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ECONOMIC

AND

SOCIAL

COMMISSION

UNITED

FOR ASIA

NATIONS

New York. 1992

AND THE

PACIFIC

A study on the economic impact of tourism in India was undertaken in response to the
request of the Government of India with financial assistance from the Government of Japan. The
report was prepared by Mr. G. Aaveendran and Mr. M.A. Saluja, Consultants.
The views expressed in the report are those of the authors and do not necessarily reflect
those of the United Nations. The designations employed and the presentation of the material in this
publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the
United Nations concerning the legal status of any country, territory, city or area, or of its authorities,
or concerning
the delimitation
of its frontiers or boundaries.

This document has been issued without formal editing.

CONTENTS

NO.
CHAPTERS
INTRODUCTION
II
III

POLICY

INTERNATIONAL

IV

AND

PLANNING

TOURIST ARRIVALS IN INDIA..

15

TOURISM RECEIPTS.

25

IN INDIA

33

VI

INCOME AND EMPLOYMENT EFFECTS OF TOURISM

41

VII

MEASUREMENT OF INDIRECT AND INDUCED IMPACTS OF TOURISM

69

POLICY RECOMMENDATIONS

83

DOMESTIC

TOURISM

ANNEXURES
INPUT-OUTPUT
COEFFICIENT
MATRIX
OF INDIAN ECONOMY (1983-84)

89

(61x61)

II

LEONTIEF

INVERSE

MATRIX

FOR 60 SECTORS

OPEN

III

LEONTIEF

INVERSE

MATRIX

FOR 61 SECTORS

CLOSED

SCHEDULES

PAGE
TITLE
T
1
INTERNATIONAL
VIII
OURISM

MODEL
MODEL

105

1.1
vi)
1.2
1

CHAPTER

INTRODUCTION
Objectives

of the Study

Tourism is essentially an expression of natural human instinct for experience, education and
entertainment.
The motivations for tourism also include social, religious and business interests.
The
economic consequences of this phenomenon are wide ranging and capable of influencing the development
process of several nations.
Many of the developing countries have, however. not been able to take
advantage of it in full measure due to a variety of reasons including lack of information on the significance
of tourism in the economy. particularly with regard to its contribution to national income. employment and
tax revenue. As a result, tourism is not given the required priority in the national development plans of thesecountries.
Recognizing the need for having a systematic approach to resolve the situation, the Economic
and Social Commission for Asia and the Pacific (ESCAP) developed guidelines for the application of inputoutput techniques for determining the impact of tourism in any country. A number of case studies were also
sponsored by the ESCAP to assist its member countries including India to undertake objective evaluations
by using the guidelines.
The basic objective of this study is to obtain a set of statistical indicators which
would describe the significance of tourism in the Indian economy. The specific components of the study
inter -alia include the following:-

i)

Review of trends in international

ii)

Study of the profile of foreign tourists visiting India.

iii)

Study of expenditure

iv)

Review of dimensions

v)

Estimation of direct impacts of tourism on national income, employment,


and balance of payment.
Estimation

Methodology

tourist traffic to India.

pattern of foreign tourists.


of domestic tourism.
government

revenue

of indirect impacts and multiplier effect.

and Data Sources

The study essentially involved a systematic analysis of historical data on tourism development in
India, an assessment of the profiles of foreign and domestic tourists and the application of input-output
analysis on their expenditure pattern.
The time series data on tourism were available from various
publications
of Department of Tourism and Planning Commission.
The profiles of tourists and the
characteristic features of their demand were obtained from foreign and domestic tourist surveys. The InputOutput Transactions Table (IOTT) of Indian economy was available from the Central Statistical Organization (CSO) for the year 1983-84.
The published 1-0 tables contained 60 sectors including hotels and
restaurants.
The first step in the study was to compile all the available data on Indian economy and tourism from
various sources including population censuses, economic censuses, enterprise surveys, etc., and
establishment of their comparability with the 1-0 tables. The significance of hotels and restaurants in the
Indian economy was also studied separately to establish a relationship between tourist expenditures and
the value of output of the sector.

The Reserve Bank of India (RBI) compiles the estimates of foreign exchange earnings from tourism
as a part of balance of payment statistics. The latest estimate available from the RBI was for the year 198889. Provisional estimates worked out by the Department of Tourism on the basis of foreign tourist arrivals
and average expenditure
per tourist were available for the later years.
There was a problem 9f
comparability in the RBI estimates as the method of estimation was partly revised during 1983-84. Some
adjustments were, therefore, made in the estimates to make them comparable over the years.
There is no regular mechanism for estimating the expenditure of domestic tourists on a year to year
basis. Though a survey of domestic tourists conducted during 1981-82 provided some estimates of total
expenditure,
it was considered to be less reliable due to partial coverage of the tourist centres.
The
estimate for 1983-84 was, therefore, derived indirectly by using the results of "Enterprise Survey 1983-84"
on hotels and restaurants.
The profile and expenditure pattern of foreign tourists were available from surveys being conducted
in India almost once in five years. The latest survey was conducted during 1988-89. A new approach called
"Split Sampling Technique" was used for the first time in the 1988-89 survey.
The technique essentially
involved the use of different sub-samples for collecting information on items relating to different aspects.
In fact, the various items of information were grouped into three different categories.
The first group of
items related to demographic variables, motivational aspects and places of visit in India.
All the
classificatory variables and those with large variances were included in this group. The second groups
related to the expenditure pattern and the third group to perceptions and evaluation of tourism infrastruc-ture.
The first and second groups of variables were included in one schedule and those in the first and third
groups were included in another schedule. These two schedules were used alternately for interviewing thetourists.
A Survey of tourists at their places of stay was also undertaken to validate the results of the exit
point survey and for assessing the expenditure pattern of the tourists in detail. The schedules used for the
survey are annexed at the end of the report (Schedules I to III).
In general, a stratified two-stage sampling design was adopted forthe exit point surveys. In the first
stage, random periods of time during the survey year were selected for each of the exit points. In the
second stage, tourists leaving the country through the exit points during the sample periods were selected
systematically for interviewing.
In the case of major international airports at Bombay, Calcutta, New Delhi
and Madras, the fifty two weeks of the year were divided into 13 periods of four consecutive weeks each.
During each of the four weeks period, the four airports were surveyed for a week each in a random order.
Tourists were selected from all the international flights departing from the airport during the selected
week. The sampling fraction was variable depending on the volume of traffic. At the other exit points, the
survey was conducted less frequently and the time periods were selected carefully to cover both lean and
peak tourist seasons.
A stratified multistage sampling scheme was adopted for the survey of tourists in the accommodation units. Each of the cities of Bombay, Calcutta, Delhi, Madras, Goa and Varanasi constituted a stratum
and the accommodation
units in these cities were classified into luxury, moderate and economy classes to
form three substrata.
The luxury class included five star and deluxe hotels while three star and four star
hotels constituted moderate class and all other hotels formed the economy class. The first stage unit of
time periods for the survey were selected as the two days following the period of survey in the respective
airports. The required number of accommodation establishments were then selected from each substratum by using simple random sampling.
All the foreign tourists who were staying in the selected hotels
during the previous night were then listed and a random sample was selected for the purpose of the survey.
The total sample size for the survey was fixed as 5,000 tourists and they were allocated over various strata
on the basis of the percentage of tourists spending at least a night in those cities.
They were further
distributed over various substrata on the basis of the pattern of use of accommodation units by the foreigntourists.
The expenditure
data were, then, collected from the selected tourists for the previous day and
for the period since the arrival in the country.

..

The profile and expenditure pattern of domestic tourists were obtained from two surveys conducted
during 1981-82. The first survey covering 55 centres was conducted as a part of the study on "Employment
Potential of Tourism in India" and the second survey was a "Pilot Study on Domestic Tourism", covering 22
centres. In both the surveys, the centres were selected purposively to coverthe tourists of different income
classes, purposes and interests. The sample size was fixed apriori and distributed among different centres
on the basis of their importance.
The patterns of expenditure revealed by the foreign and domestic tourist surveys were further
adjusted to conform to 1-0 tables by using transport and trade margins estimated by the Central Statistical
Organization (CSO). The adjusted expenditure vectors were used for deriving direct, indirect and induced
impacts in the economy in terms of income, employment and tax revenue.
The impact analysis was carried out by using both open and closed 1-0 models. In the closed
model, the private consumption expenditure was taken as the last column and the sector-wise value added
figures were taken as the last row. The computation of inverse matrices and their multiplication with
expenditure vectors were carried out by using standard software packages in personal computers.
The
results thus obtained were used to evaluate the significance of tourism in comparison to other sectors of
the economy.

1.3

Problems

and Limitations

Tourism is a composite industry consisting of several segments whose products and services are
being used both by the local population and tourists.
Some of these segments like travel agents, touroperators,
tourist transport operators, guide services, etc., still do not find a place in the statistical system
of the country and as such no worthwhile information is available about them. An attempt was, therefore,
made to collect statistical information about this sector through a survey (Schedule IV annexed). Even in
the case of sectors for which data are available on a regular basis it was not possible to quantify the services
provided to tourists separately. The validation of the estimates of tourist expenditure from the performance
data of industries was, therefore, not feasible.
There were serious problems in the comparability
of data available from population censuses,
economic censuses, follow-up surveys and other regular surveys due to differences in concepts, definitions
and methodology.
The employment data were also not available according to the classification of sectors
followed in the 1-0 tables. The estimation of employment coefficients became difficult because of these
data problems and it introduced a kind of upward bias in some of the sectors.
A major difficulty in the completion of the study was the non-availability
of data on the use of
imported raw materials by various sectors. As a result, it has not been possible to estimate the additional
import requirements in the economy due to tourist expenditure.

CHAPTER

TOURISM

2.1

POLICY

II

AND

PLANNING

Tourism as an Instrument of Economic Development

The development process in the history of nations is basically a set of human activities.
These
activities invariably relate to the physical and phsycological needs of people at any given point of time. In
general, the basic human instincts, his social and economic needs and desire for materialistic comforts are
the main factors which activate the development process.
It is a basic human instinct to travel and experience the diversities of life.
This universal
phenomenon cuts across all artificial barriers and boundaries of nations. The motivations of travel are,
however, varied and diverse. Many nomadic tribes travelled across the vast lands of earth in search of food
and wealth in the pre-historic age. There were also many conquerors who went across the countries in
quest of new treasures. With the onset of civilization, the motivations of travel also assumed new forms.
The community of business travellers, explorers and pleasure seekers emerged as new group of tourists.
Technological
advances in the twentieth century opened up new horizons for travel.
The distances
between different countries of the world reduced due to advances in the fields of aviation and communication. Better transport facilities and comforts also became an inducement for travel.
The post world war period witnessed spectacular economic growth in many countries and as a
consequence the disposable income of people increased substantially.
This increased purchasing power,
coupled with more leisure time and paid holidays as well as changes in consumer demand for non-material
goods induced a boom in tourist movements across the world. Over a short span of time, tourism emerged
as one of the most significant economic and social activities of the world. It soon becamA a vital instrument
for economic growth and social change in several countries.

2.2

Recognition

of Tourism

in India

The recognition of tourism as an instrument of economic and social development has been rather
late in most of the developing countries including India. It was only during 1946, the importance of tourism
was first recognized in India when a Committee under the Chairmanship
of Sir John Sargeant was
appointed to advise the Government on the development of tourism. The Government of India took note
of tourism phenomenon and its economic implications only thereafter and led to the establishment of a 'Tourist
Traffic Branch' in 1949 in the Ministry of Transport. In 1952, the Government of India opened a tourist oriice
at New York and began a close relationship between the Department of Tourism and Air India in promoting
tourist traffic to India. In 1955, the Air India established a "Tourism Cell" in their headquarters at Bombay
and a Government of India Tourist Office was opened at London. Another significant development during
the period was the expansion of the "Tourism Section" in the Ministry of Transport into a full-fledged
"Directorate of Tourism in 1958".

2.3

Second

Five Year Plan (1956-61)

Tourism became a constituent of national development plan during Second Five Year Plan (195661) with an allocation of As. 33.63 million including As. 17.84 million in the State sector. The emphasis
during this plan was mainly on providing accommodation, transport and recreational facilities at important
tourist centres, especially those situated in far off places. Broadly, the development schemes taken up
during the Plan could be classified into three categories viz (a) schemes for the development of facilities
at a limited number of places visited largely by the foreign tourists and wholly financed by the Central
Government,
(b) schemes intended to provide facilities for domestic tourists at centres visited both by
foreign and domestic tourists and financed both by Central and State Governments in the ratio of 50:50
and (c) schemes which were wholly financed and executed by the State Governments for the development
of centres of regional and local importance. The allocation and expenditure on those schemes during the
Plan period are given in table 2.1.

TABLE 2.1
ALLOCATION

AND

EXPENDITURE
FOR TOURISM
SECOND
FIVE YEAR PLAN

SCHEMES

DURING

(Rs.

Category

Central

Sector

8.35

3.75

7.44

4.94

State

c
TOTAL

2.4

Third

15.79

8.69

Total

Sector

in million)

3.75

8.35

7.44
10.40

4.94
8.50

14.88

9.88

10.40

8.50

17.84

13.44

33.63

22.13

Five Year Plan (1961-66)

The tourism development programmes for the Third Five Year Plan (1961-66) were also largely
concentrated on the provision of facilities like accommodation and transport except for a major scheme for
the establishment of a "Winter Sports Complex" at Gulmarg in Jammu and Kashmir State. The Plan period
thus witnessed the beginning of an era for the development of activities connected with tourism,
particularly adventure tourism. The total plan allocation was As. 80 million including As. 45 million in the
State sector. The categorywise allocation and expenditure during the Plan period are given in table 2.2.

TABLE 2.2
ALLOCATION

AND

EXPENDITURE
FOR TOURISM
THIRD FIVE YEAR PLAN

SCI+EMES

DURING

(Rs. in million)

Category

Central
Allocation

Sector
Expenditure

State

Allocation

29.20

9.74

5.80

4.77

5.80

TOTAL

35.00

14.51

Total

Sector
Expenditure

Allocation

Expenditure

29.20

9.74

11.60

9.54

39.20

4.77
31.76

39.20

31.76

45.00

36.53

80.00

51.04

(Rs.

There were also a number of other significant developments during the Plan period which could
be regarded as land marks in the evolutionary history of Indian tourism.
A committee under the
Chairmanship
of Shri L .K. Jha, the then Secretary, Department of Economic Affairs was set up by the
Government in 1962 to suggest ways and means for increasing the flow of tourist traffic to India. The terms
of reference of the committee included the following:-

(i)

assess the requirements


of tourism in respect of hotel accommodation
and transport
arrangements and suggest necessary measures for the speedy provision and improvement
of these facilities;

(ii)

examine the existing rules and procedures regarding visas, customs and other formalities
with a view to facilitate entry and exit of tourists;

(iii)

recommend necessary reorganization of publicity programmes


bring about the desired expansion of traffic; and

(iv)

suggest measures necessary to ensure that the foreign exchange earned from tourism
resulting from its expansion is protected against leakages.

and other steps required to

and

The committee in its report submitted to the Government in 1963 , made several recommendations
covering almost all aspects of tourism development in the country including travel formalities, airport and
transport facilities, hotels, publicity and promotion, shopping and entertainment facilities, development of
tourist centres and training of personnel for tourism. By and large, these recommendations were accepted
and implemented by the Government.
One of the recommendations
of Jha Committee was to set up a Corporation which could take over
some of the functions of the Department of Tourism such as publicity and promotion abroad. The India
Tourism Development
Corporation (ITDC) was thus established in 1966 to develop infrastructure and
promote India as a tourist d'estination.
In the aviation sector, the Government agreed in 1965 to allow tourist charters by non-scheduled
carriers to come to India. The total number of such charters were, however, limited to 50 per year.

2.5

Annual

Plans (1966-69)

The basic approach towards tourism development and the commitment of the Government
continued to be the same during the Annual Plans from 1966 to 1969. The allocation and expenditure
during these three Plan years are given in table 2.3.

TABLE 2.3
ALLOCATION

AND EXPENDITURE
FOR TOURISM SCHEMES
ANNUAL PLANS FROM 1966 TO 1969

DURING

in million)

Category

Central
Allocation

16.75

8.12

State

Sector
Expenditu

re

Allocation

Expenditure

16.75

6.93

8.12

3.44

16.24

6.88

36.99

27.86

36.99

27.86

45.11

31.30

69.98

41.67

6.93
3.44

c
TOTAL

24.87

Total

Sector

10.37

Allocation

Expenditure

2.7

In a determined effort to increase the tourist traffic from Europe, the Government launched the
"Operation Europe Scheme" in 1968. It was a unique scheme under which the Department of Tourism and
the national carrier, Air India, formed a single team for stepping up the promotional efforts in Europe.
2.6

Fourth

Five Year

Plan (1969-74)

The Fourth Five Year Plan (1969-74) introduced major changes in the development strategy fortourism.
The broad approach became expansion and improvement of tourist facilities with a view to
promote" destination traffic" as distinct from "transit traffic". The Plan envisaged integrated development
of selected areas and encouragement
of "charter traffic". Emphasis was also laid on the provision ofaccommodatio
transport and recreational facilities. The outlay provided for tourism schemes during the
Plan period was 458.88 million including As. 110.8 million in the State Sector. The schemes of the Central
Government were (i) loans to hotel industry in the private sector, (ii) loans for the purchase of tourist
vehicles by private operators, and (iii) integrated development of selected centres. An outlay of As. 127.7
million was provided to ITOC for the construction of hotels, motels and cottages, renovation and expansion
of tourist bungalows, setting up of transport units and establishment of duty free shops. In the State Plans,
provision was largely made for domestic tourist facilities, which generally included construction of low
income rest houses, development of tourist centres and undertaking publicity. The outlay and expenditure
during Fourth Plan period are given in table 2.4.

TABLE 2.4
ALLOCATION

AND EXPENDITURE
FOR TOURISM
DURING FOURTH FIVE YEAR PLAN

SCHEMES
(As. in million)

Allocation

Sector
Central

Sector

(a)
(b)
State

Expenditure

Department
ITDC

Sector

TOTAL

220.38
127.70

127.95
122.58

110.80

163.18

458.88

413.71

The major developments during the Plan period were the introduction of Group Inclusive Tour (GIT)
and excursion
fares by Air India in 1969, launching of operation the United Kingdom and operation
America schemes during 1970, introduction of Himalayan Tourism concept by Air India in 1971 and
creation of a Congresses and Conventions Unit in the Tourism Cell of Air India in 1974.
Fifth Five Year Plan (1974-78)
The Government strategy for tourism development was further intensified during Fifth Plan period
(1974-78). The emphasis was on integrated development of selected tourist centres like Kovalam, Goa,
Gulmarg and Kulu-Manali which became the symbolic models of resort tourism in India. The other
investment priorities during the Plan period were (a) provision of additional accommodation and transportfacilities,
and (b) tourism promotion and publicity in the overseas markets. The outlay provided during the
Plan period was As. 592.82 million including As. 285.23 million in the State sector.
The sectorwise
allocation and expenditure are given in table 2.5.

2.8

Annual

Plans (1978-80)

The planning strategy on tourism did not undergo any change during the Annual Plans from 1978
to 1980. The allocation and expenditure on tourism during these two years of Annual Plan are given in table

2.6.
8

TABLE 2.5
ALLOCATION

AND EXPENDITURE
DURING FIFTH FIVE

FOR TOURISM
YEAR PLAN

SCHEMES
(As. in million)

Central

Sector

(a)
(b)
State

Department
ITDG

Sector

TOTAL

179.69
127.90
285.23

142.51
115.73
291.37

592.82

549.61

TABLE 2.6
ALLOCATION
AND EXPENDITURE
FOR TOURISM SCHEMES
DURING ANNUAL PLANS FROM 1978 TO 1980
(As. in million)
Sector
Central

Department
ITDC

Sector

TOTAL

2.9

Expenditure

Sector

(a)
(b)
State

Allocation

Sixth

56.97
127.32
267.66

35.26
127.80
213.25

451.95

376.31

Five Year Plan (1980-85)

The Sixth Plan (1980-85) spelt out the objectives of investment in the tourism sector as (i)
optimisation of the use of existing capacity, and (ii) to increase substantially the tourist accommodation in
the public and private sectors. The outlay provided forthe sector during the Plan period was As. 1,799.60
million including As. 1,129.60 million in the State sector. The emphasis in the programmes of Department
of Tourism was on the development of selected beaches, mountain resorts, wild life and cultural tourism,
training and overseas promotion.
The loan assistance scheme to hotels was converted into interest
subsidy scheme through Industrial Finance Corporation of India. In the case of ITDC, the expenditure was
increased to As. 534.72 million beyond the original allocation, mainly for large scale capacity expansion
and equity participation in the joint venture projects with State Governments.
An important development
during the Plan was the establishment of Indian Institute of Tourism and Travel Management (IITTM) in
1983 as an apex institution for tourism education. The categorywise allocation and expenditure during the
Plan period are given in table 2.7.

