The tourism sector in India witnessed a slowdown last year
In her maiden Union Budget speech, Finance Minister Nirmala Sitharaman announced that the government will develop 17 iconic sites as world-class tourist centres to improve the flow of domestic and foreign visitors to these destinations.
The announcement comes at a time when the Economic Survey released on July 4 pointed out that the tourism sector in India witnessed a slowdown last year in terms of growth, with FTAs declined from 14.2 per cent in 2017-18 to 2.1 per cent in 2018-19.
The FTAs in 2018 stood at 10.6 million compared to 10.4 million in 2017.
In addition, foreign exchange earnings (FEEs) from tourism last year stood at Rs 27.7 billion as compared to Rs 28.7 billion in 2017, the survey said.
The survey also said that the growth in domestic tourist visits slowed down from 12.7 per cent in 2016 to 2.4 per cent in 2017. In absolute numbers, there were 1,652.5 million domestic tourists in 2017 compared to 1,615.4 million in 2016.
Hence, a focus on this sector will boost the industry which is considered as a major driver of employment.
According to Yogesh Mudras, MD, UBM India, "The proposed initiatives by the government to develop world-class 17 iconic tourism sites will draw the attention from international as well as domestic tourist. These destinations will boost and will improve the investment in the travel and tourism industry especially by the millennials who have the spending power.”
Plus, Budget’s focus on connectivity in rural and urban places will also boost and help tourism market.
“These initiatives will also move the needle for the MICE industry which has been growing exponentially over the years and has scope for record growth,” added Mudras.
The tourism industry will also benefit from government’s focus on the aviation sector in budget 2019.“As India is poised to become the 3rd largest domestic aviation market, the budget has focused on reviving the concerned sector by opening FDI doors. Liberalisation of FDI will attract investments from foreign players, which will revive the current cash-strapped aviation sector, thereby stabilising the aviation industry, which will in turn lead to incremental benefits for the tourism industry,” said Vishal Suri, Managing Director, SOTC Travel.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.