rural to urban migration. Therefore it is
promoted by the government because crafts are a
essential for the Indian government to identify and
key component of India's tourism. Artisans, who
strengthen local resources (cultural heritage, local
usually are from rural areas, get to distribute their
traditions, art and crafts) and empower
crafts to a bigger market, hopefully fueling growth
communities in rural areas through management
in the rural communities to which they belong.
of endogenous tourism with a view to influencing
Another aspect of tourism is India's flora and
the patterns of migration.
fauna. The aim is better organization and
administration of India's nature and wildlife
OBJECTIVE OF THE STUDY
sanctuaries. This bodes well for the country's
This study fulfils the following objectives:
efforts at sustainable development
(i). To evaluate role of tourism as one of the service
of ecological resources.
industry in India.
The country's medical and health care community
(ii).To analysis the pros and cons involved with the
is another beneficiary of tourism. People from all
development of tourism industry in the country.
over the world have discovered they can get the
(iii).To analyze the role of tourism in generation of
same quality of medical services in India at a lower
employment in the country.
cost than in other countries. Medical care in
(iv).To give suggestions on the basis of findings of
India costs 1/10 of what it is in the U.S. or UK, and
the study.
the quality of service is similar. Tourists also go to
India to learn about or benefit from alternative
METHODOLOGY
medicine. Non-Western healing techniques are still
Some secondary data have been obtained from
actively practiced in the country. The catch phrase
journals; reports of the national survey and various
of India's tourism campaign is 'Incredible India."
publication. The information thus obtained was
Besides the typical heritage sites from India's past,
analyzed, interpreted and tabulated. This research
the campaign defines other niche markets. Rural
study is explanatory in nature. Though the study is
tourism focuses on the rich culture to be found in
comprehensive yet there is scope for further
the villages. Nature tourism centers on the
research.
country's wildlife and nature preserves. Wellness
tourism promotes the various medical and healing

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ANALYSIS OF ROLE OF TOURISM IN INDIA best tourist destination for its natural resources
Developing countries like India tourism has become and 24th for its cultural resources, with
one of the major sectors of the economy, many World Heritage Sites, both natural and
contributing to a large proportion of the National cultural, rich fauna, and strong creative industries
Income and generating huge employment in the country. India also bagged 37th rank for its
opportunities. Tourism has experienced continued air transport network. The India travel and tourism
growth and deepening diversification to become industry ranked 5th in the long-term (10-year)
one of the fastest growing economic sectors in the growth and is expected to be the second largest
world. Tourism has become a thriving global employer in the world by 2019.
industry with the power to shape developing Moreover, India has been ranked the "best
countries in both positive and negative ways. No country brand for value-for-money" in the Country
doubt it has become the fourth largest industry in Brand Index (CBI) survey conducted by Future
the global economy. Tourism in India should be Brand, a leading global brand consultancy. India
developed in such a way that it accommodates also claimed the second place in CBI's "best
and entertains visitors in a way that is minimally country brand for history", as well as appears
intrusive or destructive to the environment and among the top 5 in the best country brand for
sustains & supports the native cultures in the authenticity and art & culture, and the fourth best
locations it is operating in. Moreover, since tourism new country for business. India made it to the list
is a multi-dimensional activity, and basically a of "rising stars" or the countries that are likely to
service industry, it would be necessary that all become major tourist destinations in the next five
wings of the Central and State governments, years, led by the United Arab Emirates, China, and
private sector and voluntary organisations become Vietnam.
active partners in the endeavour to attain Tourist Attractions in India: India is a country
sustainable growth in tourism if India is to become known for its lavish treatment to all visitors, no
a world player in the tourism industry. matter where they come from. Its visitor-friendly
Present Situation and Features of Tourism in India traditions, varied life styles and cultural heritage
Today tourism is the largest service industry in and colourful fairs and festivals held abiding
India, with a contribution of 6.23% to the national attractions for the tourists. The other attractions
GDP and providing 8.78% of the total include beautiful beaches, forests and wild life and
employment. India witnesses more than 5 million landscapes for eco-tourism; snow, river and
annual foreign tourist arrivals and 562 million mountain peaks for adventure tourism;
domestic tourism visits. The tourism industry in technological parks and science museums for
India generated about US$100 billion in 2008 and science tourism; centres of pilgrimage for spiritual
that is expected to increase to US$275.5 billion by tourism; heritage, trains and hotels for heritage
2018 at a 9.4% annual growth rate. The Ministry of tourism. Yoga, ayurveda and natural health resorts
Tourism is the nodal agency for the development and hill stations also attract tourists.
and promotion of tourism in India and maintains The Indian handicrafts particularly, jewellery,
the "Incredible India" campaign. carpets, leather goods, ivory and brass work are
According to World Travel and Tourism Council, the main shopping items of foreign tourists. It is
India will be a tourism hotspot from 2009-2018, estimated through survey that nearly forty per cent
having the highest 10-year growth potential. As per of the tourist expenditure on shopping is spent on
the Travel and Tourism Competitiveness Report such items.