TABLE 2.7
ALLOCATION

AND EXPENDITURE
FOR TOURISM
DURING SIXTH FIVE YEAR PLAN

SCHEMES
(As. in million)

Central

Sector

State Sector

250.00
420.00
1,129.60

1,143.63

TOTAL

1,799.60

1,889.48

(a)
(b)

Department
ITDC

211.13

534.72

2.10

Tourism

Policy

1982

By the beginning of Sixth Plan, tourism emerged as an important segment of Indian economy
contributing
substantially to foreign exchange earnings, employment generation and backward area
development.
The Government, thus came out with a written policy on tourism in the year 1982. The
endeavour of the Government in the field of tourism was clearly spelt out in the Policy as stated below:"The many attractions of India hold virtually an unlimited potential for tourism development.
The endeavour, therefore, will be to convert this vast potential
into reality through wellplanned, well-defined
and fully integrated national programmes of tourism development."
The objectives

of the tourism development


force nationally

programmes
and

were further spelt out as :

(i)

It becomes a unifying
through travel.

internationally

fostering

better understanding

(ii)

It helps to preserve, retain and enrich our world view and life style, our cultural expressions
and heritage in all its manifestations.
The prosperity that tourism brings must cause accretion
and strength rather than damage to our social and cultural values and depletion of our natural
resources. In tourism, India must present itself on its own terms -not as an echo or imitation
of other countries, other cultures and other lifestyles.

(iii)

It brings socio-economic
benefits to the community and the State in terms of employment
opportunities,
income generation,
revenue generation for the States, foreign exchange
earnings and, in general, causes human habitat improvement.

(iv)

It gives a direction and opportunity to the youth of the country both through international and
domestic tourism to understand the aspirations and viewpoints of others and thus to bring
about a greater national integration and cohesion.

(v)

It also offers opportunities to the youth of the country not only for employment but also for
taking up activities of nation building character like sports, adventure and the like. Thus as
a programme for the moulding of the youth of the country, tourism is of inestimable value.

The policy also specified the responsibility for tourism development as a common endeavour.
It
stated; "While broadly the promotion of international tourism would be mainly the responsibility of the
Central Sector, and that of domestic tourism primarily of the State Sector, the Centre would playa
coordinating
role supplementing
the State effort wherever necessary.
Further, tourism development
cannot solely be the responsibility of the Government. It has to be a common endeavour of all the agencies
vitally concerned with its development at Central and State levels, of public sector undertakings and the
private sector, of airlines, railways and communication
systems, municipal and local bodies and
educational and cultural organizations.
This combined effort would be directed towards achieving acomprehensiv
well-rounded
and integrated development enabling tourism to make a positive and
effective contribution to the economic growth of the country".
The policy also laid down a plan of action to maximize the benefits of tourism. The development
of tourism infrastructure was proposed to be taken up in a 5 to 10 year perspective based on a "travelcircuit" concept. It was intended to achieve intensive development of selected centres, dispel the tendency
of concentration in a few urban centres, encourage the diversification of tourist attractions and opening
up economically backward areas which hold many tourist attractions.
To involve the youth of the country
in national integration and make tourism a vehicle for achieving this objective, youth hostel activities were
given significant importance. In order to augment tourism facilities for the lower middle class and the poorer
sections of the society, cheap accommodation in the form of 'Oharamshalas' , 'Sarais', etc., were proposed
to be provided.
Marketing strategies were required to be adopted to broaden the tourist base in existing
markets, explore new tourist markets and promote and facilitate intra-regional travel, particularly from
neighbouring countries.
M-anpower development and training were also to be given due weightage to
ensure efficient service and effective management of tourist facilities. The tourism development in Sixth
Plan was thus supported by a well documented national policy which became the basis for all the
Government initiatives.

10

2.11

Seventh

Five Year Plan (1985-90)

The Seventh Five Year Plan (1985-90) recognized tourism as a priority sector and sought to
provide the most needed support facilities for its sustained growth. The sector was accorded the status of
an industry and its development was included as a plan objective for the first time in the planning process.
The objectives of the tourism plan were stated as (i) redefining of the role of public and private sectors to
ensure private investment in developing tourism and to direct public sector investment mainly on the
development of support infrastructure, and (ii) exploiting tourism potential to support local handicrafts and
other creative arts to promote national integration. The thrust areas of tourism planning were designated
as follows:Development of selected tourist centres/circuits which are popular with the tourists instead of
spreading limited resources thinly over a large number of circuits.
Diversification
of tourism to India from the traditional sight seeing tours to the more rapidly
growing holiday tourism market within the framework of country's milieu with a conscious
attention to the aesthetic, environmental and socio-cultural implications of tourism projects.
Development

of non-traditonal

areas such as trekking,

winter sports, wild life tourism, etc.

Promotion of India as a unique place of cultural tourism destination


a major force in support of conservation of national heritage.

and to utilise tourism as

Exploration of new tourist markets particularly in the Middle East and East Asian countries
who have cultural affinity with India and launching of a programme of "Discover Your Roots"
and vigorous marketing of conference and convention traffic.
Launching of a national image building and marketing plan in key markets by pooling the
resources of various public and private agencies instead of independent and disjointed efforts
undertaken by those organizations to project a better image of the country.
Provision

of inexpensive

but clean accommodation

at different places of tourist interest.

Consolidation of operations rather than expansion, and improvement


of public sector corporations in the tourism sector.
Streamlining of facilitation procedures for passengers
time taken to complete them are minimal.

in the service efficiency

at the airports so that formalities

and

In line with the priority assigned for the sector, the Plan outlay for tourism promotion was also
increased during Seventh Plan. The total allocation was kept at As. 3,261.50 million including As. 1,874.70
million in the State sector. The sectorwise allocation and expenditure are given in table 2.8.

TABLE 2.8
ALLOCATION

AND EXPENDITURE
FOR TOURISM
DURING SEVENTH FIVE YEAR PLAN

SCHEMES
(As. in million)

Sector

Allocation

Expenditure

Central Sector
(a)
(b)

State

Sector

TOTAL

IDepartmentITDG
I

986.80
400.00

1,511.70
488.70

1,874.70

2,369.50

3,261.50

4,369.90

11

The major schemes for tourism development in the Central Sector included Integrated development of Budhist Pilgrimage centres, construction of inexpensive accommodation
units like Yatrikas and
Yatriniwases at different places to meet the demand of budget tourists, provision of wayside facilities for
highway tourism, development of beach and hill resorts, adventure tourism and watersports, promotion of
fairs and festivals, etc.. Considerable step up was also made in the outlay for overseas publicity and
marketing. In the case of ITOC, the Plan envisaged sustained efforts to improve the profitability of its
existing hotels through different measures including improvement in the occupancy ratio. ITOC was also
assigned the task of constructing hotels of 3-star category as joint venture projects with State Governments.
Study

on Tourism

Policy

(1987)

In recognition of its increased importance, the Lok Sabha Secretariat of Indian Parliament made a
study on the "Tourism Policy of Government of India" in 1987. The study recognized tourism as a catalyst
to economic growth, a melting pot of different cultures and a vital force for world peace.
National

Committee

on Tourism

(1986-88)

A significant development during Seventh Plan period was the constitution of a National Committee
on Tourism (NCT) by the Government to evaluate the economic and social relevance of international and
domestic tourism of India, define the roles of Central Ministries, State Government.
Public and Private
Institutions and recommend proposals for drawing up a long term plan for promoting the growth of tourism
on desired lines. The specific terms of reference of the Committee were the following:Evaluate the economic and social relevance

of international

Define the tourism product, its present and future variation,


and demands.
Determine the requirements
of a balanced,
integrated
measures to achieve the maximum consumer satisfaction.

and domestic tourism in India.


keeping in view the market needs

infrastructure

and facilitation

Develop a planned market strategy based on scientific research and consistent with on-going
responses of the market needs through a realistic communication strategy.
Determine and define the role of the Central Ministries, State Governments,
Public and
Private institutions in the promotion of tourism and suggest a mechanism for monitoring the
performance of these agencies against the well defined economic yardstick.
Assess the manpower needs for development of tourism sector and to recommend appropriate
training programmes for manpower development.
Recommend organizational and institutional measures to systematise
the tourism sector 9n a sound technical and economic basis.

long term planing for

The Committee in its report submitted to the Government in 1988 highlighted the significance of
tourism in the Indian context and made several recommendations
which mainly included a package of
incentives for attracting
private investment in the tourism sector, suggestions
for organizational
restructuring of Central and State institutions and measures for meeting the manpower requirements of the
sector. This report soon became the basis of tourism policy and planning in India. The major initiatives that
followed were (i) establishment of a Tourism Finance Corporation (TFCI) in 1989, (ii) provision of a number
of fiscal and financial incentives for investment in tourism sector, (iii) liberalisation of air charter policy, (iv)
streamlining and simplification of travel formalities, (v) improvement of facillitation services at the airports,
(vi) diversification of tourism resources, and (vii) expansion and improvement of training facilities in the field
of tourism.

12

3.

2.14

Annual

Plans (1990-92)

The Annual Plans 1990-91 and 1991-91 were virtually the continuation
of the policies and
programmes initiated during Seventh Plan except that the Plan allocations were substantially increased
and infrastructural development schemes were given added importance. The Plan outlay and expenditure
during the year 1990-91 and the allocation and anticipated expenditure for 1991-92 are given in table 2.9.

TABLE
ALLOCATION

2.9

AND EXPENDITURE
FOR TOURISM SCHEMES
ANNUAL
PLANS 1990-91 AND 1991-92

DURING
(As. in million)

Central Sector
(a) Department
(b) ITDC
State Sector
TOTAL

(*):

2.15

675.00
155.00
644.30

577.70
89.10
648.04

740.00
160.00
844.60

701.50
98.00
805.50

1,474.30

1,314.84

1,744.60

1,605.00

Anticipated

An Overview

In the context of India, tourism was not even considered as an economic activity till independence
in 1947. It also did not find a place in the constitution of India, though some of its components were
specifically mentioned in the schedules indicating the allocation of business between Central and State
Governments.
The realisation of tourism as an economic force was first expressed in the appointment
of Sargeant Committee,
and the report of the committee clearly spelt out the significance of tourism in
a national perspective.
It led to the establishment the "Tourist Traffic Branch" in the Ministry of Transport
in 1949. The First Five Year Plan of the country, however, did not take note of the tourism phenomenon
and the sector remained without a separate plan allocation. Tourism became a constituent of planning
process in the Second Five Year Plan with a small allocation of As. 33.63 million. The sector received
increasingly greater attention over successive five year plans and the real breakthrough
was achieved
during Sixth and Seventh Plans. Tourism was also accorded the status of an industry during Seventh Planperiod.
The plan-wise allocations and expenditures are summarized in table 2.10.

TABLE
PLAN

2.10

ALLOCATIONS
AND EXPENDITURES
FOR TOURISM
SUCCESSIVE
PLAN PERIODS

OVER

(As. in million)

2.

4.

Second Plan
(1956-61)
Third Plan
(1961-66)
Annual Plans
(1966-69)
Four1h Plan
(1969-74)

15.79

8.69

17.84

13.44

33.63

22.13

35.00

14.51

45.00

36.53

80.00

51.04

24.87

10.37

45.11

31.30

69.98

41.67

348.08

250.53

110.80

163.18

458.88

413.71

13

(As. In million)

51.

Plan

No.

5.
6.
7.

8.

Central

Allocation
Fifth Plan
(1974-78)
Annual Plans
(1978-80)
Sixth Plan
(1980-85)
Seventh Plan
(1985-90)

Sector

State

Expenditure

Allocation

Total

Sector

Expenditure

Allocation

307.59

258.24

285.23

291.37

592.82

549.61

184.29

163.06

267.66

213.25

451.95

366.65

670.00

745.85

1.129.60

1,143.63

1.799.60

1.889.48

2.369.50

3,261.50

4,369.90

1,386.80

2,000.40

1,874.70

9.

Annual Plan
(1990-91 )

830.00

666.80

644.30

648.04

1.474.30

10.

Annual Plan
(1991-92)

900.00

799.50

644.60

805.50

1.744.60

Source:

Expenditure

1.605.00

Planning Commission

The tourism policy was evolved over a period of several years since 1949 and the inputs provided
by various committees and working groups were incorporated in the policy document of 1982. India also
had the previlege of learning from the experiences of other nations while formulating its tourism policy.
In essence, the Government of India has adopted a progressive attitude towards tourism with adequate
safeguards to protect the ecology, environment and socio-cultural systems of the country. Tourism has
now been recognized as an important segment of Indian economy with considerable
potential for
development.

1.314.84

14

Decade
2.
3.4.

CHAPTER III
INTERNATIONAL
3.1

Growth

in Tourist

TOURIST

ARRIVALS

IN INDIA

Arrivals

According to the definition followed in India "an international tourist is a person visiting India on a
foreign passport, staying at least twenty-four hours in the country and the purpose of whose journey can
be classified under one of the following:
i)

leisure

(recreation,

ii)

Business,

holiday, health, study, religion and sport).

family, mission, meeting.

Nationals of Nepal entering India through land routes and the visitors arriving through Indo-Bhutan
border are not included in the foreign tourist arrival statistics.
Though international tourists have been visiting India since ancient times, a count of such visitors
was first taken only during 1951, and on the basis of the same, the country received 16,829 tourists during
that year. Over a period of nine years since then, the visitors to India exceeded 123 thousands per year
by registering an annual rate of growth of about 24.7 per cent. The next decade from 1960 to 1970,
however, witnessed a low rate of growth of about 8.6 per cent per year and arrivals exceeded 280
thousands by 1970. The tourist arrivals received a greater momentum during the decade from 1970 to 1980
and by 1976 the arrivals reached half a million. It thus took about 25 years since 1951 for the tourist arrivals
to reach at least a moderate level and by 1980 it went upto over 800 thousands. The average annual rate
of growth during the decade was about 11 per cent. The period from 1980 to 1990 registered wide
fluctuations in growth rates which ranged fro!n -5.6 per cent to 29.1 per cent. While the growth during the
period from 1980 to 85 was almost negligible, the year 1986 registered a remarkable growth of 29.1
per cent over the previous year. The arrivals also exceeded one million for the first time during that year.
It, thus, took only ten years since 1976 for the arrivals to get doubled and cross the one million mark. The
tempo in growth was maintained till 1 989 with annual increases varying from 6.5 per cent to 7.8 per cent.
The year 1990, however, recorded a decline of 0.5 per cent in tourist arrivals due to various national and
international developments including the Persian Gulf crisis. The average rate of growth during the decadewas,
thus, only 5.2 per cent. Over a period of about four decades from 1951 to 1990, the growth rate
achieved was 11.9 per cent per annum.
As compared to an average annual rate of growth of 7.3 per cent in world tourist arrivals, the growth
of tourism in India has been faster since 1951. The comparative growth rates during different decades are
given in table 3.1.

TABLE 3.1
COMPARATIVE
GROWTH RATES IN TOURIST
WORLD TOURIST ARRIVALS
OVER

Sl.

Annual

No.

Indian Arrivals

Growth

World

Arrivals

24.7
8.6

10.6

1970-1980

11.0

6.0

5.2

4.2

1980-1990

AND

Rate

1960-1970

1950-1960

Sources;

TRAFFIC
TO INDIA
THE DECADES

8.7

1.

India Tourist Statistics

2.

Tourism Trends Worldwide and in Europe 1950-90 by World Tourism Organization (WTO)

15

Though, there has been a phenomenal increase in the tourist arrivals over the years, the share of
India in the world tourism still continues to be around 0.3 per cent. A comparison of world tourist arrivals
with Indian tourism is given in table 3.2

TABLE 3.2
COMPARISON
OF WORLD TOURIST ARRIVALS
WITH INDIAN
(Excluding
the nationals of Pakistan and Bangladesh)
Year

World Tourist
Arrivals

1960
1970
1980
1981
1982
1983
1984
1985
19861987
1988
1989
1990

Sources: 1.
2.

Tourist Arrivals
in India

Million

Index

Number

1960=100

69.3
159.7
284.8
288.8
286.8
284.2
312.4
322.7
330.5
356.8
381.9
414.2
429.3

100.0
230.4
411.0
416.7
413.8
410.1
450.8
465.6
476.9
514.9
551.1
597.7
619.5

India Tourist
Tourism

TOURISM

Million
Number

% Share of

Index

India

1960=100

0.12
0.28
0.80
0.85
0.86
0.88
0.84
0.84
1.08
1.16
1.34
1.33

100.0
0.18
228.1
0.18
650.0
0.28
693.1
0.29
698.8
0.30
718.7
0.31
678.7
0.270.26
679.9
877.4
0.32
945.41007.31086.31080.4
0.33
0.32
0.32
0.31

by World Tourism

Organization

1.24

Statistics

Trends

Worldwide

and in Europe 1950-90

(WTO)

The nationals of Pakistan and Bangladesh were not included in the tourist arrival statistics till 1980
due to difficulties in collecting the data from a large number of land check posts. The arrivals from these
countries were also subject to large fluctuations due to a variety of reasons. All types of analysis of foreign
tourist arrivals in India, therefore, exclude these nationals. However, for providing a total picture, the
comparative figures including the nationals of Pakistan and Bangladesh are given in table 3.3.
TABLE
COMPARISON

OF WORLD

TOURIST

3.3
ARRIVALS

WITH

INDIAN

TOURISM

(Including the nationals of Pakistan and Bangladesh)


Year

World Tourist
Arrivals

Tourist Arrivals
in India

1981

100.0

1982

99.3
98.4
108.2
111.7
114.4
123.5
132.2
143.4
148.6

1983
1984
1985
1986
1987
1988
1989
1990

Sources:

1.2.

% Share

100.0
100.7
102.0

113.4
116.0

0.44
0.45
0.46
0.44
0.39
0.44
0.41

124.3
135.7
133.4

0.42
0.42
0.40

93.3
98.5

India Tourist StatisticsTourism


Trends Worldwide and in Europe 1950-90

16

by World Tourism

Organization

(WTO)

of

3.2

Tourist

Generating

Markets

of India

The primary tourist generating markets of India are West Europe and North America. These two
regions taken together accounted for about 55.6 per cent of the total arrivals during 1990. Individually, the
share of West Europe, has been increasing steadily over the years. It went up from 37.7 per cent in 1970
to 43 per cent in 1990. The major countries in West Europe contributing to the Indian tourism are the United.
Kingdom of Great Britain and Northern Ireland, France and the Federal Republic of Germany. While the
share of the United Kingdom increased from 15.4 per cent in 1970 to 17.7 per cent in 1990, the share of
the other two countries remained almost static over the years. The United Kingdom is, in fact, the top tourist
generating country for India today.
The United States of America was on the top of all the countries till 1973. However, the share of
this country declined steadily over the years and became 9.4 per cent in 1990 as compared to 20.9
per cent in 1970.
West Asia with 8.5 per cent of the arrivals is another region which has emerged as an important
tourist market for India, though its contribution to the world arrivals is relatively insignificant.
Over theyears,
the share of this region in the total tourist traffic to India improved from 4.3 per cent in 1970 to 10.8
per cent in 1986. It, however, declined to 8.5 per cent in 1990 due to economic and political situation
prevailing in that region.
Among the Asian countries, outside the South-Asia region, Japan and Australia are the two major
contributors to Indian tourism. While the share of Japan was about 4.4 per cent during 1990, it was about
2.8 per cent in the case of Australia.
A comparative analysis of tourist arrivals in Indian from different regions and important countries,
excluding the nationals of Pakistan and Bangladesh is given in table 3.4.

