Tourism in India rides on infrastructure growth

Rana Kapoor

India’s tourism sector has bucked global economic headwinds to remain on a steady growth trajectory for over a decade now. After the historic jump to 40th position in WEF Travel and Tourism Competitiveness Index, India crossed the 10 million mark in FTAs for the first time in 2017. Union Budget 2018 is a testament of the government’s confidence in the sector, underlined by the focus on strengthening infrastructure, improving connectivity and rural development.

The decision to develop 10 prominent sites as ‘Iconic Destinations’ is a laudable effort which will serve as pilot projects and a replicable model for other major tourism destinations across the country. Deeper integration of Swachh Bharat Mission towards developing civic and modern tourism amenities around 110 Adarsh Monuments of ASI will augment the popularity of heritage tourism in our country.

Connectivity has always been an Achilles’ heel restricting existing tourist inflow only to a handful of ‘honeypot’ destinations. This has led to imbalanced concentration of revenue as well as exerts skewed pressure on local infrastructure. Through a multi-modal focus on Air, Road and Rail, we can expect significant improvements in last mile connectivity. The NABH Nirman initiative announced in the Budget is a welcome step towards expanding airport capacity more than five times to handle a billion trips a year.

Rana Kapoor

Boost to regional air connectivity through UDAN scheme and upgradation of smaller airports & helipads will bring remote and hinterland destinations into the mainstream. This hub-and-spoke model will not only diversify tourist footfalls, but also boost the associated revenue receipts. Further, the impetus on implementation of Bharatmala Project and proposed Seaplanes also open up avenues to leverage Coastal and Maritime Tourism.

Capital intensive infra projects, like ropeways, will usher in opportunities for the tourism sector, especially in the hilly regions of the North and North East, which are home to unparalleled natural beauty. Building of tunnels at Zojila Pass and Sela Pass will provide all weather connectivity to tourism dependent regions of Ladakh and Tawang respectively and give a fillip to tourist arrivals.

The Budget’s focus on rural development is also expected to impact the Tourism sector. Rural India is poised to benefit immensely from budgetary allocations towards improving infrastructure, skill development and diversifying livelihood opportunities. Led by the rising popularity of ‘Experiential Tourism‘, development of niche activities such as community based tourism and ecotourism will significantly attract tourists to rural areas. On the urban front, smart cities are poised to become the new age tourist hotspots. Holistic development of the cities while preserving the culture and heritage will further augment MICE tourism in these cities.

The Government’s focus to promote digital ecosystem through Cloud Computing, Internet of Things, Artificial Intelligence, Machine Learning and rural broadband connectivity will also transform India into a ‘Smart Tourism’ destination. These technologies will not only facilitate ease of information access, hassle-free payment mechanisms, improved safety and security, but combined with Big Data, it will provide unique data analytics on behavior and preferences of tourists.

The Budget lays heightened focus on infrastructure, education, healthcare and rural development, which will have a multiplier impact on Tourism and deliver long term socio-economic benefits. I am confident that the sector will maintain its growth momentum and we can expect ‘sustained sunshine’ for this sunrise sector in times to come.

Contributory article by Rana Kapoor, MD & CEO, YES BANK; Chairman, YES Global Institute