2009 by the World Economic Forum, India is Despite the economic slowdown, medical
ranked 11th in the Asia Pacific region and 62nd tourism in India is the fastest growing segment of
overall, moving up three places on the list of the tourism industry, according to the market research
world's attractive destinations. It is ranked the 14th report “Booming Medical Tourism in India”. The
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report adds that India offers a great potential in • Capital investment in India's travel and tourism
the medical tourism industry. Factors such as low sector is expected to grow at 8.8 per cent between
cost, scale and range of treatments provided in the 2010 and 2019.
country add to its attractiveness as a medical • The report forecasts India to get capital investment
tourism destination. worth US$ 94.5 billion in the travel and tourism
Initiatives to Boost Tourism: Some of the recent sector in 2019.
initiatives taken by the Government to boost • India is projected to become the fifth fastest
tourism include grant of export house status to the growing business travel destination from 2010-
tourism sector and incentives for promoting 2019 with an estimated real growth rate of 7.6 per
private investment in the form of Income Tax cent.
exemptions, interest subsidy and reduced import Constraints: The major constraint in the
duty. The hotel and tourism-related industry has development of tourism in India is the non-
been declared a high priority industry for foreign availability of adequate infrastructure including
investment which entails automatic approval of adequate air seat capacity, accessibility to tourist
direct investment up to 51 per cent of foreign destinations, accommodation and trained
equity and allowing 100 per cent non-resident manpower in sufficient number.
Indian investment and simplifying rules regarding Poor visitor experience, particularly, due to
the grant of approval to travel agents, tour inadequate infrastructural facilities, poor hygienic
operators and tourist transport operators. conditions and incidents of touting and harassment
The first-ever Indian Tourism Day was celebrated of tourists in some places are factors that
on January 25, 1998. The Year 1999 was celebrated contribute to poor visitor experience.
as Explore India Millennium Year by presenting a
spectacular tableau on the cultural heritage IMPACT OF TOURISM IN INDIA
of India at the Republic Day Parade and organising Tourism industry in India has several positive and
India Tourism Expo in New Delhi and Khajuraho. negative impacts on the economy and society.
Moreover, the campaign ‘Visit India Year These impacts are highlighted below.
2009’ was launched at the International Tourism
Exchange in Berlin, aimed to project India as an POSITIVE IMPACTS
attractive destination for holidaymakers. The 1. Generating Income and Employment: Tourism
government joined hands with leading airlines, in India has emerged as an instrument of income
hoteliers, holiday resorts and tour operators, and and employment generation, poverty alleviation
offered them a wide range of incentives and and sustainable human development. It
bonuses during the period between April and contributes 6.23% to the national GDP and 8.78%
December, 2009. of the total employment in India. Almost 20 million
Future Prospects: According to the latest Tourism people are now working in the India’s tourism
Satellite Accounting (TSA) research, released by the industry.
World Travel and Tourism Council (WTTC) and its 3. Source of Foreign Exchange Earnings: Tourism is
strategic partner Oxford Economics in March an important source of foreign exchange earnings
2009: in India. This has favourable impact on the balance
• The demand for travel and tourism in India is of payment of the country. The tourism industry in
expected to grow by 8.2 per cent between 2010 India generated about US$100 billion in 2008 and
and 2019 and will place India at the third position that is expected to increase to US$275.5 billion by
in the world. 2018 at a 9.4% annual growth rate.
• India's travel and tourism sector is expected to be 4. Preservation of National Heritage and
the second largest employer in the world, Environment: Tourism helps preserve several
employing 40,037,000 by 2019. places which are of historical importance by
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declaring them as heritage sites. For instance, the violence and other crimes committed against the
Taj Mahal, the Qutab Minar, Ajanta and Ellora tourists. The recent crime committed against
temples, etc, would have been decayed and Russian tourist in Goa is a case in point.
destroyed had it not been for the efforts taken by 3. Creating a Sense of Antipathy: Tourism brought
Tourism Department to preserve them. Likewise, little benefit to the local community. In most all-
tourism also helps in conserving the natural inclusive package tours more than 80% of travelers’
habitats of many endangered species. fees go to the airlines, hotels and other
5. Developing Infrastructure: Tourism tends to international companies, not to local businessmen
encourage the development of multiple-use and workers. Moreover, large hotel chain
infrastructure that benefits the host community, restaurants often import food to satisfy foreign
including various means of transports, health care visitors and rarely employ local staff for senior
facilities, and sports centers, in addition to the management positions, preventing local farmers
hotels and high-end restaurants that cater to and workers from reaping the benefit of their
foreign visitors. The development of infrastructure presence. This has often created a sense of
has in turn induced the development of other antipathy towards the tourists and the
directly productive activities. government.