YEARWISE

United Kingdom

Federal Rep. of Germany


Rest of West Europe
East Europe

West Asia
South-East

Asia

United States

Canada
Australia
Rest of the world

TABLE 3.4
TOURIST ARRIVALS FROM MAJOR

43,212
(15.4)
16,832
(6.0)
16,279
(5.9)
29,103
(10.4)
6,501
(2.3)
12,170
(4.3)
20,009
(7.1)
9,432
(3.4)
58,793
(20.9)
7,026
(2.5)
11,901
(4.2)
49,563
(17.6)

102,483
(12.8)
58,682
(7.3)
54,736
(6.8)
101,931
(12.7)
20,362
(2.5)
38,801
(4.8)
78,106
(9.8)
30,575
(3.9)
78,608
(9.8)
23,783
(3.0)
22,630
(2.8)
189,453
(2:1.8)

TOTAL

17

119,544
(14,3)
44,091
(5,3)
44,790
(5.4)
96,983

(11.6)
28,774
(3.4)
90,820
(10.8)
54,663
(6.5)
30,573
(3.6)
95,920

(11.5)
29,022
(3.5)
22,045
(2.6)
179,681

(21.5)

MARKETS

229,496
(17.2)
78,001
(5.8)
78,431
(5.9)
186.443
(13.9)
59,624
(4.5)
121,792
(9.1)
82,767
(6.2)
58,707
(4.4)
134,314
(10.0)
40,306
(3.0)
30,443
(2.3)
236,908
(17.7)

235,151
(17.7)
79,496
(6.0)
70,346
(5.3)
187,464
(14.1)
55,083
(4.1)
112,383
(8.5)
87,911
(6.6)
59,122
(4.4)
125,303
(9.4)
41,046
(3.1)
30,076
(2.3)
246,569
(18.5)

3.3

Seasonality

in Tourist

Arrivals

There is a high degree of seasonality in the foreign tourist traffic to India. The winter months of
October to December constitute the peak tourist season followed by the first quarter, January to March.
The summer months of April to June are the lean season with the lowest number of tourist arrivals. On the
basis of the tourist arrival figures for the last 10 years, the quarterly indices of seasonality have been
worked out and given in table 3.5.

TABLE 3.5
aUARTERL

Y INDICES

OF SEASONALITY

1.
2.3.

January-March

4.

July-September
October-December

3.4

IN FOREIGN

ARRIVALS

108.6

77.0
95.2

April-June

Purpose

TOURIST

119.2

of Visit

Holiday and sightseeing is predominantly the main purpose of visit of foreign tourists visiting India
and the percentage of such tourists has been increasing continuously over the years. However, the
percentage of business tourists to India is on the decline. The distribution of tourists according to main
purpose of visit during 1986 and 1990 are given in table 3.6.

TABLE 3.6
DISTRIBUTION
81. No.

2.
3.
4.

5.
6.7.

OF TOURISTS

ACCORDING

Purpose

TO MAIN

PURPOSE

1986

OF VISIT

1990

Number

Per cent

Number

Per cent

Holiday and sight-seeing

613,262

56.8

962,884

72.4

Business

248,270

23.0

227,421

17.1

Visiting friends and relatives

110,036

10.2

74,477

5.6

52,973

4.9

34,579

2.6

13,773

1.3

5,320

0.4

1,960

0.2
3.6

2,660

0.2

22,609

1.7

Study
Conference and mission
Cultural and socia! function
Others
Total

39,776

100.0

1,080,050

1,329,950

100.0

The results of foreign tourist surveys conducted during 1982-83 and 1988-89 also confirm the
steady increase in the percentage of pleasure tourists visiting India. While the pleasure tourists constituted
43.0 per cent during 1982-83,it increased to 57.9 per cent by 1988-89. The comparative estimates are
given in table 3.7.

18

Total

TABLE 3.7
COMPARATIVE
ESTIMATES
OF TOURISTS
PURPOSE OF VISIT AS REVEALED
81. No. Purpose of visit

ACCORDING TO MAIN
BY SURVEYS
Percentage

of tourists
1988-89 survey

1982-83 survey

,.

Pleasure

43.0

57.9

2.

Business

25.2

3.

Visiting friends and relatives

4.
5.

Study

4.6
3.1

22.4
7.3
4.3
3.0

12.9

5.1

100.0

100.0

6.

(VFR)

Pilgrimage
Others

Sources: 1.
2.

11.2

Foreign Tourist Survey 1982-83


Foreign Tourist Survey 1988-89

The percentage of pleasure tourists is the highest in the younger age group below 30 years and
that of business tourists is the largest in the middle age group of 31-50 years. The distribution of tourists
according to age and purpose of visit as per 1988-89 survey is given in table 3.8.

TABLE 3.8
PERCENTAGE

81.No.

Purpose

DISTRIBUTION
OF TOURISTS
MAIN PURPOSE OF VISIT

of visit

BY AGE

AND

Age Group
Above

Below 31

50

Pleasure

65.4

53.6

Business

14.0

28.2

4.6

1.9

9.0
1.5
2.3
5.4

56.6
18.1
7.1
0.6
4.2
13.4

100.0

100.0

100.0

1.
2.
3.
4.
5.

Visiting friends and relatives

Pilgrimage

3.9

6.

Others

10.2

Study

Total
Source:

Foreign Tourist Survey 1988-89

The pleasure tourists constitute the largest percentage in the case of France and Eastern Europe
and the lowest in the case of Asian countries. The largest share of business tourists come to India from
Japan and other Asian countries. The percentage distribution of tourists by nationality and main purpose
of visit according to 1988-89 survey is given in table 3.9.

19

5.6
Total

TABLE 3.9
PERCENTAGE

Region!

DISTRIBUTION
OF TOURISTS BY
MAIN PURPOSE OF VISIT
Purpose

Country

Pleasure

Business

United Kingdom

63.4

24.8

France

74.0

17.2

63.9

Federal

Rep. of Germany

NATIONALITY

AND

of Visit

Others

Total

1.1

3.2

100.0

1.8

2.4

100.0

3.1

1.8

100.0

Study

Pilgrim

5.7

1.8

1.8

2.8

23.5

4.4

3.3

Rest of West Europe

67.4

18.7

3.8

4.7

1.7

3.7

100.0

East Europe

71.6

17.1

8.7

0.0

0.9

6.7

100.0

40.7

27.5

15.7

5.7

1.4

9.0

100.0

44.1

27.9

9.2

3.9

3.4

11.5

100.0

Japan

48.3

32.8

3.1

4.4

6.2

5.2

100.0

United States

59.9

17.8

3.9

5.0

10.4

3.0

100.0

Canada

64.9

21.8

3.7

2.2

2.7

4.7

100.0

Australia

67.5

24.0

5.4

1.6

1.0

0.5

100.0

Rest of the world

41.7

25.0

13.2

8.8

3.1

8.2

100.0

TOTAL

57.9

22.4

4.3

3.0

5.1

100.0

West Asia
South-East

Asia

Source:

3.5

Distribution

7.3

Foreign Tourist Survey 1988.89

of Tourists

by Sex

The percentage of female tourists visiting India has always been low, though there is a gradual
increase in the recent past. The highest percentage of female visitors to India are fro:n Europe and the
United States of America. The distribution of foreign tourists according to nationality and sex as per 198889 survey is given in table 3.10.
TABLE
PERCENTAGE

DISTRIBUTION
OF FOREIGN
BY NATIONALITY
AND SEX

Nationality

TOURISTS

Total

Percentage

Country/Region

Male

United Kingdom

11.5

Female

4.0
4.3

France
Federal Rep. of Germany

6.9
2.1
2.1
12.8

2.5
1.7
5.4
1.0
1.5
0.9
0.7
3.1
1.1
0.3
3.4

72.8

27.2

10.1
4.2
6.2
5.4

Rest of West Europe


East Europe
West Asia
South-East Asia

3.2

Japan
United States

Canada
Australia
Rest of the world

Source:

10

Foreign

Tourist

Survey 1988-89

20

17.1
6.5
6.0
15.5
5.2
7.7
6.3
3.9
10.0
3.2
2.4
16.2

100.0

21

3.6

Age-V'/ise

Distribution

of Tourists

Predominantly the international tourists visiting India are in the economically active age-group of
25 to 54 years. They constituted about 71.4 per cent of the total arrivals during 1989. Of the remainingtourists,
18.3 per cent were below the age of 24 and 10.3 percent were above the age of 54. The highest
percentage of elder tourists are from South-East Asia followed by Japan. The percentage distribution of
tourists according to age and nationality during 1989 is given in table 3.11.
TABLE
DISTRIBUTION

3.11

OF TOURISTS

ACCORDING

Nationality
Country/Region

3.24

25.34

35.44

45.54

55+

United Kingdom
France
Federal Rep. of Germany
Rest of West Europe
East Europe
West Asia
South-East Asia
Japan
United States
Canada
Australia
Rest of the world

21.1
11.9
10.9
11.1
8.3
22.3
17.5
14.0
26.3
20.3
20.1
20.0

25.0
28.0
28.7
32.9
33.4
32.6
26.7
26.3
18.4
26.1
30.8
27.6

25.7
30.6
29.5
30.5
36.4
22.7
26.1
29.6
26.5
26.6
24.3
26.5

16.2
16.8
21.6
17.0
16.7
14.0
14.4
16.8
17.1
16.2
14.2
15.4

12.0
12.7
9.3
8.5
5.2
8.4
15.3
13.3
11.7
10.8
10.6
10.5

Total

18.3

28.4

27.1

15.9

10.3

Source:

3.7

TO

NATIONALITY

AND AGE

Age-Groups

India Tourist Statistics

Distribution

of Tourists

1989

by Occupation

The largest percentage (29.3%) of tourists visiting India are workers in production. sales and
service sectors. Scientists and technicians constitute 19.3 per cent, entrepreneurs and proprietors 10.7
per cent and government administrators 7.6 per cent. The percentage of students visiting India are about
15.4 per cent and house wives 8.0 per cent. The distribution of tourists according to occupation and
nationality during 1989 is given in table 3.12.
TABLE
DISTRIBUTION

OF TOURISTS
Workers

Nationality
Country!
Region
United Kingdom

France
Federal Rep. of Germany
Rest of West Europe
East Europe
West Asia
South-East Asia

23.6
24.8
25.6
32.4
30.7
54.0
30.2
23.8
18.8
32.3

ACCORDING
Scientists!
technicians

20.4
26.9
28.8
25.2

36.3
3.5

Australia
Rest of the world

29.7
28.2

13.5
23.0
25.0
18.3
23.1
9.0

Total

29.3

19.3

Japan
United States

Canada

Source:

India Tourist Statistics

3.12

1989

Students

16.6
10.0
10.4

9.4
6.2
19.9
14.4
12.3
23.3
17.4
13.6
19.1
15.4

TO

NATIONALITY
Entrepreneurs!
Proprietors

8.!9
7.16
8.:B
8. 5
6.2
10. 2
13..2
10..4
8..35

8.
7. 0
18..B

10.7

AND

House
wives

9.1
4.8
5.1

4.1
2.8
7.2
12.1
6.5
6.9
6.9
5.8
13.9

8.0

OCCUPATION
Govt.

Others

Administors

9.111.7

12.3
14.2
10.310.212.5 11.0
10.2
5.3
1.5
3.7
10.9
5.7
10.9
13.1
'5.9
11.8
6.5
10.1
6.3
14.5

4.5

6.5

7.6

9.7

20.6

3.8

Distribution

of Tourists

by Income

According to the foreign tourist survey 1988-89, about 38.3 per cent of the foreign tourists visiting
India were in the lower income bracket with an annual income of As. 200,000 and less. The middle income
group with an annual income of As. 200,000 to 400,000 constituted about 41.4 per cent. The remaining
20.3 per cent were in the income group of over 400,000 rupees. It is obvious from the survey that a large
percentage of foreign tourists visiting India are budget tourists with low levels of income. The distribution
of tourists by nationality and income is given in table 3.13.

TABLE 3.13
PERCENTAGE

DISTRIBUTION

OF TOURISTS

Country/Region

BY INCOME AND
ANNUAL

INCOME (As.'

NATIONALITY

000)

Less than 201

201-400

United Kingdom

38.6

40.8

France

Australia
Rest of the world

36.5
34.5
34.6
29.2
40.4
36.9
36.9
35.0
35.4
39.6
49.0

48.6
42.6
39.2
31.3

22.7
20.4
17.8
26.5
20.8
23.0
23.8
16.4
22.0
21.2
19.4

Total

38.3

41.3

20.4

Federal Rep. of Germany


Rest of West Europe
East Europe
West Asia
South-East Asia

Japan
United States

Canada

Source:
3.9

Foreign

Tourist

Survey

Above

40.8
45.1
47.6
44.3
38.8
40.1

39.3

400

1988-89

Repeat Visits

Of the tourists who visited India during 1988-89, about 41.8 per cent were repeat visitors. Nearly
13.8 per cent of them had visited India more than 4 times earlier. The largest percentage of such tourists
were from West Asia and South-East Asia. The distribution of tourists by nationality and number of visits
is given in table 3.14.
TABLE
PERCENTAGE

3.14

DISTRIBUTION
OF TOURIST BY NATIONALITY
NUMBER OF VISITS

Country/Region

Number

1
United Kingdom

Australia
Rest of the world

63.2
62.8
62.3
65.0
62.7
53.8
49.0
53.9
65.4
71.0
70.0
47.1

Total

58.2

France
Federal Rep. of Germany
Rest of West Europe
East Europe
West Asia
South-East Asia

Japan
United States

Canada

Source:

AND

of Visits
4

5+

Total

13.8

23.2

5.1
5.5
3.8
11.4
7.3

5.1
4.6
1.5
3.8
3.3
4.2
7.9
2.8
3.2
2.0
2.5
7.2

7. 82
15.

100.0
100.0
100.0
100.0
100,0
100.0
100,0
100,0
100.0
100.0
100.0
100.0

16.5

5.7

5.8

13.8

100.0

13.7
18.0
17.3
10.9
19.3
13.6
19.0

25.7
16.3
13.4

8.3

Foreign Tourist Survey 1988-89

22

4.2
6.0

7.9
5.8
3.5
4.0
7.0

8. 6
11.0
14.5
11.2
24. 4
17.1
12.5

9.6
9. 8

3.10

Duration

of Stay

According to the survey, the average duration of stay of foreign tourists in India was 28.4 days. A
notable feature, however, is that about 30 per cent of the tourists stay in India for more than 120 days. The
largest percentage of these tourists are from the United Kingdom and rest of the world which include
mostly Asian countries.
This is probably because these tourists visit a large number of centres in the
country. Over 53 per cent of Australian tourists spent 22 to 30 days and another 35 per cent stay for 31
to 60 days in India. In the case of American and German tourists about 25 to 27 per cent stay in India for
22 to 30 days and almost equal percentage stay for more than 120 days. The distribution of tourists by
nationality and duration of stay is given in table 3.15.

TABLE 3.15
PERCENTAGE

Country/Region

DISTRIBUTION
OF TOURISTS
DURATION
OF STAY

France

8 to

15 to
20

21 to

31 to

14

30

60

61 to
120

Above
120

days

days

days

days

days

days

8.5

20.4

10.2

26.6
27.2

24.1
14.320.6

3.5

10.5
11.5
14.3
18.1
16.4
18.5
16.4
17.0
9.8
19.9
3.5
10.4

45.5
19.6
25.6
28.2
13.7
14.2
8.8
26.2
25.6
22.0
1.3
43.8

8.3

13.4

29.8

Australia
Rest of the world

2.2
1.3
4.2
0.2
8.5
3.7
1.9
2.4
0.3

Total

2.4

Japan
United

States

Canada

Source:

3.11

Evaluation

Foreign

Tourist

of Tourist

AND

Upto

5.1

Federal Rep. of Germany


Rest of West Europe
East Europe
West Asia
South-East Asia

NATIONALITY

7 days

4.5
1.1

United Kingdom

BY

9.3
10.5

7.3
1.2
17.7

0.6
8.6
9.0
12.5
4.3

17.7

35.1
12.9

0.4
7.8
3.0
3.1
4.0
3.3
5.5
2.5
3.5
2.0
0.0
5.4

23.5

19.0

3.6

20.5
33.5
21.5

31.7
18.8
25.6
24.2
53.4

29.9
20.6
36.8

18.4
22.8
17.5

Survey 1988.89

Facilities

in India

One of the objectives of the foreign tourist survey 1988-89 was to evaluate the quality of various
tourism facilities and attractions in India. While the history and culture of India, friendliness of people,
safety and service facilities in hotels received a high rating, the travel facilities in general received poor
rating. The factors which received high (very good or good), average and poor rating along with the
percentage of tourists recording the same are given in table 3.16.

TABLE 3.16
RATINGS OF TOURIST FACilITIES
High

Average

History and Culture


Friendliness
of people
Service/facilities in hotels

(74.80)
(64.80)
(61.70)

Safety

(61.50)

Climate
Hospitality in hotels
Tourist attractions
Communication
Tariff of hotels
Over all cost
Variety of food
Food in hotels

(61.40)
(60.05)
(56.80)
(55.40)
(52.90)
(46.30)
(41.40)
(36.60)

Airports (32.20)

23

AND ATTRACTIONS
Poor

IntercityAir travel
IntercityBus travel
Intercitytaxi travel
IntercityRail travel
Entertainment
Local travel
Guide service

(31.70)
(29.90)
(25.20)
(23.20)
(19.50)
(18.70)
(18.10)

3.12

The Main Features

and Some Issues

International tourism in India is characterised by moderate growth rates, high seasonality, long
duration of stay, a high percentage of repeat visitors, increasing proportion of holiday sectors and low
income tourists. There is a declining trend in the case of United States and an increasing trend in the case
of United Kingdom with regard to the percentage share of touristsfr-om1hese countries. India has not been
able to penetrate into the holiday markets of West Asia, South-East Asia, Japan and United States. The
West Asian tourists are generally repeat visitors with a strong business motivation. The visiting tourists are
generally satisfied with most of the tourist facilities in India except transport services, entertainment and
guide services. The issues that emerge from the analysis are (i) ineffectiveness of tourism promotion and
marketing efforts, (ii) infrastructural inadequacies and absence of an integrated approach in the tourism
development programmes,
(iii) lack of enterprise on the part of the travel industry to promote new
generation tourists, and (iv) low percentage of high income tourists in the visitor arrivals.

24

CHRPTER
INTERNATIONAL
4.1

World

Tourism

IV

TOURISM

RECEIPTS

Receipts

Travel and tourism is the world's largest industry today in terms of its total turnover. According to
a study carried out by Wharton Econometric Forecasting Associates for the World Travel and Tourism
Council, the gross output of travel and tourism industry amounted to $US 2,450 billion during 1989. About
one-twelfth of this turnover was on account of international tourists. While tourism receipts, in general,
create wealth and employment in the tourist receiving regions, international tourist expenditure enters into
the balance of payment accounts of individual countries and is of major significance to them. The estimated
world tourism receipts during 1990 were $US 249 billion.
4.2

Estimation

of Tourism

Receipts

in India

The estimates of tourism earnings in India are compiled by the Reserve Bank of India (RBI) as a
part of balance of payment statistics. The ba$ic data used for the purpose are the returns furnished by the
'authorized dealers' of foreign exchange. All foreign exchange transactions of Rs. 10,000 and above are
categorised as classified receipts and the authorized dealers provide information for each such transaction
about the nationality of the beneficiary, currency and purpose. However, in the case of transactions below
Rs. 10,000, the figures are clubbed together and reported as unclassified receipts. These unclassified
receipts are apportioned according to purpose and country through a survey of unclassified receipts carried
out by the RBI every year. The official estimates of RBI are, however, generally available with a time lag
of about two years. Quick estimates are, therefor worked out by the Department of Tourism on the basis
of tourist arrivals and estimated average expenditure per tourist derived from foreign tourist surveys duly
adjusted for price changes.

4.3

Growth in Tourism Receipts

Over the years, there has been a phenomenal increase in foreign exchange earnings from tourism
in India. In about three decades from 1960-61 to 1990-91, tourism earnings went up from As. 0.15 billion
to As. 24.44 billion, registering an annual rate of growth of about 18.5 per cent. The rate of growth in world
tourism receipts was only 12.7 per cent during the same period. However, the growth rates in successive
decades varied significantly and the growth in world tourism receipts was more in all of them except the
decade from 1970-71 to 1980-81. The comparative figures are given in table 4.1. It could be seen from
the table that the growth rates in tourism earnings do not conform to rates of growth in tourist arrivals.

TABLE 4.1
COMPARATIVE

81. No.

GROWTH

RATES

Decade

IN TOURISM

Average

RECEIPTS

Annual

Growth

Tourism Earnings
in India

12.

1950-1 960

7.9
9.0

1960-1 970

3.4.

