India - Tourism Ministry seeks stimulus package

Vinay Kumar

NEW DELHI: Global meltdown and 26/11 Mumbai terror attacks have spelt doom for the tourism and hospitality sector, leading to widespread cancellation of nearly 60 per cent hotel bookings across the country during the ongoing peak season.

A concerned Union Tourism Ministry has sought Prime Minister Manmohan Singh’s intervention to include tourism sector in the economic stimulus package to tide over the crisis. The tourism and hospitality sector’s share in the Gross Domestic Product is 5.83 per cent and its share in employment 8.27 per cent.

From the 54th slot in global rankings in 2002, India’s tourism and hospitality sector has climbed to the 42nd position this year, say officials. The sector had failed to get any benefit in the Rs. 32,000-crore stimulus package recently announced by the Centre.

In a recent letter to Dr. Singh, Tourism and Culture Minister Ambika Soni has submitted four points for consideration, including reduction in luxury tax by four per cent.

Ms. Soni has sought reimbursement of service tax up to 90 per cent, up from the present 75 per cent, reduction of floor area ratio and pegging it at 25 per cent for those who construct hotels before 2010 Commonwealth Games and delinking of hotel projects from commercial real estate projects.

Pointing out that overseas tourists contributed $ 10.8 billion in foreign exchange in 2007, Union Tourism Secretary Sujit Banerjee said the “booster dose” targeted at infrastructure spending should also take cognisance of the tourism sector and so that fiscal benefits could flow to it.

While 5.08 million foreign tourists visited India in 2007, the figure touched 4.85 million up to November 2008. “The only ray of hope for the sector is domestic tourism as the number grew from 270 million in 2002 to 527 million in 2008,” Mr. Banerjee told The Hindu. He said the sector offered employment to taxi drivers, guides, caterers, tour operators, housemaids and a proposal to draft ex-servicemen to work as “Tourism Police” was also being considered.

Commonwealth Games


On the preparation for Commonwealth Games, to be hosted in Delhi next year, Mr. Banerjee expressed concern over the shortage of hotel accommodation which could be in the range of 8,000 to 9,000 rooms.

He had already urged Cabinet Secretary M. Chandrasekhar to facilitate “Single Window” clearance from various departments of the Central and State governments on setting up a hotel. At present, about 46 clearances from various government departments were needed to set up a hotel.

Mr. Banerjee said about 41,000 hotel rooms would be needed to accommodate delegates, sportspersons and visitors for the Commonwealth Games against the availability of only 11,000 rooms in Delhi.

Against their initial hope of getting 17,000 to 18,000 rooms, the Ministry hopes to get only about 9,000 rooms before the Games.