6. Promoting Peace and Stability: Honey and Gilpin 4. Adverse Effects on Environment and
(2009) suggests that the tourism industry can also Ecology: One of the most important adverse
help promote peace and stability in developing effects of tourism on the environment is increased
country like India by providing jobs, generating pressure on the carrying capacity of the ecosystem
income, diversifying the economy, protecting the in each tourist locality. Increased transport and
environment, and promoting cross-cultural construction activities led to large scale
awareness. However, key challenges like adoption deforestation and destabilisation of natural
of regulatory frameworks, mechanisms to reduce landforms, while increased tourist flow led to
crime and corruption, etc, must be addressed if increase in solid waste dumping as well as
peace-enhancing benefits from this industry are to depletion of water and fuel resources. Flow of
be realized. tourists to ecologically sensitive areas resulted in
destruction of rare and endangered species due to
NEGATIVE IMPACTS trampling, killing, disturbance of breeding habitats.
1. Undesirable Social and Cultural Noise pollution from vehicles and public address
Change: Tourism sometimes led to the destruction systems, water pollution, vehicular emissions,
of the social fabric of a community. The more untreated sewage, etc. also have direct effects on
tourists coming into a place, the more the bio-diversity, ambient environment and general
perceived risk of that place losing its identity. A profile of tourist spots.
good example is Goa. From the late 60's to the ENVIRONMENTAL IMPACT OF TOURISM IN INDIA
early 80's when the Hippy culture was at its The tourism industry in India can have several
height, Goa was a haven for such hippies. Here positive and negative impact on the environment
they came in thousands and changed the whole which are discuss below.
culture of the state leading to a rise in the use of POSITIVE IMPACTS
drugs, prostitution and human trafficking. This had 1. Direct Financial Contributions
a ripple effect on the country. Tourism can contribute directly to the conservation
2. Increase Tension and Hostility: Tourism can of sensitive areas and habitat. Revenue from park-
increase tension, hostility, and suspicion between entrance fees and similar sources can be allocated
the tourists and the local communities when there specifically to pay for the protection and
is no respect and understanding for each other’s management of environmentally sensitive areas.
culture and way of life. This may further lead to Special fees for park operations or conservation
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activities can be collected from tourists or tour native species. The coral reefs around the coastal
operators. areas and the marine life that depend on them for
2. Contributions to Government Revenues survival are also protected.
The Indian government through the tourism Negative Impacts
department also collect money in more far- 1. Depletion of Natural Resources: Tourism
reaching and indirect ways that are not linked to development can put pressure on natural
specific parks or conservation areas. User fees, resources when it increases consumption in areas
income taxes, taxes on sales or rental of recreation where resources are already scarce.
equipment, and license fees for activities such as (i) Water resources: Water, especially fresh water,
rafting and fishing can provide governments with is one of the most critical natural resources. The
the funds needed to manage natural resources. tourism industry generally overuses water
Such funds can be used for overall conservation resources for hotels, swimming pools, golf courses
programs and activities, such as park ranger and personal use of water by tourists. This can
salaries and park maintenance. result in water shortages and degradation of water
3. Improved Environmental Management and supplies, as well as generating a greater volume of
Planning waste water. In dryer regions like Rajasthan, the
Sound environmental management of tourism issue of water scarcity is of particular concern.
facilities and especially hotels can increase the (ii) Local resources: Tourism can create great
benefits to natural environment. By planning early pressure on local resources like energy, food, and
for tourism development, damaging and expensive other raw materials that may already be in short
mistakes can be prevented, avoiding the gradual supply. Greater extraction and transport of these
deterioration of environmental assets significant to resources exacerbates the physical impacts
tourism. The development of tourism has moved associated with their exploitation. Because of the
the Indian government towards this direction seasonal character of the industry, many
leading to improved environmental management. destinations have ten times more inhabitants in
4. Raising Environmental Awareness the high season as in the low season. A high
Tourism has the potential to increase public demand is placed upon these resources to meet
appreciation of the environment and to spread the high expectations tourists often have (proper
awareness of environmental problems when it heating, hot water, etc.).
brings people into closer contact with nature and (iii) Land degradation: Important land resources
the environment. This confrontation heightens include minerals, fossil fuels, fertile soil, forests,
awareness of the value of nature among the wetland and wildlife. Increased construction of
community and lead to environmentally conscious tourism and recreational facilities has increased the
behavior and activities to preserve the pressure on these resources and on scenic
environment. landscapes. Direct impact on natural resources,
6. Protection and Preservation of Environment both renewable and nonrenewable, in the
Tourism can significantly contribute to provision of tourist facilities is caused by the use of
environmental protection, conservation and land for accommodation and other infrastructure
restoration of biological diversity and sustainable provision, and the use of building materials.