1970-1 980

41.4

Receipts

12.6
10.0
19.1

7.7

1980-1 990
Notes:

Rate

World Tourism

(1)

Estimates

(2)

Growth

(3)

Estimate

of tourism earnings

in India refer to the corresponding

9.3
financial

year.

rate in the case of India for the first decade is for a period of nine years from 1951 to 1960.
of tourism earning

for 1990 is provisional.

25

Over the period from 1960 to 1990, the tourism earnings of India grew nearly 163 times as
compared to a growth of over 36 times in world tourism receipts during the same period. The comparativefigures
are given in table 4.2.
TABLE 4.2
COMPARATIVE ESTIMATES OF TOURISM RECEIPTS IN INDIA AND THE WORLD
Year
Index

Receipts

(Rs. billion)

Index

Receipts

($US billion)

1960

100

1970
1980

240

1982

7087
7533

1983

8167

1984

9013

1985

9860

1986

10713

1987

12373

1988

13693

6.87
17.90
102.37
104.31
98.63
98.40
109.83
116.16
139.23
170.46
196.52

1989

16373

209.42

3048

1990

16293

249.30

3629

7773

1981

P:

100
261
1490
1518
1436
1432
1599
1691

2027
2481
2860

Provisional

Though the earnings in rupee terms show an impressive growth over the years, it has remained
almost stagnant during the last ten years in dollar terms. The maximum growth has been during the period
from 1970 to 1980. Growth in tourism receipts is expected to be a function of growth in tourist arrivals as
per the following equation:
(Growth

in tourism

receipts)

= (Growth

in tourist arrivals)

(Rise in average

expenditure

per tourist)

However, it has been noticed that the tourism receipt in dollar terms has declined even when there
has been an increase in tourist arrivals. The obvious conclusion is that the average expenditure per tourist
in dollar terms has declined substantially to negate even the increase in tourist arrivals.
The possible
reasons for such a phenomenon are:

i)

high rate of devaluation

ii)

rise in the proportion

iii)

of rupee in the recent past;

of budget tourists;

leakage of money into black market due to the existence

of a premium for foreign currency;

and
iv)

errors in estimation.

It is evidently true that the devaluation of rupee against dollar has been at a faster rate than the
increase in tourism earnings in rupee terms as given in table 4.3. It is also possible that the shift in the
composition of tourists towards holiday and charter tourists is adversely affecting the average yield pertourist.
Money changing facilities were not easily available in India particularly in small cities and/or after
banking hours. Therefore, the foreign tourists must have been tempted to encash their currency from
unauthorized sources leading to leakage of foreign exchange. With a view to minimise such leakages the
hotels and restaurants holding restricted money changing licenses have been recently made eligible to
provide money changing facilities to tourists. Travel agents and tour operators can also provide money
changing facility to a limited extent. Some other measures taken by the Government to increase foreign
exchange earnings include fixation of dollar fares by Indian Airlines and hotels and de-regulation of hoteltariff.

26

TABLE 4.3
TOURISM

EARNINGS

Tourism

IN RUPEE

AND

DOLLAR

TERMS
Average"
Exchange

Earnings (Million)"

Index

Rupees

Index

Dollars

Index

rate per $

1980-81

11,663

100

1,475

100

7.908

100

1981-82

10,630

91

1,185

80

8.968

113

1982-83

11,300

97

1,169

79

9.666

122

1983-84

12,250

105

1,185

80

10.340

131

1984-85

13,522

116

1,137

77

11.889

150

1985-86

14,794

102

1,209

82

12.235

155

1986-87

16,066

138

1,257

85

12.778

162

1987-88

18,561

159

1,431

97

12.966

164

1988-89

20,538

176

1,418

96

14.486

183

1989-90

24,560(P)

211

1,475

10

16.649

210

1990-91

24,440(P)

210

1,362

92

17.943

227

Year

Economic

.Source

(P)

Survey

1990-91

Provisional

As a result of stagnation/decline
in tourism earnings in dollar terms, the percentage share of India
in the world tourism receipts has gone down to 0.55 per cent during 1990. The comparative figures are
given in table 4.4.

TABLE 4.4
SHARE
Year

OF

INDIA

Tourism
Earnings
(million
Rupees)

IN THE WORLD
Average

Exchange
Rate per
Dollar

TOURISM
Tourism
Earnings
(million $)

RECEIPTS
World
Tourism
Receipts

Percentage
Shareof

India

(million $)

1960

153

4.760

32.1

6,867

0.47

1970

364

7.500

48.5

17,900

0.27

1980

11,663

7.908

1,474.8

102,372

1.44

1981

10,630

8.968

1,185.3

104,309

1.14

1982

11,300

9.666

1,169.0

98,634

1.18

1983

12,250

10.340

1,184.7

98,395

1.20

1984

13,522

11.889

1,137.4

109,832

1.04

1985

14,794

12.235

1,209.2

116,158

1.04

1986

16,066

12.778

1,257.3

139,234

0.90

1987

18,561

12.966

1,431.5

170,456

0.84

1988

20,538

14.486

1,417.8

196,521

0.72

1989

24,560

16.649

1,475.2

209,416

0.70

1990

24,440

17.943

1,362.1

249,300

0.55

Sources: (1) India Tourist Statistics


(2) Economic Survey 1990-91

27

O.0.1O.!

4.4

Tourism

Receipts

as a Percentage

of Gross

Domestic

Product

The tourism receipts as a percentage of gross domestic product was less than 0.1 per cent till
1970- 71. By 1980-81, it increased to about 1 per cent. It, however, started stagnating around 0.6 per cent
thereafter.
It is consistent with the finding that the growth in foreign exchange earnings from tourism has
been slow during the last decade.

TABLE 4.5
COMPARISON

OF

TOURISM

RECEIPTS

WITH

Gross Domestic

Year

GROSS
Tourism
Receipts
(Rs. billion)

Product
(Rs. billion)
151.82
394.24
1,227.72
1,432.56
1,587.61
1,857.792,017.532,320.47

1960-61

1970-71
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88

1988-89

2,572.50
2,916.47
3,491.05

1989-90(a)

3,925.24

Source:
(a):

4.5

DOMESTIC

PRODUCYT
Percentage

o.15

10

O.36
11.66
10.63
11.3025
12.
13.5279
14.
16.07
18.56

0.1

20. 5456

o.!59

24.

0.162

)9

~5
0,',74
O. ~71

56

0.1 55

0.1

54
52

0.1

54

0.1

Economic Survey 1990-91


Quick

estimates

Share of Tourism

Receipts

in the Balance

of Payment

Over the years, tourism has become a major component of India's balance of payment account.
While tourism receipts constituted only 5.9 per cent of the total invisible earnings and was equivalent to
about 2.4 per cent of the merchandise export during 1960-61, it became 19.67 per cEint of the invisible
earnings and equivalent to about 8.70 per cent of the merchandise export by 1989-90. The comparative
estimates are given in table 4.6.
TABLE
COMPARISON

4.6

OF TOURISM RECEIPTS WITH MERCHANDISE


TOTAL INVISIBLE
EARNINGS

EXPORTS

AND
(As. million)

Year

Invisible
Earnings

Exports

Tourism

Percentage

Earnings

to Exports

Percentage
to Invisible
Earnings

1960. -61.71.81
19701980.
1981. .82
1982. .83
1983. .84
1984- .85
1985- .86
1986- .87
1987- .88
1988- -89
1989- .90-91

101,685
119,592
115,776
133,150
163,964
206,467
282,290

1990-

325,273

Source:
(P):

6,305
14,045
65,764
77,655

153
364
11,663
10,630
11,300
12,250
13,522
14,794
16,066
18,561
20,538
24,560 (P)

2,599
4,961
58,902
53,105
56,517
64,321
82,429
78,752
82,744
92,785
109,263
124,839

91,371

(P)

N.A.

24,444

Economic Survey 1990-91


Provisional

28

(P)

2.43
2.59
17.73
13.69
12.37
12.05
11.31
12.78
12.07
11.32
9.95
8.70
7.51

5. 89
7.34
19. 80
20.02
19. 99
19. 05
16. 40
18.78
19. 42
20. 00
18. 80
19. 67A.

N.

In dollar terms, the total invisible earnings and tourism receipts show almost similar pattern. Both
increased substantially during the period 1970-71 to 1980-81, and stagnated during 1980's. However, in
the case of commodity exports there has been a substantial increase during the previous decade. This
must have been perhaps due to the fact that the pricing mechanism in the case of exports would have taken
care of the impact of devaluation of rupee to a greater extent than in the case of invisible earnings. The
comparative figures are given in table 4,7.

TABLE 4.7
COMPARISON

OF TOURISM RECEIPTS WITH TOTAL MERCHANDISE


AND INVISIBLE
EARNINGS
IN DOLLAR TERMS

EXPORTS

($US million)
Year

Invisible

Export Earnings

1960-61
1970-71
1980-81
1981-82
1982-83

Tourism Earnings

Earnings

1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90

1,324.6
1,872.7
8,316.3
8,658.8
9,452.8
9,834.1
10,059.4
9,462.7
10,420.1
12,645.9
14,257.1
16,955.2

546.0
661.5
7,448.6
5,921.4
5,847.0
6,220.6
6,933.4
6,436.7
6,475.4
7,156.1
7,544.9
7,498.2

32.1
48.5
1,474.8
1,185.3
1,169.0
1,184.7
1,137.4
1,209.2
1,257.3
1,431.5
1,417.8
1,475.0

1990-91

18,128.1

N.A.

1,362.0

Source:

4.6

Economic Survey 1990-91

Tourism

Receipts

as Compared

to Major Items of Export

The major items of export of the country at present are (i) Gems and jewellery, (ii) Readymade
garments, and (iii) Leather and leather products.
Export earnings from (i) agricultural products, (ii)
machinery, transport equipment and metal products, and (iii) chemicals and allied products are also high.
However, these are not considered for comparison as each one of them constitute several products. The
comparative figures are given in table 4.8. It could be seen that tourism earnings were next only to the
export earnings from gem and jewellery and readymade garments till 1989-90, though it became lower than
the export value of leather and leather products also during 1990-91.
TABLE
TOURISM

RECEIPTS

AND

4.8

MAJOR

ITEMS

OF

EXPORT
(As. million)

Year

Gem &

Readymade
Garments

Jewellery

Leather &
Leather
Products

Tourism
Receipts

1960-61
1970-71
1980-81
1981-82
1982.83
1983-84
1984-85
1985-86
1986.87
1987-88
1988-89

10
448
6,184
8,115
10,148
12,941
12,371
15,207
20,740
26,130
43,920

10
294
5,503
6,412
5,908
7,256
9,533
10,670
13,310
18,180
20,991

280
802
3,897
4,248
4,146
4,925
7,241
7,699
9,220
12,510
15,223

153
364
11,663
10,630
11,300
12,250
13,522
14,794
16,066
18,561
20,538

1989-90(P)
1990-91(P)

52,955
52,100

32,242
40,424

19,509
25,539

24,560
24,440
-.

Source:
(P):

Economic Survey 1987-88 and 1990-91


Provisional

29

An important factor to be noted is that gems and jewellery exports depend heavily on the imports
of pearls and precious stones. During the year 1990-91, these imports amounted to As. 37,323 million
against a total export value of As. 52,100. Thus the net retention ratio in the case of gems and jewellery
was only about 28 per cent. In the case of ready made garments, the value of imports of different varieties
of fibres during 1989-90 was about As. 2,610 million. These imports, however, related to the total export
of textiles valued at As. 67,975 million. The leakages due to import in the case of readymade garments is
thus about 4 per cent, giving a net retention ratio of about 96 per cent. "A Comparative Study of Incentives
for Invisible Earnings through Tourism" conducted by the Indian Institute of Foreign Trade in the year 1985,
estimated that the foreign exchange outflow on account of tourism would be about 7 per cent. In the case
of leather and leather products also the import requirement of dyeing, tanning and colouring materials
constitute about 7.5 per cent of the value of exports. Thus, in terms of net foreign exchange earnings,
tourism used to be on the top as compared to various export items. However, it has been pulled down to
the second position by readymade garments during 1988-89 and to third position by leather and leather
products during 1990-91.

4.7

Expenditure

Pattern

of Tourists

According to the 'Foreign Tourist Survey 1988-89', the average expenditure of non-package
tourists excluding the nationals of Pakistan and Bangladesh was As. 17,770 during that year. The foreign
exchange available to Pakistan nationals to visit India is $US 45 and the same in the case of Bangladesh
nationals is $US180 per tourist.
The average expenditure per tourist was the highest in the case of Australia. followed by the
Federal Republic of Germany, France, Japan and United States and was the least in the case of United
Kingdom. The average duration of stay was the largest in the case of Asian tourists including South-Ea~.t
Asia and East European tourists except Japanese nationals. The comparative figures are given in table

4.9.

TABLE 4.9
ESTIMATED
AVERAGE
DURATION
EXPENDITURE OF FOREIGN
(Non-package
Nationality
(Country/Region)

France
Federal

Rep. of Germany

Rest Of West Europe


Eastern Europe

25.77
31.53
24.32
32.14
38.93

Rest of the world

21.17
36.21
20.73
28.98
28.92
27.98
43.92

All Nationalities

31.11

West Asia
South-East

Asia

Japan
United

States

Canada
Australia

tourists)
Total

Av(\rage

Duration of
Stay
(in days)

United Kingdom

OF STAY AND PER CAPITA


TOURISTS (1988-1989)

30

Expenditure
per Tourist
(in As.)

Expenditure
per Day per
Tourist
(in As.)

13,641

529

20,159

639

21,075

866

18,904

588

14,318

367

17,687

835

12,381

341

19,027

917

19,001

655

19,314

667

22,042

787

19,932

453

17,770

571

The findings of the 1988-89 survey are at variance with the results of 1982-83 survey. According
to the earlier survey, the West Asian tourists were the highest spenders in India followed by the visitors
from United States of America. However, in terms of average expenditure per day per tourist, Japanese
nationals took second position after West Asia. These changes are more likely to be because of the shifts
in the composition of tourists from these countries. The comparative figures as per 1982-83 survey are
given in table 4.10.
TABLE 4.10
ESTIMATED

AVERAGE

EXPENDITURE

DURATION

OF

OF FOREIGN

STAY

TOURISTS

(Non-package

tourists)

of

France
Federal Rep. of Gennany
Rest Of West Europe
Eastern Europe
West Asia
South-East Asia

Japan
United States

Canada
Australia
Rest of the world

Expenditure
per Day per
Tourist
(in As.)

Expenditure
per Tourist

Stay
(in days)

United Kingdom

PER CAPITA

(1982-1983)

Total

Average
Duration

Nationality
(Country/Region)

AND

(in As.)

26.86
27.72
25.38
31.21
40.10
23.56
30.21
15.32
23.75
26.35
28.76
35.62

8,120
6,741
7,693
7,001
8,290
12,082
3,719
7,550
9,207
8,272
8,100
7,869

302
243
303
224
207
r;1~

27.55

8,008

291

388
314
282
221

The expenditure pattern of international tourists on various items of consumption also appears to
have changed to some extent froni 1982-83 to 1988-89. While the expenditure on food and accommodation has come down from about 54 per cent in 1982-83 to about 49 per cent in 1988-89,the expenditure
on entertainment has gone up from 2.6 per cent to 9.3 per cent. The expenditure on shopping also showed
substantial reduction from about 25 per cent in 1982-83 to 15.6 per cent in 1988-89. These differer.ces
may be due to the structural changes that have taken place in the tourism industry between 1982 and 89.
There has been a definite improvement in the tourist recreational facilities in the country during the period.
This must have perhaps resulted in a larger share of expenditure on entertainment
by the foreign tourists.Simultaneous
the percentage of business tourists visiting the country has come down resulting in a
decline in the expenditure on shopping. The pattern of expenditure of tourists during 1988-89 and 198283 by nationality are given in tables 4.11 and 4.12.
TABLE
EXPENDITURE

PATTERN

4.11

OF TOURISTS

BY NATIONALITY

-1988-1989

Percentage Expenditure
Nationality

Accommodation

(Country/Region)

Food!

Entertainment

Shopping

Drinks

Internal

Others

Travel

United Kingdom
France
Federal Rep. of Germany
Rest Of West Europe
Eastern Europe
West Asia
South-East Asia
Japan
United States
Canada
Australia
Rest of the world

33.81
32.44
30.35
30.94
29.87
33.42
32.34
25.24
28.63
33.91
33.02
29.51

17.70
21.06
16.67
19.81
20.39
17.07
15.21
20.30
19.80
16.64
15.35
18.13

8.70
10.03
10.60
10.56
9.91
7.73
7.02
9.61
10.53
7.97
9.98
8.54

15.26
13.92
14.86
13.54
18.27
15.72
18.28
18.13
15.59
17.26
13.58
15.46

20.02
18.64
22.84
20.63
15.59
20.89
18.81
13.79
18.09
17.89
19.60
19.40

4.51
3.91
4.68
4.52
5.97
5.17
8.34
12.93
7.36
6.33
8.47
8.96

All Nationalities

30.71

18.53

9.29

15.63

19.06

6.78

31

24.84

TABLE
EXPENDITURE

PATTERN

4.12

OF TOURISTS

BY NATIONALITY-1982-1983

Nationality

(Country/Region)
United Kingdom

35. 53

20.87

2.88

22. 10

15.47

3.15

France

33. 19

21.46

1.23

23. 42

17.56

3.14

34. 84

21.22

1.26

25. 87

13.92

2.89

34. 83

22.83

1.57

22. 04

15.77

2.96

Federal

Rep. of Gemlany

Rest Of West Europe

35. 54

23.44

2.41

25. 04

12.12

1.45

West Asia

32. 78

19.77

4.87

23.29.
96

9.08

9.54

South

27. 08

16.19

2.13

50

14.85

10.25

43. 29

21.05

1.69

19. 41

13.18

1.38

33. 00

18.2820.56

1.49

29.27.
15

14.0215.7015.4113.06
4.07

Eastern

Europe

East Asia

Japan
United

States

Canada

30. 22

Australia
Rest of the world

27.88

All Nationalities

4.8

Main Findings

1.27

06

5.19

2.49

30. 80

30. 72

19.13
21.85

4.30

3.41

27.00

3.95

33.45

20.50

2.61

13.63

4.97

and Some Issues

Tourism has already become a major source of foreign exchange earnings for the country and its
capacity to bridge the gap in the balance of payments account has been well recognized. The rate of growth
in tourism earnings has been the highest (41.4 per cent) during the decade 1970-80 and it then reduced
to 7.7 per cent in the last decade. Tourism receipts in dollar terms, however, remained stagnant over the
last ten years, though in rupee terms it increased by about 110 per cent. The high rate of devaluation of
rupee has been one of the reasons for such a stagnation.
There have been structural changes in the tourist expenditure pattern and demand characteristics
during the last few years. These changes also would have contributed to the low rate of receipts per tourist
in dollar terms. The issue before the Government is, therefore, the choice of a strategy and/or action plan
for accelerating the growth of tourism earnings in dollar terms. The options available are (i) intensive
promotion in the tourist generating markets to increase the volume of tourist traffic to India, (ii) price out
the budget tourists and increase the yield per tourist, (iii) encourage the tourists to spend more in India by
providing better facilities including entertainment and recreational avenues, (iv) concentrate marketing
efforts on selected high spending tourist regions, and (v) prevent the leakage of tourism earnings into black
market. Each of these options have to be carefully considered while formulating a strategy and future
development plans as the choice of a wrong option could lead to disastrous results. Obviously, the existing
infrastructural
support and investment priorities would become the key elements in the choice of the
strategy. The structural adjustments initiated by the present Government in the ~ndian economy and the
prevailing foreign exchange crisis are also important factors requiring attention. In the given scenario, the
best choice, perhaps, would be an optimum combination of all the available options. The diversification
process initiated by the Government during the Visit India Year could become successful if it is supported
by proper upgradation
of tourist facilities, better quality control and effective marketing in selected
countries.

32

5.1

CHAPTER

DOMESTIC TOURISM IN INDIA


Evolution

of Domestic

Tourism

Travel for pilgrimage and learning has been an integral part of Indian culture, ever since the
beginning of its civilization.
Several centres of learning and religious worship thus developed allover the
country since ancient times. This gave further impetus to the mass movement of people from one place
to another. Development of traditional industries and trade created another stream of travellers.
Several
trading routes were established and traders started frequenting the centres of trade from distant places.
The ancient rulers gave due recognition to these travellers and created many wayside facilities like inns,sarais,
dharamshalas and caravans for their benefit. These formed the tourism infrastructure of India in
those days. Thus, India has been experiencing massive movement of domestic tourists for severalcenturies.

