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Rediff News  All News  » Business » Tourism industry may generate Rs 282,970 crore

Tourism industry may generate Rs 282,970 crore

July 23, 2007 16:57 IST

The travel and tourism industry in India is expected to generate Rs 282,970 crore (Rs 2,829.70 billion) of economic activity (total demand in 2007) and this is expected to grow to (nominal terms) to Rs 947,270 crore (Rs 9,472.70 billion) by 2017.

Total demand is expected to grow by 8.7 per cent in 2007 and by 7.9 per cent per year in real terms between 2008 and 2017, says the World Travel and Tourism Council's (WTTC) 2007 economic research on India.

WTTC's latest findings also reveal that 842 million international tourist arrivals were recorded last year of which India's share was only 0.52 per cent, indicating that while the growth in tourism in India has been impressive, India's share in global tourist arrivals and earnings needs an upwards thrust. 

Minister for Tourism and Culture Ambika Soni, at the conference titled "Managing Growth" organised by the WTTC India Initiative, spoke about how Indians should be sensitised about tourism and its benefits. The minister said the ministry was working on getting visa on arrival implemented soon.

"We are working with home ministry to offer visa on arrival on a trial basis from a few identified countries as soon as work at Delhi and Mumbai airports is done," she said. She agreed that there are security issues but allayed fears by saying "these fears will not be valid after the advance passenger information system is in place."

Soni said the Delhi government will put an ordinance in place to clarify that rooms used under the bed and breakfast scheme (in Delhi) will not be charged commercial rates, for water and power and will be exempt from VAT as well.

The minister maintained that people will be more open to the scheme after the ordinance.

Travel packages to India will be a bit cheaper soon. The minister said soon, there will be 75 per cent abatement of service tax on tour packages.

The current service tax is at 12.2 per cent. Subhash Goyal, president, Indian Association of Tour Operators, said, "We asked for 90 per cent abatement. The minister said they would give them 75 per cent abatement, which means a marginal difference of about 5-7 per cent in tour packages."

"If we get an abatement of 90 per cent, the difference could be as much as 15-20 per cent," said Goyal. The Budget, earlier this year, granted five-year tax holiday to two- , three-  and four-star hotels being built in Delhi and NCR. The minister said similar tax holiday will be offered to hotels coming up in various cities in the Buddhist circuit -- Bodhgaya, Sarnath, Kushinagar, Sravasti, etc.

Ravi Teja Sharma in New Delhi