use of natural resources. Because of their Forests often suffer negative impacts of tourism in
attractiveness, pristine sites and natural areas are the form of deforestation caused by fuel wood
identified as valuable and the need to keep the collection and land clearing e.g. the trekking in the
attraction alive can lead to creation of national Himalayan region, Sikkim and Assam.
parks and wildlife parks. 2. Pollution
In India, new laws and regulations have been Tourism can cause the same forms of pollution as
enacted to preserve the forest and to protect any other industry: air emissions, noise, solid waste
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and littering, releases of sewage, oil and chemicals, and siltation can have wide-ranging impacts on
even architectural/visual pollution coastal environments. And sewage pollution can
(i) Air and Noise Pollution: Transport by air, road, threaten the health of humans and animals.
and rail is continuously increasing in response to Examples of such pollution can be seen in the
the rising number of tourist activities in India. coastal states of Goa, Kerela, Maharashtra, Tamil
Transport emissions and emissions from energy Nadu, etc.
production and use are linked to acid rain, global 3. Destruction and Alteration of Ecosystem
warming and photochemical pollution. Air pollution An ecosystem is a geographic area including all the
from tourist transportation has impacts on the living organisms (people, plants, animals, and
global level, especially from carbon dioxide (CO2) micro-organisms), their physical surroundings (such
emissions related to transportation energy use. as soil, water, and air), and the natural cycles that
And it can contribute to severe local air pollution. sustain them. Attractive landscape sites, such as
Some of these impacts are quite specific to tourist sandy beaches in Goa, Maharashtra, Kerela, Tamil
activities where the sites are in remote areas Nadu; lakes, riversides, and mountain tops and
like Ajanta and Ellora temples. For example, tour slopes, are often transitional zones, characterized
buses often leave their motors running for hours by species-rich ecosystems. The threats to and
while the tourists go out for an excursion because pressures on these ecosystems are often severe
they want to return to a comfortably air- because such places are very attractive to both
conditioned bus. tourists and developers. Examples may be cited
Noise pollution from airplanes, cars, and buses, as from Krushedei Island near Rameswaram. What
well as recreational vehicles is an ever-growing was once called paradise for marine biologists has
problem of modern life. In addition to causing been abandoned due to massive destruction of
annoyance, stress, and even hearing loss for coral and other marine life. Another area of
humans, it causes distress to wildlife, especially in concern which emerged at Jaisalmer is regarding
sensitive areas. the deterioration of the desert ecology due to
(ii) Solid waste and littering: In areas with high increased tourist activities in the desert.
concentrations of tourist activities and appealing Moreover, habitat can be degraded by tourism
natural attractions, waste disposal is a serious leisure activities. For example, wildlife viewing can
problem and improper disposal can be a major bring about stress for the animals and alter their
despoiler of the natural environment - rivers, natural behavior when tourists come too close.
scenic areas, and roadsides. Safaris and wildlife watching activities have a
In mountain areas of the Himalayas and Darjeeling, degrading effect on habitat as they often are
trekking tourists generate a great deal of waste. accompanied by the noise and commotion created
Tourists on expedition leave behind their garbage, by tourists.
oxygen cylinders and even camping equipment.
Such practices degrade the environment CONCLUSION
particularly in remote areas because they have few Tourism industry in India is growing and it has vast
garbage collection or disposal facilities. potential for generating employment and earning
(iii) Sewage: Construction of hotels, recreation and large amount of foreign exchange besides giving a
other facilities often leads to increased sewage fillip to the country’s overall economic and social
pollution. Wastewater has polluted seas and lakes development. But much more remains to be done.
surrounding tourist attractions, damaging the flora Eco-tourism needs to be promoted so that tourism
and fauna. Sewage runoff causes serious damage in India helps in preserving and sustaining the
to coral reefs because it stimulates the growth of diversity of the India's natural and cultural
algae, which cover the filter-feeding corals, environments. Tourism in India should be
hindering their ability to survive. Changes in salinity developed in such a way that it accommodates
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and entertains visitors in a way that is minimally destinations, accommodation and trained
intrusive or destructive to the environment and manpower in sufficient number.
sustains & supports the native cultures in the
More campaign should be under taken by the
locations it is operating in. Moreover, since tourism government to create environment awareness
is a multi-dimensional activity, and basically a among its citizens.
service industry, it would be necessary that all
The government should take necessary steps to
wings of the Central and State governments, create more employment opportunities by
private sector and voluntary organisations become providing multi-dimensional activities based on
active partners in the endeavour to attain tourism.
sustainable growth in tourism if India is to become
a world player in the tourism industry. REFERENCES
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intrusive or destructive to the environment and environment:India; Jaisalmer, Khajuraho
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*****

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