A few centuries ago the Moghul rulers introduced pleasure tourism by building luxurious palaces
and enchanting gardens in places of natural scenic attraction.
It was, however, during the period of British
rule in India, that domestic tourism received a new direction and meaning. The establishment
of railways
and export/import
houses at port towns introduced qualitative and quantitative changes in the Indian
business tourism.
In addition, the construction
of circuit houses, dak bungalows and forest lodges
provided the infrastructure for leisure and wild life tourism. Several hill stations were also developed during
the period which became the core of Indian leisure tourism. The emergence of a large 'urban middle class'
coupled with better transport and communication facilities has created a new class of holiday and leisure
tourists in the contemporary
India.

5.2

Dimensions

of Domestic

Tourism

Although. the importance of domestic tourism has been recognized by the country, reliable
statistical information on its volume and growth is lacking. In fact, a precise definition of dom~stic tourist
was attempted only during 1977. According to the definition, a domestic tourist is "a p'3rson who travels
within the country to a place other than his usual place of residence and stays at hotels or in dharamshalaslsarais/musaf
etc., for a duration of not less than 24 hours or one night and
for not more than six months at a time for any of the purposes of (a) Pleasure, (b) Pilgrimage, religious and
social functions, (c) Business, conferences
and meetings, and (d) Study and health.
A pilot study on domestic tourism was commissioned by the Government in 1981 to estimate the
volume of domestic tourist movements in the country. The study covered 22 centres selected purposively
to include the entire spectrum of tourists. The selected centres included 3 metropolitan cities, 3 businesscentres,
7 hill stations and beach resorts, 3 historical cities and 6 pilgrim places. Based on the results ofthis
survey, the number of domestic tourists during 1981 was estimated to be 14 million.
In a report titled "Indian Tourism: Performance and Potential 1981-91", the Indian Institute of Public
Opinion (IIPO) conjectured that the volume of domestic tourist traffic in India during 1986 would be in the
range of 134 to 164 million including about 120-150 million pilgrim tourists.
The astronomical dimensions of domestic travel in India can also be seen from air and rail transport
statistics. The Indian Railways carry about ten million people per day and the Indian Airlines carry about
ten million passengers per year. The passenger statistics of Indian Airlines and Indian Railways since 1985
are given in table 5.1. These figures are indicative of the gigantic nature of Indian domestic tourism
although most of them may not be tourist as per definition.

33

TABLE 5.1
NUMBER

OF PASSENGERS
AND

CARRIED
RAILWAYS

BY INDIAN

AIRLINES

(Million Nos.)

Year

Domestic

1985-86
1986-87
1987-88
1988-89
1989-90

Total

Foreign

9.64
9.35

0.49
0.52

9.91
9.55
9.41

0.530.56

10.13
9.87
10.44

3,433
3,580
3,792
3,500
3,653

10.11

9.85

0.44

As per the figures compiled by the Department of Tourism based on the reports received from the
State Governments,
the total number of domestic tourist visits in the accommodation
establishments
during 1990 were about 62.38 million. Though these figures suffer from the problems of comparability andcoverage,
there has been a steady growth of about 21.4 per cent per annum in the domestic tourist visits
during the period from 1987-1990.
These figures are given in table 5.2.

TABLE 5.2
NUMBER

5.3

The Structure
According

OF DOMESTIC TOURIST VISITS

Year

Number

1987

34,816,649

1988

38,337,474

1989

50,588,850

1990

62,319,113

of Domestic

Tourism

to the pilot study on domestic tourism, the motivations

of travel for the domestic tourists

were:(i)

leisure

(56, ,8,3,5
%}%}

(ii)

Business

(21,

(iii)

Pilgrimage

(13,

(iv)

Education

(2, ,6

%}

(v)

Health

(2, ,0

%}

(vi)

Social functions

(2, 2

%}

(vii)

Others

(1,

34

%}

6 %}

51.No.

Demographically,
67.2 per cent of the tourists were males and 32.8 per cent were females. While
16.3 per cent of the tourists were aged below 12 years, 38.1 per cent were in the age group of 13 to 29 years
and 40.3 per cent were aged between 30 and 55 years. The remaining 5.3 per cent were above the age
of 55. A large proportion of about 63.8 per cent travelled with family while 17.5 per cent travelled alone.
The remaining 18.7 per cent travelled with friends. The occupational distribution of the3e tourists was as
given below:
(i)

Business

(ii)

Profession

(iii)

Service

(iv)

Agriculture

(v)

Students

(vi)

Others

The major tourist generating regions in the country were the industrially developed states of
Maharashtra, West Bengal, Uttar Pradesh and Gujarat besides the Union Territory
of Delhi. They shared
among themselves about 50 per cent of the total domestic tourists. The four metropolitan cities of Bombay,
Calcutta, Delhi and Madras alone generated about 25 per cent of the tourists. It clearly indicates that the
growth of tourism essentially depends upon the industrial and business prosperity.
About one-third of the domestic tourists belonged to the middle income group. The average
household income of these tourists was in the range of Rs. 10,001 to Rs. 20,000. The lower income group
in the range of Rs. 6,001 to Rs. 10,000 constituted about 20.4 per cent. These two categories taken
together thus accounted for about 53 per cent of the total tourists. The pattern was almost the same in all
types of tourist centres except that the higher income groups mostly visited tourist resorts, business centres
and metropolitan cities. It clearly indicates that domestic tourism in India is a mass movement and not an
elite activity. The distribution of tourists according to their annual household income is given in table 5.3.

TABLE 5.3
DISTRIBUTION

OF TOURISTS

HOUSEHOLD
Annual
Metrocities

TO ANNUAL

INCOME
Percentage

HHD Income
Range (Rs.)

1.2.3.4.Below
5.6.

ACCORDING

Business

Hill

Ceritres

Stations
& Beach
Resorts

of tourists

Historical
Sites

Pilgrim

All Places

Centres

6,000

7.5

2.1

3.7

2.4

6.5

4.9

6,001

to 10,000

16.1

25.3

12.5

23.1

31.3

20.4

10,001

to 20,000

27.8

30.6

25.8

32.6

to 30,000

23.1

15.8

23.8

20.6

21.5

30,000

to 50,000

17.0

16.8

19.6

52.1
19.0
2.8

32.3

20,001

5.9

12.8

Above

50,000

8.5

9.4

14.6

0.6

3.4

7.8

35

SI.No.

The average length of stay of domestic tourists in their places of visit was estimated from the pilot
study as 5.4 days. A similar survey of domestic tourists was conducted in 55 centres during 1980-81 as
a part of the study on "Employment Potential of Tourism in India". By combining the results of both studies,
the average length of stay of domestic tourists was estimated as 5.6 days. Both the surveys revealed that
the domestic tourists tended to stay more at metropolitan cities than at historical places and pilgrim centres.
It was a clear indication that the duration of stay of domestic tourists was influenced by the availability of
tourist facilities. The estimates of length of stay in different types of centres as revealed by the Pilot Study
and the pooled data are given in table 5.4.

TABLE 5.4
ESTIMATED
Type

AVERAGE

LENGTH

OF STAY

of Centre

Average
As per Pilot

Metropolitan

OF DOMESTIC

cities

Length

of Stay

As per Pooled

Study

Data

7.6
4.3
6.0

7.9
4.5

2.

Business

3.

Hill stations

4.

Historical

sites

2.8

2.9

5.

Pilgrim centres

4.4

4.5

All Centres

5.4

5.6

5.4

centres
and beach resorts

The Expenditure

Pattern

of Domestic

TOURISTS

6.2

Tourists

According to the pilot study, the average per capita expenditure of domestic tourists per day was
As. 76.60 for all the centres taken together. However, there were large variations from centre to centre.ln
general, the average expenditure of a tourist per day was high at the metropolitan cities (As. 116.0) and
was extremely low at historical sites (As. 33.50) and pilgrim centres (As. 24.90). These estimates were
significantly lower than those obtained by the survey on "Employment Potential of Tourism in India". As
per this survey, the average expenditure per tourist per day was As. 126 including intercity travel exlJenses
of As. 46.52. The pilot study on domestic tourism did not include the intercity travel expenses. Further,
there were differences in the methods of data collection followed in both the surveys. While in the case
of employment potential survey the expenditure figures were collected for the previous day, the pilot study
attempted to collect the data for the entire period of travel. The expenditure pattern revealed by the
employment potential survey was, therefore, found to be more acceptable and is given in table 5.5.

Significance

of Domestic Tourism

Domestic tourism is one of the most vibrant expressions of Indian heritage. It is the single unifying
force which helps to achieve understanding between various linguistic, religious and communal grC'ups
living in different parts of the country. In the contemporary India, the phenomenon of domestic tourism with
its vibrant and changing dimensions can be expected to make an even greater contribution towards
strengthening
the fabric of the unity of India.

36

TABLE 5.5
EXPENDITURE

51.No.

Item of Expenditure

1.
1.1
1.22.

Accommodation

2.1
2.2
2.33.4.

Air

PATTERN

OF DOMESTIC

and Food

In hotels
In restaurants
Intercity travel
Rail
Others
Intracity travel

4.1
4.2
4.3
4.4
4.5
4.6
4.75.

Shopping
Gem and Jewellery

Silk and cotton


Readymade garments
Leather products
Handicrafts
Others
Entertainment

TOTAL

5.6

Infrastructural

Estimated
Expenditure
(As. crores)

Percentage

258.41
171.98
86.43
244.23
102.26
94.62
47.35
57.69
253.12

31.0
20.6
10.4
29.3
12.3
11.3
5.7
6.9
30.3
2.7
0.7

23.12
5.79
79.93
44.35
20.71
42.41
36.81
20.82

Carpets

834.27

Development

for Domestic

TOURISTS

9.6
5.3
2.5
5.1
4.4
2.5

100.0

Tourism

Despite its great significance in the national integration and development. domestic tourism has not
received adequate attention in the process of development planning. Accommodation facilities in the from
of Dharamshalas, Choultries, Agarshalas, etc., were built around the places of worship only during ancient
times through the efforts of private individuals, institutions and rulers. The British administration then bui:t
a number of circuit houses, dak bungalows and hill resorts. These were basically for the use of Britishers
and Civil Servants. Government intervention in the development of domestic tourism in independent India
was first initiated during Second Plan period, when it was decided to assist the State Governments on an
equal sharing basis to build accommodation
units suitable for domestic tourism.
The scheme was
continued during the Third Plan period and thereafter it was transferred to the State sector. The scheme
was again taken up by the Central Department of Tourism during Sixth Plan to build youth hostels for the
promotion of youth tourism in the country. During the plan period itself twenty youth hostels were built
and they were transferred to the Department of Youth Affairs. A society known as Bharatiya Yatri Awas
Vikas Samiti was also set up during Sixth Plan for the construction of low priced accommodation
units
called "Yatrikas" at pilgrim centres. The construction of ten yatrikas were completed and four were under
progress by the end of Seventh Plan. The concept of "Yatrinivas" was developed during Seventh Plan
period for providing accommodation facilities to budget tourists. These were sixty bed budget hotels in
the pattern of tourist bungalows. By the end of Seventh Plan twelve Yatriniwases were constructed and
twenty three were under construction.
Yet another attempt by the Government to create basic facilities
at places of pilgrimage and tourist importance is the scheme for construction of camping sites taken up
during
1991-92.
These efforts, though useful are grossly inadequate to meet the growing needs of
domestic tourists.

37

5.7

Some Features

of Domestic

Tourism

A desirable feature of domestic tourism is its ability to sustain the industry during lean periods of
international tourism by providing an alternative for demand substitution.
It is also less s9nsitive to various
international
developments
and internal problems which generally affect foreign tourist traffic.
The
demands and expectations of domestic tourists are also usually reasonable and do not impose heavy
investment burdens on the industry. The infrastructure base for domestic tourism can also become a
second line of supply at least for some classes of foreign tourists during peak foreign tourist seasons.
These features of domestic tourism make it a desirable development option for a country with limited
capital resources.

5.8

Future

Prospects

of Domestic

Tourism

in India

The statistical information available from various sources clearly indicates that a large percentage
of domestic tourists are holiday and business tourists. It would be of interest to note that about 60 per cent
of the room occupancy in approved categories of hotels is due to domestic tourists. The economic and
social conditions prevailing in India today are precipitous for a revolutionary growth in domestic tourism.
The economic growth achieved by the country over the years has created a powerful middle class with
reasonable affluence and disposable income. By and large these persons, also do have access to paid
holidays in the form of Leave Travel Concession (LTC) and incentives.
Socially, they are exposed to
greater awareness
and are having a stronger desire for self realisation than for materialistic comforts.
Travel for holiday and sightseeing is thus putting greater pressure on all forms of tourism infrastructure.
It will be further aggravated by the increased number of business travellers.
It is, thus, obvious that any
future development plan should have a strong bias for domestic tourism and it would be totally inconsistent
to make any investment exclusively for international tourism.

5.9

Some

Issues

A major issue which emerges in the given scenario is the problem of degradation and carryingcapacity.
The tourist attractions of the country are mainly a multitude of archaeological
remains and
monuments which are generally in a state of dereliction and despair; meadows, mountains and beaches
which are ecologically fragile and the entire biotic component of nature including wild life and forests which
are constantly being endangered by human intervention.
These resources, if not adequately protected
would get degraded and lead to disastrous results. It is thus obvious, that a new set of enterprises must
be developed for the preservation and protection of such attractions if they have to be used as tourism
products.
As in a manufacturing industry, the products are produced by an enterprise or factory, in a
service industry like tourism, the products are preserved or protected by the enterprises.

The Departments of Environment and Archaeology of both the Central and State Governments are
armoured with a number of acts and rules for the protection of ecology and environment and preservation
of monuments.
These acts and rules, however, do not recognize the existence of tourism phenomenon or
for that matter any developmental activity. The vision of these agencies is also, therefore, often oriented
towards protecting the rules and regulations and not necessarily that of protecting the monuments or the
environment.
The funds available with them are also limited to take up any developmental
activity forthemselves
The force of tourism, however, does not wait for any protective or development measures to
become operational.
There is, therefore, an urgent need to resolve this dilemma by identifying specific
areas separately for conservation and development around each monument and other tourist attractions.
Development plans, thus, prepared also must be implemented effectively.
The investment required for
such an exercise and for their continued maintenance could be generated from the to;.Jrists by adopting
suitable pricing policies. After all, they would be willing to pay the cost of maintaining those attractions for
their own enjoyment.
The tourist industries coming up in the development zones should also collectively
own the responsibility of maintaining the protected monuments and areas either by paying a development
cess or by undertaking the activity for themselves. The introduction of such a scheme for each monument
and other places of tourist attraction is imperative to take into account the phenomenon of mass movement
of tourists.

38

An associated problem requiring attention is the carrying capacity of each tourist centre. The
physical, biological and infrastructural featur.3s impose restrictions on the number of visitors that can be
received by any particular area during a given period of time. A clear assessment of this carrying capacity
and regulation of tourist flow are particularly important for areas with fragile ecology and social systems.
This must, therefore, form a part of the tourism development programme for any area.

39

CHAPTER

INCOME

6.1

AND

EMPLOYMENT

VI

EFFECTS

OF TOURISM

Tourism Industry

The significance of tourism in the national economy is measured mainly in terms of its contribution
to Gross National Product (GNP) and employment.
It is, however, difficult to estimate those parameters
due to the very nature of the industry. Tourism is a composite industry consisting of various segments
which provide goods and services to both the local population and tourists.
A definite allocation of the
production of these segments between the two classes of consumers is generally not possible.
The main components
(i)

Hotels and other accommodation

(ii)

Restaurants

(iii)

Travel agents and tour operators

(iv)

Transport

(v)

Tourist resorts and complexes

(vi)

Entertainment

(vii)

Shopping

(viii) Conference

6.2

of the tourism

units

services
facilities

facilities

including sales outlets for curios, handicrafts,

and Convention

(ix)

Adventure

(x)

Guide services.

Gross

industry are:

and recreational

Value Added

by Hotel

souvenirs,

etc.

facilities
sports facilities

and Restaurant

Sector

Hotel and restaurant sector has been recognized as a separate entity in the National classification
of industries and, therefore, finds place in the statistical description of the economy. The estimates of value
added by the sector are separately compiled by the Central Statistical Organization (CSO).
These
estimates (table 6.1) indicate that the contribution of the sector to the gross domestic product has become
more than three times over a period of about 10 years.

TABLE 6.1
ESTIMATES
Year

OF GROSS VALUE ADDED BY HOTEL


RESTAURANT
SECTOR

Gross Value Added


at Current Prices

Index

(As. millions)
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89

Source:
(P)

100
121
137
154
175
199

25,770

248
295

8,740
9,310
10,160
10,460
10,900
11,510
12,160
12,830
14,240

29,140

333

15,031

220

21,660

National Accounts
Provisional

Gross Value Added


at 1980-81 Prices

Statistics,

Index

(As. millions)

8,740
10,610
11,980
13,460
15,320
17,390
19,270

1989-90(P)

AND

1991

41

100
106
116
120
125
132
139
147
163
172

6.3

Economic

Census

and Follow-up

Surveys

The structure and characteristics of hotel and restpurant industries are available from the economic
censuses and follow-up surveys undertaken by the SCO. For the purpose of these surveys, an enterpri$e
has been defined as an undertaking engaged in production and/or distribution of goods and/or services not
for the sole purpose of own consumption.
The enterprises were further classified as establishments and
own-account
enterprises based on the employment of hired workers.
Establishments
were those
enterprises employing atleast one hired worker on a fairly regular basis. Those units which were owned
and operated with the help of household labour only were regarded as Own-Account Enterprises (OAE).
The establishments which had six or more workers (including both household and hired) were classified as
Directory Establishments (DE) and those which had less than six workers were termed as Non-Directory
Establishments (NDE). The follow-up surveys were generally taken up for the unorganized sectors which
in the case of hotels and restaurants included all the units which were not in the public, corporate and
cooperative sectors. However, the Enterprise Survey 1983-84 covered all the units except those in the
public sector. In short, hotels and restaurants are classified according to the following scheme:

Unorg

Establi

Directory
Establishments

Non-Directory
Establishments

The first economic census covering non-agricultral enterprises was carried out in 1977 which was
followed-up by sample surveys during 1978-79 and 1979-80. The 1979-80 survey covered hotels and
restaurants also along with trade, transport, storage and warehousing services. The second economic
census was carried out in 1980 along with the house listing operations of 1981 population census.
According to this census, there were 806,867 hotel and restaurant units in India except Assam state and
of these 264,293 were establishments and 542,574 were own-account enterprises.
Enterprise survey 1983-84 was conducted as a follow-up of economic census 1980 covering (i)
hotels and restaurants, (ii) transport, (iii) storage and ware housing, and (iv) services. Geographically the
survey covered the entire country, except Arunachal Pradesh, Mizoram, Andaman & Nicobar Islands and
Lakshadweep.
Ladakh region including Leh of Jammu & Kashmir. and rural areas of Nagaland were also
excluded from the survey. The hotel and restaurant survey included (i) lodging places with or without
arrangement for meals, other prepared food and refreshments, (NIC code 691), (ii) Oharamshala type
lodging places (NIC code 941), and (iii) eating and/or drinking services such as prepared meals, food and
rereshment, cold and/or hot drinks, etc.(NIC code 690). According to the survey. there were 1,007,942
hotel and restaurant enterprises in the country during 1983-84 excluding those in the public sector. Ofthese,
78,522 were directory establishments including 67,546 restaurants. The distribution of these units
by type of activity and category is given in table 6.2.

The final status of Jammu and Kashmir has not been agreed upon by India and Pakistan.

42

51.No.
4.
2.
3.

TABLE 6.2
ESTIMATED

Type of Activity

NUMBER

OF HOTEL AND RESTAURANT


BY TYPE OF ACTIVITY

Rural!
Urban

Number

DE

ENTERPRISES

of Enterprises

NDE

CAE

ALL

Restaurants

Hotels and other


lodging

places

Oharamshala type
lodging places

All activities

The estimated employment in the hotel and restaurant sector as per the survey was over 2.79
million and of these about 1.26 million were in the rural areas. Activitywise the restaurant sector accounted
about 93.8 per cent of the employment and the balance 6.2 per cent was accounted by hotels anddharamsh
Categorywise about 25.6 per cent of the employment was in the directory establishments,
27.4 per cent was in the non-directory establishments and the balance 47 per cent was in the own accountestablishm
The estimated employment by type of activity is given in table 6.3.

TABLE 6.3
ESTIMATED

Sl.No.

Type of Activity

EMPLOYMENT
IN HOTEL AND RESTAURANT
BY TYPE OF ACTIVITY
Rural!
Urban

Number

DE

NDE

Restaurants

Hotels and other


lodging places
Dharamshala type
lodging places

4.

All activities

43

SECTOR

of Employees

CAE

ALL

51.No.
2.
3.
Sl.
4.
3.

As obvious, the average employment


per unit was the highest in the case of directory
establishments in urban areas and it was the least in respect of own-account enterprises in rural areas. The
overall average employment was 2.77 persons per unit. The estimated average employment per unit by
type of activity is given in table 6.4.

TABLE 6.4
AVERAGE

EMPLOYMENT

Type of Activity

PER ENTERPRISE
IN THE HOTEL
SECTOR BY TYPE OF ACTIVITY

Rural!
Urban

1.

AND

RESTAURANT

Average Employment per Enterprise


NDE
CAE

DE

ALL

Restaurants

Hotels and other


lodging

places

Oharamshala type
lodging places
All activities

The value of output of all the hotels and restaurant units covered in the survey was estimated to
be As. 45,520 million. Of the total output, As. 42,228 million (92.9 percent) was contributed by restaurants,
As. 3,164 million (7.0 per cent) by hotels and the rest by Oharamshala type lodging places. It may be noted
that the share of directory establishments
in the total output was only 39.4 per cent while the other two
categories put together accounted for more than 60 per cent of the receipts. The estimated value of output
by type of activity is given in table 6.5.

TABLE 6.5
ESTIMATED

Type of Activity

No.

VALUE OF OUTPUT IN THE HOTEL AND


SECTOR BY TYPE OF ACTIVITY
Rural!
Urban

RESTAURANT

Value of Output (Rs. million)


NDE
OAE

DE

ALL

Restaurants

368
Hotels and other

2,796

lodging places

Oharamshala type
lodging places
All activities

44

2.
2.
3.

The total input cost of hotel and restaurant units covered in the survey was As. 32,430 million
including material costs, electricity and fuel, stationery, postage, repair and maintenance,
transport
charges, services purchased, etc. By deducting the input cost from the value of output, the gross value
added was estimated to be As. 13,090 million. It constituted about 28.8 per cent of the total output. The
estimates of expenses and the value added figures by type of activity are given in tables 6.6 and 6.7.

TABLE 6.6
ESTIMATED

COST OF INPUTS OF THE HOTEL AND


SECTOR BY TYPE OF ACTIVITY

Rural
Urban

Restaurants

1,845
9,444

Total

3,226
5,009

11,289

8,235

RESTAURANT

6,415
4,729
11,144

11,486
19,182
30,668
.

3.

Hotels and other

Rural
Urban

lodging places

Total

Oharamshala type

89
1,220

129
210

13
66

231
1,496

1,309

339

79

1,727

Rural

-2

Urban

24

-2

1,934
10,673

3,357
5,243

-33

lodging places

4.

All activities

6,428

4,795

11,719
20,711

TABLE 6.7
ESTIMATES

Sl.

OF GROSS VALUE ADDED IN THE HOTEL


SECTOR BY TYPE OF ACTIVITY

Type of Activity

No.

Rural!
Urban

AND

RESTAURANT

Gross Value Added (As. million)


DE

NDE

OAE

ALL

Restaurants

Hotels and other

Rural
Urban

lodging

Total

places

Rural

4.

137

1,300
1,091

310

-3

36

1 437

-3

Dharamshala type

Urban

22

18

lodging places

Total

22

21

.-43

All activities

Rural
Urban

844
4,503

1,455
2,395

2,214
1,679

4,513
8,577

Total

5,347

3,850

3,893

13,090

-40

An analysis of the employment pattern clearly indicates that the employment/output


ratio per
million rupee is the highest in the case of own-account enterprises in rural areas and it is the least for
directory establishments
in urban areas. The estimated employment-output
ratios are given in table 6.8.
45

3.

TABLE 6.8
ESTIMATED
EMPLOYMENT
OUTPUT RATIOS IN THE HOTEL
RESTAURANT
SECTOR BY TYPE OF ACTIVITY

AND

Restaurants

2.

Hotels and other


lodging places
Dharamshala type
lodging places
All activities

According to the input-output transactions table, the total output of the hotel and restaurant sector
during 1983-84 was Rs. 49,392 million. By subtracting the contribution of the private sector (Rs. 45,520/
= million) as estimated from the enterprise survey, the value of output of public sector was Rs. 3,872/
=million. The value added by public sector was estimated as Rs. 632/=million giving a total value added
figure of Rs. 13,090 million. The value added ratio thus worked out to be 27.782 per cent.
The number of persons employed in the public sector units was estimated as 154,106 by
multiplying the labour-output ratio of the directory establishments with the value of output. Thus, the total
employment in the hotel and restaurant sector during 1983-84 was 2,947,650 giving an average employment output ratio of 59.679 persons per million rupee of output.
The estimates of employment in the hotel and restaurant sector are also available from economic
census 1980 and population census 1981. These estimates, however, differ to the extent of about 24
per cent. While the total employment as per economic census 1980 was 2,080,503 the estimates as per
1981 population census was 1,583,160. Both the figures did not cover the state of Assam. The variation
in estimates may be due to differences in the approach and exclusion of part time and casual workers in
the population census.
Assuming that the ratios of value added to gross output and employment to output at constant
prices have not undergone any significant change over the years, the estimated gross receipts, value
added and employment in the hotel and restaurant sector can be calculated for all the years from 1983-84.
These estimates are grJen in table 6.9.
TABEL

6.9

ESTIMATES
OF GROSS VALUE ADDED, GROSS RECEIPTS
AND EMPLOYMENT
IN THE HOTEL AND RESTAURANT
SECTOR
Year

1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90(p)
(p) =

Gross Value
Added
(As. million)

Gross Value
of Receipts
(Rs. million)

Price
Index
(80-81=100)

13,722
15,320
17,390
19,270
21,660
25,770
29,140

49,392
55,144
62,594
69,361
77,964
92,758
104,888

129.05
140.55
151.08
158.47
170.38
186.97
193.87

provisional

46

Total
Employment

2,947,650
3,021,652
3,190,841
3,370,891
3,524,146
3,947,507
4,166,707

Sl.
10.

6.4

Travel

Agents

and Tour Operators

Though the economic significance of hotel and restaurant sector can be easily assessed, it is
difficult to estimate the contribution of other segments of tourism industry due to non availability of data 8;nd
problems of apportioning.
The travel agents and tour operators constitute a major operational segment of
tourism industry. However, there is hardly any data available on their contribution to the national economy.
A survey of the segment was, therefore, attempted as a part of this project. The data available indicate that
the foreign exchange receipts of the segment amounted to As. 1,172.86 million during 1988 and
As. 1,601.63 million during 1989. There were about 231 travel agents and 119 tour operators approved
by the Government of India. These establishments handled 210,988 foreign tourists during 1988 and
235,778 tourists during 1989.
6.5

Expenditure

Pattern

of Tourists

The impact of tourism in all the direct recipient sectors can be estimated by using the expenditure
pattern of tourists.
In the case of international tourists, the pattern as revealed by 1982-83 survey was
considered to be more appropriate as the input-output table related to 1983-84. The study on "Employment
Potential of Tourism in India, 1981" provided the estimates in respect of domestic tourism. These estimates
were then adjusted for trade and transport margins to conform to the pricing system of input-output table.
The pattern of expenditure as used for the analysis is given in table 6.10.

TABEL 6.10
PATTERN

OF EXPENDITURE

Sector

No.

1.
2.
3.
4.
5.6.

OF INTERNATIONAL

Sector

International
Tourists

Food products

excluding

sugar

14

Beverages
Tobacco

17

Wool, silk and synthetic

19

Textile products

20

Wood and wood products

24

Leather

37

Metal products except machinery


and transport equipments

44

Miscellaneous

11.
12.
13.
14.

48

Railway transport

49

Other transport

52

Trade

53

Hotels and restaurants

15.

59

Other services

Covered

products

and leather

in hotel and restaurant

fibre textiles

including

wearing

apparel

except fumiture

products

manufacturing

TOURISTS
Expenditure
Domestic
Tourists

0.30
0.80
2.27
0.91

Other crops

15

7.
8.
9.

DOMESTIC
Percentage

No.

13

AND

industries

services

services

3.87
5.20
3.60
1.33

8.00
5.00
2.93
2.00

0.62
5.61

O.50

4.29
9.34
5.97
48.31

11.24.
5. 56
31. 00

7.58

2. 50

6.414070

sector

It can be seen from table 6.10 that 48.31 per cent of the expenditure of the foreign tourists was
received by the hotel restaurant sector, 4.29 per cent by railways, 9.34 per cent by other transport services,
7.58 per cent by other service sectors and the remaining by the various items of shopping. The Transport
and Trade Margins (TTM) of the shopping items worked out to be 5.97 per cent as per the ratios estimated
by the Central Statistical Organization.
In the case of domestic tourists, 31 per cent of the receipts was
received by the hotels and restaurants, 11.4 per cent by railways, 24.7 per cent by other transport services,
2.5 per cent by other services sector and the remaining by the shopping establishments.
In this case, the
entire expenditure on accommodation and food has been retained with hotels and restaurants as its further
break-up to other components was not available.
47

The survey of domestic tourists undertaken as a part of the study on "Employment Potential of
Tourism in India, 1981" estimated the total volume of domestic tourists during that year as 14 million. The
aggregate domestic tourist expenditure was also estimated as As. 12,500 million. Since, these estimates
were considered to be under estimates, an attempt was made to revalidate them by using enterprise survey
results. As per the survey, the total value of output of hotels and supplementary accommodation units was
As. 7,114 million during 1983-84.
The value of receipts from foreign tourists during that year, was
As. 12,250 million.
Assuming that the proportion of expenditure of foreign tourists in hotels as 20.95
per cent, their share in the total output of hotels was As. 3,669 million. By subtraction, hotel, expenditure
of domestic tourists was estimated as As. 3,445 million. Since the ratio between their expenditure in hotels
and restaurants was 1.98: 1, the value of receipts from domestic tourists by restaurants could be estimated
as As. 1,740 million. Thus, the aggregate expenditure
by domestic tourists in the hotel and restaurant
sector was As. 5,185 million. As it constituted about 31 per cent of the expenses as revealed by the survey,
the total expenditure
of domestic tourists during 1983-84 was estimated to be As. 16,726 million.
Considering a price rise of about 13 per cent between 1981-82 and 1983-84, this estimate compared well
with the survey results of 1981.
It would be interesting to note that the contribution of tourists, both foreign and domestic, to the total
output of restaurant sector was only about 9.44 per cent. The rest was contributed by the local people. A
study undertaken. earlier, however, considered the total output of hotel and restaurant sector as tourism
receipts. Though it may be justified from an industry perspective, it would not be right to ascribe it totally
to tourists.
Value Added

Output

Ratios

The estimation of gross value-added from tourism sector involved the multiplication of the share of
each recipient sector with the respective ratios of value added to gross output.
These ratios were
estimated for each sector by using the input-output table.

Labour-Output Ratios
The estimation of direct employment due to tourism in different recipient sectors necessitated the
use of labour-output ratios. These ratios were, however, not available from any single source and as such
they had to be estimated by using data available from various sources. The data sources used and the
methodology of computation are explained in the following paragraphs.
Manufacturing
industries are divided into factory and non-factory sectors.
All establishments
employing 10 or more workers, if using power and 20 or more if not using power are covered in the factorysector.
All the remaining establishments come under the purview of non-factory sector and are further
divided as directory establishments,
non-directory establishments and own-account enterprises.
In the
case of factory sector, yearly data on total employment and value of output are availabl~ at 3-digit level of
industrial classification from the summary results of Annual Survey of Industries. Follow-up surveys of the
second economic census conducted during 1984-85 give similar data for non-factory sector. The report
on directory establishments
gives industry-wise data on number of establishments,
number of persons
employed, value of output per establishment, etc.. at 3-digit level of industrial classification.
The aggregate
value of output of each industry is thus obtained by multiplying the per establishment value with the
estimated number of establishments.
Estimates of full time and part time employment given separately are
added together as part time employment formed only a small proportion of the total employment.

Government

of India, Economic

Benefits

of Tourism,

1987

48

The
i)
iv)
iii)
ii)

In the case of non-directory


and own-account enterprises,
industrywise data on number of
establishments,
number of persons employed and output per establishment are available at 2-digit level of
industrial classification from the survey of unorganized manufacturing sector. The industrywise aggregate
output is obtained from these estimates by multiplying the per establishment value with the estimated
number of establishments.
The industrywise estimated employment is also obtained by adding the full time
and part time employment.
Since no adjustments have been made for the part-time employment which
constitutes about 13 per cent, the employment coefficients calculated from the data would be slightly on
the higher side.
In order to obtain the labour coefficients, the estimates of output as well as employment have to be
added for all the three segments of manufacturing industries, namely factory sector. directory and nondirectory plus own-account enterprises. However, the data for unorganized sector related to 1984-85 and
as such they had to be adjusted to conform to 1983-84 prices. For this, it was assumed that the relations
in physical terms between labour and output would be the same for both 1983-84 and 1984-85. The value
of output was thus deflated by using the price indices at 2-digit level of industrial classification as obtained
from National Accounts Statistics (NAS), 1989. It is implicitly assumed that the industrywise price increase
in the value of output will be the same as the corresponding increases in the gross value added. It is also
assumed that the price increase obtained for an industry at 2-digit level will apply to all the industries at
3-digit level under the particular industry.
Some of the sectors of the input-output table like textiles, leather products, metal products,
electrical equipments and miscellaneous
manufacturing
industries were at 2-digit level of industrial
classification.
For these sectors, the estimates of value of output and employment for all the three
segments were simply added to get the total output and total employment.
The remaining sectors under
manufacturing,
except organic and inorganic heavy chemicals, are either disaggregated
at 3-digit level
(e.g. sugar, agricultural
machinery, fertilizers) or grouped at 3-digit level (e.g. beverages, tobacco
products, miscellaneous
food products).
For these sectors, the values of output as well as estimated
employment at 3-digit level of aggregation are added for the factory sector and the directory establishments
and the labour coefficients were worked out. Since the data used did not cover the non-directory and ownaccount establishments,
some adjustments had to be done in the ratios. This was done by using the
following

procedure:
labour output ratios were first calculated
3-digit level.

for the factory and directory

The ratios were then calculated at 2-digit level by aggregating


in the factory and directory establishments.

establishments

all the industries

at

at 3-digit level

The labour output ratios were also calculated at 2-digit level by taking all the three segments
viz factory. directory and non-directory establishments
and own account enterprises together.
The ratio between the figures estimated at step (iii) and step (ii) is used to adjust the figures
obtained at step (i) for all the sectors falling under the particular industry.
The following

exceptions

are, however,

made in applying the above procedure:

(i)

It is assumed
miscellaneous

that the entire production of food products in the non-directory sector are
food products and sugar is not produced in the non-directory sector.

(ii)

There is no production of petroleum products and miscellaneous


products of coal and
petroleum in the non-directory sector and the entire production in the sector relates to rubber
products.

(iii)

The entire production of chemicals in the non-directory sector


chemicals.
It is assumed that there is no production of fertilizers,
directory sector.

49

goes to miscellaneous
drugs, etc., in the non-

(iv)

Cement is considered

to be not produced

in the non-directory

sector.

(v)

Railway equipment is also considered to be not produced in the non-directory sector. The
entire production in the non-directory sector is, therefore, taken as other transport equipment~.

Organic heavy chemicals and inorganic heavy chemicals were two sectors in the input-outputtable,
but both belonged to the same industry group 310 at 3-digit level of industrial classification.
The
same labour coefficient were, therefore, assumed for both the sectors.
In the case of sectors other than manufacturing industries, the estimates of work force as on
1.10.80 were given by CSO in a publication titled "National Accounts Statistics:. Sources and Methods
1989". The estimates of main workers were available at 3-digit level and those of marginal workers were
available at 1-digit level. For some of the sectors, the marginal workers were relatively insignificant, while
for others the proportio,l of these workers was quite high. The marginal workers for each group at 1-digit
level were divided among it's sectors on the basis of the proportion of main workers. The sector-wise work
force estimates Jhus obtained (main workers and marginal workers) were related to the corresponding
estimates of the value of output for 1980-81. These were then brought forward to 1983-84 prices by using
the price indices estimated from the National Accounts Statistics.
It is implicitly assumed that in physical
terms the relationship between labour and output for 1980-81 remained the same for 1983-84.
The
estimates of value of output were, however, not available for some of the sectors. In such cases the gross
value added estimates were converted into gross value of output by using the ratios of value added to
output based on input-output tables. In the case of hotel and restaurant sector, the ratios were available
from Enterprise Survey 1983-84. These ratios along with the value added/output ratios for all the sector
of the input-output table are given in table 6.11.

TABLE 6.11
SECTOR -WISE

Sec.
No.

RATIOS OF VALUE
AND EMPLOYMENT

Sector

ADDED TO GROSS
TO OUTPUT
Value Added
Output Ratio

Employment
Output
Ratio per Million
Rupees of Output

309.012
309.012
108.827
309.012
20.414
6.602

1.

Food crops

7118

2.
3.

Cash crops

7881

4.
5.

Other crops

8171

Animal

4938

6.
7.

Forestry

Plantation

crops

and logging

8.

Fishing
Coal and lignite

9.

Crude petroleum,

10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.22.

8599

husbandry

9007

5190

82.192
36.303
2.068
42.197
102.037
22.197
40.109
11.808
43.055
80.543
27.373
41.071
156.074
157.839
233.825

2173

14.580

9288
6840
natural gas

8841

Iron ore

8291

Other minerals

8084

Sugar

1969

Food products

1166

Beverages

3169

Tobacco

3895

products

Cotton textiles
Wool, silk and synthetic

3411
textile

2209

Jute, hemp and mesta textiles

2884

Textile

products

5248

Wood and wood products


Furniture

2787

and fixtures

Paper and paper products

50

OUTPUT

Sec.

Sector

Value Added
Output Ratio

No.

23.
24.
25.
26.
27.28.
29.
30.

Printing,

publishing

and allied activities

.3751

Leather and leather products

.3227

Plastic and rubber products

.2504

Petroleum

products

.0537

Coaltar products

.0577

Inorganic

.1520

heavy chemicals

Organic

heavy chemicals

.3240

Fertilizers

.2009

31.32.33.34.
Paints, varnishes
Pesticides,

and lacquers

.2414

drugs and other chemicals

.2471

Cement

.3305

Non-metallic

35.36.

mineral

products

Iron and steel industries

.4154

and foundries

.2316

Other basic metal industries

.1641

37.38.

Metal products

.3500

39.40.

Agricultural machinery
Machinery for food and textile industries

except machinery

.2587
.2839

Other machinery

.3293

41.42.43.44.45.46.
Electronic47.48.
and 49.50.
electrical

machinery

.3131

Railway transport equipment


Other transport equipment

.4347

Misc. manuf. industries

.4341

.3702

Construction

.3646

Electricity

.3728

Gas and water supply

.4185

Railway transport

.4483

Other transport
Storage

services

services

.4324

and warehousing

.6613

51.52.53.54.
Communication
Trade

55.56.

.8471
.6982

Hotels and restaurants

.2778

Banking

.7925

Insurance
Ownership

57.58.59.60.
Education

.8598

of dwellings

.8934

and research

.8374

Medical and health

.3407

Other services

.5857

Public admn. and defence

6.8

Estimates

of Value Added

1.0000

and Employment

Employment Output
Ratio per Million
Rupees of Output
31.621
50.869
28.267
0.395
5.381
4.706
4.706
2.427
4.911
9.463
6.078
111.388
7.037
6.012
36.103
6.197
13.813
13.965
8.585
22.227
7.043
98.574
18.726
14.088
25.561
31.110
35.954
30.273
59.644
45.871
59.679
22.375
9.745
0.008
82.351
41.667
154.420
74.503

Due to Tourism

The linkage between gross value of output of hotel and restaurant sector and the foreign exchange
earnings from tourists is based on enterprise survey 1983-84 and foreign tourists survey 1982-83.
According to this linkage, about 14.4 percent of the total output of the sector was from accommodation units
and of this the contribution of foreign tourists was about 29.95 per cent of their expenditure in India. The
rest of the output of the accommodation sector was, therefore, due to domestic tourists. Their expenditure
in restaurants was about 50.495 per cent of their expenses in hotels and both taken together constituted
about 31 per cent of the total tour expenditure.
Assuming that the ratios and coefficients described above
did not undergo significant changes over the years, the contribution of foreign and domestic tourists to the
national economy in terms of gross receipts, value added and employment were estimated for the years
1983-84 to 1989-90. The data used for the same and the results are given in table 6.12.
51

TABLE 6.12
ESTIMATES

OF VALUE OF RECEIPTS,
VALUE ADDED AND EMPLOYMENT
INTERNATIONAL
AND DOMESTIC TOURISTS

Year

Value of Receipts
by Hotels and Restaurants
(Rs. million)
Domestic
Tourists

Foreign
Tourists

(1)

(2)

1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90(p)

(3)

DUE TO

Tourism Receipts
(Rs. million)

All

All

Foreign
Tourists

Domestic
Tourists

(4)

(5)

(6)

(7)
28,965

Tourists

Tourists

5,918

5,181

11,099

12,250

16,715

6,532

5,855

13,522

18,886

32,408

7,147

6,898

12,387
14,043

14,794

22,244

37,038

7,761

7,789

15,550

16,066

25,126

41,192

8,967

8,529

17,496

18,561

46,073
62,170

9,922

10,843

20,765

20,538

27,512
34,978

11,865

11,659

23,524

24,560

37,610

55,516

(Cant'd)
Year

Gross

Value Added

Total Employment
(As. million)

(As. million)
Foreign
Tourists

(1)

(2)

1983

.84

1984

.85

1985

.86

1986

.87

1987.

.88

1988.

-89

1989.

.90

Domestic
Tourists

(3)

All

Foreign

Tourists

Tourists

Domestic
Tourists

(4)

(5)

(6)

All
Tourism

(7)

4,541
5,013
5,484
5,956
6,881

6,445
7,282
8,578
9,688
10,608

10,986

871,744

12,295

883,527

1,031,313

14,062

899,269

1,130,066

2,029,335

15,644

931,047

1,216,893

2,147,940

17,489

1,000,445

1,239,302

2,239,747

7,614
9,105

13,487
14,502

21,101
23,607

1,042,227

1,483,446

2,525,673

1,163,398

1,488,910

2,652,308

994,083

1,865,827

1,914,840

It could be noted that the gross value added from tourism increased by about 115 per cent over a
period of 6 years from 1983-84 to 1989-90, registering an average annual rate of growth of 13.6 per cent
at current prices. However, compared to the total value of gross domestic product, the contribution of
tourism sector is still very small and is about 0.6 per cent. In the case of employment due to tourism, the
average growth rate has been about 6 per cent per annum since 1983-84. The details of segment-wise
gross output, value added and employment are given in tables 6.13.1 to 6.19.3
It is important to note that the estimates given in the tables 6.13.1 to 6.19.3 correspond only to the
contribution of tourists and do not include the entire contribution of hotel and restaurant sector. The total
impact by considering hotels and restaurants as tourism industries is given in table 6.20.

52

1,071
81.
Segments

TABLE 6.13.1
ESTIMATES

OF GROSS

VALUE

OF RECEIPTS

FROM

TOURISM

1983-84
SI. No.

Segments

Hotels and restaurants

Railway transport

Transport

44.1

4.2
4.3
4.4

Gross-Receipts (Rs. million)

5,917.975

3,733.800

5,181.581
1,905.484
4,128.549
5,081.292

services

525.525

services

1 ,144.150

Shopping
Food and beverages

11,099.556
2,431.009

5,272.699
8,815.092
524.300

524.300

Wood silk syn. fibre textiles

474.075

Textile prod. inc. wearing apparel

637.000

1,811.257
1,472.739

Wood and wood products


furniture

441.000

1,337.182
835.739
489.743

162.925
75.950

334.296
83.574

497.221
159.524

except

4.5
4.6

Leather and leather products

4.7
4.8

Misc. manufact.

Other services

Total

Metal products except


machinery and trans. equip.
industries

687.225
731.325
928.550

Trade

.417

929 .341
417 .869

12,250.000

16,714.780

930.743

1,758.642
1,660.666
1,346.419
28,964.780

TABLE 6.13.2
ESTIMATES

OF GROSS

VALUE ADDED
1983-84

No.

Gross

Hotels and restaurants


2

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles

4.54.6

FROM

services

services

Textile prod. inc. wearing apparel


Wood and wood products
furniture

except

Domestic
Tourists

All
Tourists

1,644.013
235.593
494.730

1,439.443
854.229

1,623.018
172.997
104.723
334.298
122.907

1,785.185
2,121.567
0
295.383
438.596
136.491

3,083.456
1,089.822
2,279.915
3,744.585
172.997
400.106
772.894
259.398

52.576
26.582

107.877
29.251

160.453
55.833

298.324
510.611
543.852

465.102
648.866
244.746

1,159.477
788.598

6,445.169

10,986.376

Metal products except


machinery and trans. equip.

4.7

Misc. manufact.

Trade

Other services

Total

il")dustries

Value Added (Rs.


-. million)

Foreign
Tourists

Leather and leather products

4.8

TOURISM

4,541.207
53

763.426

TABLE 6.13.3
ESTIMATES

No.

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.5
4.6

DUE TO TOURISM

Segments

4.2
4.3
4.4

OF EMPLOYMENT
1983-84

353, l' 7949

services

services

317, 6! ~2
12, g'
99, 4

Textile prod. inc. wearing apparel


Wood and wood products
furniture
leather

except

69,

and leather products

130,'
77,:300

61 :17

17,005
3,017

2,742

4.7
4.8

Misc. manufact.

Other services

Total

871,744

994,083

industries

731

36,1

8,288

Metal products except


machinery and trans. equip.

7!
18!
0503437

23, ,3' 707719

Wood silk syn. fibre textiles

66: 2,'5,19,!D,:3,:9,!9,15,!

309,:
59,:
148,'
412,1

16, ,341, ,1:37

2:
41

221

141

25,293
5,759

67,742

105,614

33,547

42,630

173,356
76,1 77

143,387

64,527

207,914

Trade

1,865,827

TABLE 6.14.1
ESTIMATES

OF GROSS

VALUE

OF RECEIPTS

FROM

TOURISM

1984-85
81. No.

Gross

Segments
Foreign
Tourists

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

6,53:2.,J.I2.!1.!B..3.:

services

services

Wood silk syn. fibre textiles


except

4.5
4.6

Leather and leather products

4.7
4.8

Misc. manufact.

Other services

Metal products except


machinery and trans. equip.

Trade

Total

81. 629
232280
411
478
676D10
:>94~55506742
438
655
575507
299301
370580656~07
144

industries

2,15:

1,26:
4,12

4,66-

481

5,74

792

All
Tourists

3.:
5,85- 4.13.14.11.:D.I4.:12,387.154

581

52:
70:3.5..

(Rs. million)

Domestic
Tourists

571

Textile prod. inc. wearing apparel


Wood and wood products
furniture

Receipts

2,733.104
5,927.810
360
9,862.866
0684303361
578.742

1,511
94-

55:

2,034.185
1,647.447
1,040.153

179.843
83.836

377.721
94.430

557.564

758.584
807.264
1,024.968

1,210.596
1,050.065
472.151

1,969.180
1,857.329
1,497.119

13,522.001

18,886.052

32,408.053

54

178

81.

TABLE 6.14.2
ESTIMATES

OF GROSS

VALUE

ADDED

FROM

TOURISM

1984-85
No.

Segments

Hotels and restaurants

Railway transport

34.4.1

Transport

1,814.722
260.056
546.102

services

services

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles


Textile prod. inc. wearing apparel
Wood and wood products
furniture

except

4.5
4.6

Leather and leather products

4.7
4.8

Misc. manufact.

Other services

Total

1,791.547
190.960
115.597
369.010
135.669

industries

2,017.083
2,397.162
0
333.754
495.570
154.222

58.035
29.343

121.891
33.051

179.926
62.394

329.301
563.631
600.324

525.520
733.1 55

854.821
296.786
876.863

5,012.750

7,282.408

Metal products except


machinery and trans. equip.

Trade

3,441.151
1,225.250
2,563.185
4,188.709
190.960
449.351
864.580
289.891

1,626.429
965.194

276.539

12,295.158

TABLE 6.14.3
ESTIMATES

OF EMPLOYMENT

DUE TO TOURISM

1984-85
No.

Segments

Employment

Hotels and restaurants

Railway transport

Transport

4.
4.1

4.2
4.3
4.4
4.5
4.6

357,953

services

16,570

services

Shopping
Food and beverages

678,766

78,070

153,997

195,690

321,987

428,059

750,046

Wood silk syn. fibre textiles


Wood and wood products
furniture

61,500

41,693
23,686

Textile prod. inc. wearing apparel

320,813

23,686

13,152

37,974

100,763

135,322

70,548

80,196

150,744

17,642

26,042

3,130

5,909

except

Leather and leather products

8,400
2,779

Metal products except


machinery and trans. equip.

4.7

Misc. manufact.

4.8

Trade

34,000,

Other services

45,325

Total

industries

68,658

883,527

55

51,126236,085

109,569
44,226
66,944

178,227
78,226
212,269

1,031,313

1,914,840

TABLE 6.15.1
ESTIMATES

OF GROSS

VALUE

OF RECEIPTS

FROM

TOURISM

1985-86

51.No.

Gross
Foreign
Tourists

1
2

Hotels and restaurants

Transport

4
4.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles

Railway transport
services

1,381.760
4,509.212
633.1 83
572.528
769.288
532.584

Textile prod. inc. wearing apparel


Wood and wood products
furniture

4.5
4.6

leather

4.7

Misc. manufact.

4.8

Trade

Other services

Total

except

Metal products except


machinery and trans. equip.

6,895.930

14,042.912
3,170.586

5,494.499

6,876.259

11,271.673

6,762.461
0

633.1 83

1,779.595

2,352.123

1,112.247

1,881.535

651.777
444.899
111.225

829.943
883.202

industries

All
Tourists

2,535.923

196.760
91.723

and leather products

(Rs. million)

Domestic
Tourists

7,146.982
634.663

services

Receipts

1,184.361

641.659
202.948

1,121.385

1,236.818
556.1 24

2,255.;
2,120.1
1,677.!509

14,794.001

22,244.937

37,038.938

1,425.900

TABLE 6.15.2
ESTIMATES

OF GROSS

VALUE

ADDED

FROM

TOURISM

1985-86
81. No.

Segments
843020
431519
689854821
473

Gross

Segments
Foreign
Tourists
Hotels and restaurants

Railway transport

Transport

1,985.,
284.:

services

597.,

services

Value Added (Rs. million)


Domestic
Tourists

1,915.1
1,136.,
2,375.1
2,823.'497

All
Tourists

3,901. 120
1,421.,373294
2,973.,
4,783.!573
208. 924583429
519.
987.,
330.1081

4
4.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles

126.

Textile prod. inc. wearing apparel

403. 722

Wood and wood products


furniture

148.,431

393. 112
583.'707
181.1650

63.494
32.103

143.569
38.929

207.063
71.032

360.278
616.652
656.795

618.983
863.547
325.722

1,480.199
982.517

5,484.293

8,577.583

14,061.876

4.5
4.6

1,960.1076924471

208:

except

Leather and leather products


Metal products except
machinery and trans. equip.

4.7
4.8

Trade

Other services

Total

Misc. manufact.

industries

56

979.261

St.

TABLE 6.15.3
ESTIMATES

OF EMPLOYMENT

DUE TO TOURISM

1985-86

81.No.

Segments

Employment
Domestic
Tourists

Foreign
Tourists
1

Hotels and restaurants

Railway transport

Transport

44.1

4.2
4.3
4.4

services

services

Shopping
Food and beverages

364,330

351,533

16,865

67,389

84,254

42,436

168,743

211,179
796,771

24,108

469,048
0

13,387

41,610

102,558

148,280

250,838

71,805

87,875

159,680

19,331
3,430

327,723

Wood silk syn. fibre textiles


Textile prod. inc. wearing apparel
Wood and wood products
furniture

except

4.5
4.6

Leather and leather products

8,550

Metal products except


machinery and trans. equip.

2,829

4.7
4.8

Misc. manufact.

5
6

industries

All
Tourists
715,863

24,108
54,997

27,881
6,259

69,881

120,061

189,942

34,606

48,461

83,067

Other services

147,914

73,354

221,268

Total

899,269

Trade

1,130,066

2,029,335

TABLE 6.16.1
ESTIMATES

No.

Hotels and restaurants


Railway transport

Transport

44.1

Shopping
Food and beverages

4.5
4.6

VALUE OF RECEIPTS
1986-87

FROM

Gross

Receipts

Segments

4.2
4.3
4.4

OF GROSS

7,761.485
689.231

services

services

Wood silk syn. fibre textiles


Textile prod. inc. wearing apparel
Wood and wood products
furniture

except

Leather and leather products


Metal products except
machinery and trans. equip.

4.7
4.8

Misc. manufact.

Other services

Total

Trade

industries

1,500.565
4,896.917
687.625
621.754
835.432
578.376

TOURISM

(Rs. million)
--

7,788. 986337063231
2,864.
6,206.
7,638.
0061288185

2,010.
1,256.
736.

15,550.471

3,553.568
7,706.628
12,535.148

687.625
2,631.815
2,091.720
1,314.561

213.678
99.609

502.515
125.629

71 6.1 93

901.303
959.140

1,610.561
1,396.992

2,511.864
2,356.132
1,845.947

1,217.803
16,066.001

57

628.144
25,125.761

225.238

41,191.762

81.
SI.

TABLE 6.16.2
ESTIMATES

OF GROSS

VALUE

ADDED FROM

TOURISM

1986-87
No.

Segments

Gross Value Added

(As. million)
-

Hotels and restaurants


2

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles

4.5
4.6

2,156. 141982844605887346
2,163.780
308.
1,284.082
648.
2,683.502

services

services

Textile prod. inc. wearing apparel


Wood and wood products
furniture

except

2,128.
226.
137.
438. 435193

161.

Leather and leather products

68.954
34.863

Metal products except


machinery and trans. equip.

4.7
4.8

Trade

Other services

Total

Misc. manufact.

industries

4,319.921
1,593.064
3,332.346
5,317.758
226.887
581.368

3,189.153
0
444.022
659.300
205.175

1,097.735
366.368

162.1 62

231.116

43.970

78.833

391.256
669.672
713.267

975.380
367.904

1,090.401
1,645.052
1,081.171

5,955.840

9,688.422

15,644.262

699.145

TABLE 6.16.3
ESTIMATES

No.

1
2
34.

OF EMPLOYMENT
1986-87

Segments

Hotels and restaurants

Employment

377,205

378,541

17,461

72,566

43,935

181 ,708

Railway transport services


Transport services

339,304

Shopping
Food and beverages
Wood silk syn. fibre textiles
Textile prod. inc. wearing apparel
Wood and wood products except
furniture
Leather and leather products
Metal products except
machinery and trans. equip.
Misc. manufact. industries
Trade
Other services

Total

931,047

4.1

4.2
4.3
4.4
4.5
4.6
4.7
4.8

DUE TO TOURISM

24,960

505,086
0

13,860

44,807

106,182

159,673

74,342

94,626

8,852
2,929
72,351

755, 746
90, 0276433909606668559
225,
844,
24,
58,
265,
168,

20,817

29,669

3,694

6,623

129,286

201,637

35,829

52,1 85

88,014

153,1 41

78,990

232,131

58

1,216,893

2,147,940

TABLE 6.17.1
ESTIMATES

OF GROSS

VALUE

OF RECEIPTS

FROM

TOURISM

1987-88

81.No.

Gross Receipts (Rs. million)

Segments
Foreign
Tourists

Hotels and restaurants

Railway transport

Transport

44.1

4.2
4.3
4.4
4.5
4.6

Domestic
Tourists

8,966.
796.:

services

services

8,528.588
6,795.359
8,363.518

794..

Wood silk syn. fibre textiles

718.:

2,200.926

Textile prod. inc. wearing apparel

965.'

1,375.579

Wood and wood products


furniture

668.'

806.089

246.861
115.078

550.231
137.558

except

Leather and leather products


Metal productG except
machinery and trans. equip.

4.7
4.8

Misc. manufact.

Other services

industries

1,041.272
1,108.092
1,406.924

Trade

17,495.407
3,932.586
8,528.956
14,020.911
794.411

3,136.319

1,733.:
5,657.:

Shopping
Food and beverages

All
Tourists

2,919.237
2,340.751
1,474.285
797.092
252.636

1,763. 492643789

1,529.
687.

2,804.764
2,637.735
2,094.713

TABLE 6.17.2
ESTIMATES

OF GROSS

VALUE

ADDED FROM

TOURISM

1987-88
No.

Segments

Gross value added

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

services

services

(As.million)

2,490.~

2,369.242

4,860.

356.!

1,406.012

1,762.~

2,938.313

3,687.~

3,491.979

5,951.

749.1
2,459. 171122675

262.

Wood silk syn. fibre textiles

158.1

486.1 84

Textile prod. inc. wearing apparel

506.! 522226

721.904

Wood and wood products


furniture

186.:

224.657

410.1

177.560

257.222
88.423

except

262.
644.1
1,228.,

4.5
4.6

Leather and leather products

79.662

Metal products except


machinery and trans. equip.

40.278

48.1 45

4.7
4.8

Misc. manufact.

765.532

Other services

452.016
773.670
824.035

1,067.997
402.838

1,217.548
1,841.667
1,226.873

Total

6,880.763

10,608.384

17,489.147

Trade

81.967607
819267597393411311172196
983
225979920150122859426883

industries

59

TABLE 6.17.3
ESTIMATES

OF EMPLOYMENT

DUE TO TOURISM

1987-88
81.No.

Segments

Employment

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

40!

, : 7,:4,!

services

B,'

services

6,14,1

4'
3621

Textile prod. inc. wearing apparel


Wood and wood products
furniture

except

4.5
4.6

Leather and leather products

4.7
4.8

Misc. manufact.

Other services

Total

73,~
185,(
514,~

232,264

92,666
878,983
0>32

96,~

276,710
176,253

21,200
3,762

77,' 744499556

26,820
60,525

162,{ >13169

9,511
3,147

industries

790,833

45,{

71

Metal products except


machinery and trans. equip.

Tourists

385,E

820893:>97884

, ,,
, -4,1g,l

Wood silk syn. fibre textiles

All

Domestic
Tourists

Foreign
Tourists

30,711

6,909

131,666
53,1 46

209,410

38"

164,!

80,445

245,001

,239,302

2,239,747

Trade

1,000,445

91,645

TABLE 6.18.1
ESTIMATES

51. No.

OF GROSS

VALUE OF RECEIPTS
1988-89

FROM

Gross

Receipts

Segments
Foreign
Tourists

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn fibre textiles

services

1,918.249
6,259.983
879.026
794.821

Textile prod. inc. wearing apparel


Wood and wood products
furniture

4.5
4.6

leather

4.7

Misc. manufact.

4.8

Trade

Other services

Total

, 103
5,:
321
j12
260
522
763210595
)54188
631390

9,921.908
881.080

services

except

and leather products

Metal products except


machinery and trans. equip.
industries

1,067.976
739.368

TOURISM

(Rs. million)

Domestic
Tourists
10,843.:

3,987.!
8,639.1
10,633.:

All
Tourists

20,765.168
4,868.602
10,557.880
16,893.373
0261913863
879.026

2,798.:
1,748.!
1,024.1

273.1 55

699.565

127.336

174.891

3,593.082

2,816.889
1,764.231
972.720
302.227

1,152.182
1,226.119
1,556.780

2,242.107
1,944.792
874.457

3,394.289
3,170.911
2,431.237

20,538.000

34,978.262

55,516.262

60

TABLE 6.18.2
ESTIMATES

OF GROSS

VALUE

ADDED FROM

TOURISM

1988-89
81.No.

Gross Value Added (As. million)

Segments

Domestic
Tourists

Foreign
Tourists
1

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4
4.5
4.6

2,756.306
394.988
829.451

services

services

Wood silk syn. fibre textiles


Textile prod. inc. wearing apparel
Wood and wood products

exceptfurniture

2,721.106
290.041
175.576
560.474
206.062

Other services

Total

manufact.

industries

5,768.

1,787 .606

2,182.

3,735 .776

4,565.

4,439 .709

7,160.

290.

618 .136
917

.830

285 .629

793.
1,478.
491.'

225.750
61.212

313.897

500.162
856.076
911.806

973.298
1,357.853
512.169

1,473.460
2,213.929
1,423.975

7,613.657

13,487.517

21,101.174

Metal products except


machinery and trans. equip.Misc.

Trade

3,012 .258

88.147
44.567

Leather and leather products

4.7
4.8

All
Tourists

105.779

TABLE 6.18.3
ESTIMATES

OF EMPLOYMENT

DUE TO TOURISM

1988-89
No.

Segments

Employment
Foreign
Tourists

Hotels and restaurants

Railway transport

Transport

services

Shopping
Food and beverages

4.2

Wood silk syn. fibre textiles

4.3
4.4

Textile prod. inc. wearing apparel


except

4.5
4.6

Leather and leather Products

4.7
4.8

Misc. manufact.

Other services

Total

27,
15,
118,
83,
9,909
3,278

Metal products except


machinery and trans. equip.
industries

Trade

51. 428
4.1
564594227815041712304691
249546
991107

All
Tourists

422,
19,
182822940515862220
49,379,

services

Wood and wood products


furniture

Domestic
Tourists

25,376

35,285

4,503

7,781

80,!

157,605

238,596

40,

63,615

103,722

96,293

267,721

171"

1,042,227

61

1.483,446

2,525,673

TABLE 6.19.1
ESTIMATES

OF GROSS

VALUE

RECEIPTS

FROM

TOURISM

1989-90
81.No.

Gross

Segments

Receipts

Foreign
Tourists

Hotels and restaurants

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles

services

Textile prod. inc. wearing apparel


except

4.5
4.6

Leather and leather products

4.7
4.8

Misc. manufact.

Other services

Total

All
Tourists

11,864.!
11,1
23,523.930
28'28!
70'90!
43:
1,053.1624904
4,:
5,341.123
2,293.!
9,:
11,583.484
7,485.1B8816847212016011" 30:
18,919.218
0771482962 1,051.168
1,051.
950.,
3,1001Boo
3,959.243
1,277.
1,1B81Jo'10!
3,157.602
884.
1, 10
1,986.122

services

Wood and wood products


furniture

(Rs. million)

Domestic
Tourists

326.648
152.272

Metal products except


machinery and trans. equip.
industries

752.193

1,377.816
1,466.232
1,861.648

Trade

24,560.000

188.048

1,078.841
340.320

2,410.778
2,091.096
940.241

3,788.594
3,557.328
2,801.889

37,609.640

62,169.640

TABLE 6.19.2
ESTIMATES

OF GROSS

VALUE

ADDED FROM

TOURISM

1989-90
No.

Gross

Segments
Foreign
Tourists
Hotels and restaurants

Railway transport

Transport

Shopping
Food and beverages

4.1
4.2
4.3
4.4
4.54.6

services

services

Wood silk syn. fibre textiles


Textile prod. ilIC. wearing apparel
Wood and wood products
furniture

except

Leather and leather products


Metal products except
machinery and trans. equip.

Value Added

3,296.079
472.340
991.884

3,231

3,253.986
346.841
209.959
670.233
246.415

4,77: 3.'

105.409
53.295

1,92:
4,011 B14702
0538B77

66, 4.~5.17.
98j

30. 117

23,606.824

Other services

1,023.723
1,090.367

Total

9,104.655

14,502.169

51.2.1
940
65:
Bo!
990499
~.I
B67
:>85
5.1580330

62

1,657.110
553.532

1,644.629
2,483.726
1,641.066

1,046.519
1,460.003
550.699

598.110

6,534.946
2,394.425
5,008.698
8,027.688
346.841
874.597

348.1 42

Misc. manufact.

industries

All
Tourists

242.733
65.817

4.7
4.8

Trade

(As. million)

Domestic
Tourists

119.112

SI. 770359
407

TABLE 6.19.3
ESTIMATES

No.

OF

EMPLOYMENT
1989-90

DUE TO TOURISM

Segments

Employment

Hotels and restaurants


2

Railway transport

Transport

44.1

Shopping
Food and beverages

4.2
4.3
4.4

Wood silk syn. fibre textiles

471,340

934,499

21,819

88,787

110,606

54,900

222,326

423,980

617,991

services

Wood and wood products


furniture

Tourists

463,1 59

services

31,189

Textile prod. inc. wearing apparel

All

Domestic
Tourists

Foreign
Tourists

277,226
1,041,971
31,1 89

17,318

54,823

72,141

132,681

328,046

92,895

195,365
11 5,779

except

208,674

4.5

Leather and leather products

11,061

25,470

36,531

4.6

Metal products except


machinery and trans. equip.

3,659

4,519

8,178

4.7
4.8

Misc. manufact.

Other services

Total

industries

90"

158,1 85

44,'

63,850

191,:

96,647

Trade

1,488,910

1,163,398

248,592
108,620288,006

2,652,308

TABLE 6.20
ESTIMATES
OF OUTPUT, VALUE ADDED AND EMPLOYMENT
BY CONSIDERING
THE ENTIRE CONTRIBUTION
OF HOTEL
AND RESTAURANT
SECTOR AS TOURISM EARNINGS

1983

-84

67,258

21,625

4,151, 066

1984

-85

75,165

24,174

4,257, 726

1985

-86

85,590

27,551

4,504, 313

1986

-87

95,003

30,594

4,763, 085

1987

-88

106,542

34,289

4,973, 060472

1988

-89

127,509

41,102

5,589,

1989

-90

143,534

46,212

5,884, 516

63

6.9

Indirect

Taxes

The estimates of indirect taxes paid by various sectors of the economy in the form of excise duty,
electricity duty, sales tax, export/import duty, etc., during the year 1983-84 were made available by the
Central Statistical Organization.
According to these estimates, the amount of indirect taxes paid by hotel
and restaurant sector during the year was As. 2,172.5 million. As compared to the total indirect tax revenue
of As. 266,180 milion, it amounted to about 0.82 per cent.
The revenue accruing to the Government on account of tourism was estimated as a proportion of
total receipts by using the expenditure pattern of foreign and domestic tourists and tax/output ratios. These
ratios were calculated by dividing the amount of tax by the value of output of the concerned sectors. On
the basis of these calculations 12.60 per cent of receipts from foreign tourists and 8.07 per cent of the
domestic tourist expenditure are collected as tax revenue. The tax/output ratios and the proportionate tax
component of different sectors due to tourism are given in table 6.21.

TABLE 6.21
ESTIMATES
Sector

No.
(1)
1.
2.
3.
4.
5.
6.
7.
8.
9.

OF

INDIRECT

TAX

PROPORTIONS

TOURISM

Proportionate tax

Tax/output
Ratio

DUE TO

Foreign Tourists

(2)

Domestic Tourists

(3)

(4)

0.00007

0.00000

0.00000

0.01036

0.00000

0.000000.00000

0.00498

0.00000

0.00573

0.00002

0.00000

0.001020.04441

0.00000

0.00000

0.00000

0.00000

0.00003

0.00000

0.00000

0.04459

0.00000

0.00000

0.24308

0.00000

0.00000

10.

0.06150

0.00000

0.00000

11.

0.09785

0.00000

0.00000

12.13.14.15.16.

0.123850.04671

0.00000

0.00000

0.00037

0.00000

2.04639

0.04645

0.00000

0.54525

0.00469

0.00000

0.04732

0.00000

0.00000

17

0.06413

0.00248

0.00513

18.
19.20.

0.14308

0.00000

0.00000

0.03866

0.00201

0.00193

0.02676

0.00096

0.000780.00000

0.04162

0.00000

0.20637

0.00000

0.00000

23.

0.00000

0.00000

0.00000

24.

0.06691

0.00089

0.00134

21.22.

64

Sector

No.
(1)

Tax/output

--Proportionate

Ratio

Foreign Tourists

(2)

(3)

tax
Domestic Tourists
(4)

25.

0.28310

0.00000

0.00000

26.

0.32718

0.00000

0.00000

27.

0.09793

0.00000

0.00000

28.

0.70500

0.00000

0.00000

29.

0.11167

0.00000

0.00000

30.

0.01637

0.00000

0.00000

31.

0.19776

0.00000

0.00000

32.

0.30819

0.00000

0.00000

33.

0.46186

0.00000

0.00000

34.

0.14194

0.00000

0.00000

35.

0.13515

0.00000

0.00000

36.

0.41459

0.00000

0.00000

37.

0.10286

0.00064

0.00051

38.

0.05309

0.00000

0.00000

39.

0.10870

0.00000

0.00000

40.

0.39045

0.00000

0.00000

41.

0.20089

0.00000

0.00000

42.

0.04344

0.00000

0.00000

43.

0.30024

0.00000

0.00000

44.

0.59560

0.03341

0.03818

45.

0.00007

0.00000

0.00000

46.

0.06891

0.00000

0.00000

47.

0.00472

0.00000

0.00000

48.

0.00457

0.00020

0.00052

49.

0.06682

0.00624

0.01650

50.
51.

0.00000

0.00000

0.00000

0.00000

0.00000

0.00000

52.

0.00092

0.00005

0.00005

53.

0.04398

0.02125

0.01363

54.

0.00000

0.00000

0.00000

55.

0.00000

0.00000

0.00000

56.

0.00626

0.00000

0.00000

57.

0.00000

0.00000

0.00000

58.59.60.

0.00000

0.00000

0.00000

0.08372

0.00635

0.00209

0.00000

0.00000

0.00000

9.18665

0.12601

0.08066

Total

65

'.07

In absolute terms, the tax revenue accrued to the Government during 1983-84 amounted to As.
1,544 million due to international tourism and As. 1,348 million due to domestic tourism.
The rates of
indirect tax underwent several upward revisions since 1983-84. In the case of hotels with a room tariff of
As. 400 and above, an expenditure tax of 20 per cent was introduced by the Government since 1987 and
the tax revenue on account of this amounted to nearly As. 750 million during 1990-91. Airconditioned
restaurants also have to pay a similar tax of 15 per cent from 1991-92 onwards. The revenue on account
of it is expected to be about As. 1,500 million. Thus the incidence of tax in the hotel and restaurant sector
has gone up considerably in the recent past. The overall increase in the incidence of taxes a percentage
of GDP was about 16.55 per cent during the period from 1983-84 to 1989.90. The annual changes in the
incidence of indirect taxes and actual amount of tax realised are given in table 6.22.

TABLE 6.22
ESTIMATES

OF TAXES REALISED
AND ANNUAL CHANGES
INCIDENCE
OF INDIREDCT TAXES

IN THE

(As. billion)
Year

Direct

1983-84
1984-85
1985-86
1986-87
1987-88

Source:

Rate of
Indirect

Tax

Tax

Change in
Indirect
Tax Rate

266.18

304.84
370.15
426.50
494.93
571.68

1,867.23
2,085.77
2,334.76
2,590.55
2,842.66
3,517.24

0.026279
0.025549
0.026778
0.026597
0.026324

0.142553

53 ,29

0.027740

0.162536

1.0575
0.9335

656.54

3,951.43

0.028111

0.166152

1.0222

68 .90

741.83
97'.57

1989-90

Rate of
Direct

49
62 .52

1988-89

GDP

Indirect
Tax

Tax

111 .08
(1)

Economic

(2)

National

Survey,
Accounts

0.146152
0.158539
0.164637
0.174108

1.0252
1.0848
1.0385

1990-91
Statistics,

1991

By assuming that the increase in the rate of indirect taxation has been almost uniform in all the
sectors of the economy, particularly those related to tourism, the revenue accrued to the Government by
way of indirect taxes since 1983-84 has been estimated and given in table 6.23. It could be seen from the
table that the tax revenue due to tourism constituted about 1.10 per cent of the total indirect taxes.

TABLE 6.23
ESTIMATES OF INDIRECT TAXES ACCURED
GOVERNMENT
DUE TO TOURISM

TO

(As. million)
Value of Receipts

Year

Foreign
Tourists

Indirect Tax Revenue

Domestic
Tourists

Foreign
Tourists

Domestic
Tourists

All
Tourists

1983-84

12,250

16,715

1,544

1,348

1984-85

13,522

18,886

1,747

1,561

2,982
3,308

1985-86

14,794
16,066

22,244
25,126

2,073

1,995

4,068

2,338

2,341

4,679

27,512
34,978

2,857

2,710

5,567

1988-89

18,561
20,538

2,951

3,216

1989-90

24,560

37,610

3,607

3,536

6,167
7,143

1986-87
1987-88

66

6.10

Tourism

as Compared

to Other Sectors

of the Economy

According to the estimates available for 1983-84, agriculture,


animal husbandry and related
activities taken together accounted for about 66.2 per cent of the total employment in the country. In terms
of output and value added, its contribution was 26.6 per cent and 36.1 per cent respectively.
These
activities enjoy the minimum taxation and maximum subsidy.
The services sector including electricity, gas and water supply, transport, trade, hotels and
restaurants, public services, etc., accounted for 32.4 per cent of total output and 39.8 per cent of value
added during 1983-84. The sector also generated 18.7 of the employment and contributed a tax revenue
of 10.8 per cent.
Construction and mining taken together accounted for 9.1 per cent of output, 7.8 per cent of value
added, 2.1 per cent of employment and 3.5 per cent of tax revenue.
The manufacturing sector contributed about 84 per cent of the tax revenue with an output of about
31.9 per cent. The share of the sector in the total value added and employment were only 16.3 per cent
and 13.0 per cent respectively.
Tourism receipts constituted about 0.8 per cent of the aggregate output and 0.6 per cent of value
added, as well as employment.
The tax revenue accrued to the Government due to tourism amounted to
about 1.1 per cent of the total indirect taxes.
The comparative estimates of output, value added,
employment and tax revenue generated in different sectors of the economy are given in table 6.24. The
employment estimates would be slightly on the higher side as they include marginal workers.

TABLE 6.24

TAX
Sector
No.
1.
2.
3.
4.
5.

6.
7.

8.

9.

ESTIMATES
OF OUTPUT, VALUE ADDED, EMPLOYMENT
AND
REVENUE
FROM DIFFERENT SECTORS
OF THE ECONOMY (1983-84)
Output

(As. million)

248,615.4
74,193.5

107,925.0
29,089.5

18,742.5
176,633.2

2,372.0
66,801.8

199,915.0
44,384.5
15,647.7
25,610.3

98,724.8
39,978.2
14,441.0
17,517.5
26,183.2
1,662.4
7,024.0
6,598.3

4,081.1

14,963.7
2,185.9
8,135.3
34,480.7
13,335.9
2,544.5
21,558.9
5,562.9
1,524.0
4,172.3
6,186.0
4,531.1
7,728.3

5,144.5
81.4
899.2

23.
24.
25.

30,862.7

12.

13.
14.

15.
16.
17.
18.
19.
20.
21.

22.

Employment
('000' persons)

349,258.4
94,137.0
21,795.8
216,178.5

29,613.1
2,004.9
8,688.7
33,506.3
128,263.6
6,895.6
20,885.9
101,065.5
60,352.3
8,821.6
41,072.6
19,958.6
2,936.1
19,196.9
16,489.5
14,040.3

10.
11.

Value Added
(As. million)

67

293.0
1,286.1
929.7
61.2
84.6
886.6
743.7

8,140.1
1,652.0

362.3
6,410.4
3,150.2
686.5
279.9
521.4
714.2
872.4

Tax Revenue

(Rs. million)
23.7
975.0
108.5
1,238.7
203.5
1,971.0
0.5
1,141.9
7,198.4
123.3
850.2
4,149.8
5,990.9
14,111.1
11,388.1
4,782.3
3,870.4
1,262.2
1,587.7
534.0
122.2
3,961.7
0.0
939.5
8,737.2

Sector

Output(Rs.

No.

million)

26.27.28.29.

30.
31.
32.33.34.35.

36.
37.
38.39.
40.
41.
42.43.44.

45.
46.
47.
48.49.50.

79,510.8
6,956.7
9,773.3
10,134.8
29,471.9
10,312.1
82,272.0
15,447.2
31,325.6
88,648.8
14,303.9
37,159.8
8,472.7
8,427.9
42,020.6
51,915.9
18,147.4
45,862.2
35,602.8
256,076.9
79,839.2
8,456.5
50,571.1

60.

144,679.0
2,664.4
15,498.5
303,629.2
49,392.4
55,716.6
16,508.9
103,264.4
63,366.0
43,780.5
119,821.4
92,382.5

Total:

3,542,995.3

51.52.
53.54.
55.
56.57.58.59.

6.11

Value Added
(As. million)

4,273.2
401.9
1,486.2
3,284.6
5,921.2
2,490.2
20,337.3
5,106.0
13,014.9
20,534.3
2,347.8
13,006.6
2,192.5
2,393.2
13,837.8
16,258.2
7,890.0
16,976.0
15,456.8
93,388.3
29,769.5
3,539.2
22,673.4
62,568.9
1,762.0
13,129.4
211,995.5
13,722.2
44,158.8
14,194.3
92,259.3
53,067.3
14,919.2
70,187.9
92,382.5

1.858,149.9

Employment
('000' persons)

Tax Revenue

(Rs. million)

31.4

26,014.4

37.4
46.0
47.7
71.5
50.6

681.3

778.5
93.9
3,489.3
623.8
86.0
1,341 .6
52.5
116.4
586.8
445.7
403.4
323.0
3,509.5
4,795.3
1 ,124.8
216.2
1,573.3
5,201.8
80.7
924.4
13,927.8
2,947.7
1,246.6
160.9
0.8
5,218.3
1,824.2
18,502.8

6,890.2
1,131 .8
482.6
2,039.3
25,355.6

7134.5
4,446.2
11,980.5
5,930.2
3,822.4
449.8
916.1
16,406.8

10,492.5
788.3
13,769.7
21,205.0
19.0

5,501.5
39.9
231.2
9,667.5
0.0
0.0
279.1
2,172.5

0.0
0.0
646.7

0.0
0.0
10,031.7

6,882.8

0.0

320,232.2

263,735.2

Main Findings

As per the study, tourism was worth Rs. 28,965 million during 1983-84, with foreign tourists
contributing Rs. 12,250 million and domestic tourists Rs. 16,715 million. By 1989-90, the estimated value
of receipts from tourism went up to Rs. 62,170 million including Rs. 24,560 million as foreign exchange and
it registered an average annual rate of growth of 13.6 per cent since 1983-84. During the same period,
the value added from tourism increased from Rs. 10,986 million to Rs. 23,607 million and employment in
the sector went up from 1.866 million to 2.652 million. Despite these impressive growth performances, the
share of tourism in the gross domestic product and total employment still remains to be only 0.6 per cent.
Considering the unlimited tourism potential that exists in the country in the from of rich cultural heritage,
ancient temples, monuments and archaeological remains, meadows and mountains, beautiful landscapes
and gardens, wildlife and forests, beaches and hills and above all a population of about 844 million with
varied cultural and social practices, the achisvement of India in the field of tourism so far is marginal.
68

7.1
1,2,3,.
x..

CHAPTER

VII

MEASUREMENT
OF INDIRECT AND
IMPACTS OF TOURISM
Input-Output

INDUCED

models

The tourists visiting a country or region generates additional demand for goods and services in that
economy or region. Even, in the case of domestic tourists, their expenditure in the places of visit often
creates an additionality ir) their total consumption.
In any case additional demand is created on new items
of consumption in new places. Additional output, value added and employment are thus generated in the
direct recipient sectors of tourist expenditure.
Apart from this direct impact, additional output and
employment are also generated in other sectors of the economy due to inter-industry relationship.
These
are known as indirect impacts. An increase in value added and employment imply additional income to
factors of production.
This induces further demand for various goods and services, which is known as
induced impact.
The direct, indirect and induced impacts can be measured by using input-outputtechniques.
The major advantage of this technique is that it concentrates on the links between various
economic activities operating within the economy. An input-output table (1-0 table), which is a statistical
description of the inputs consumed and the output produced by various branches of the economic system
forms the basis for the input-output analysis. The great virtue of this analysis is that it brings out the indirect
internal transactions of the economic system. The 1-0 table records the flows of transactions of goods and
services between different producing sectors of the economy and to different components of the final
demand during a year. The output produced by a sector may be utilised for intermediate consumption if
used as input for further production of goods and services, or may be used by the final consumers.
For on
1-0 table, the economy is divided into a number of homogeneous sectors each of which is represented in
the table by a row and a column. The row of a particular sector gives the distribution of the total supply of
the sector while the column gives the inputs absorbed by the sector. Algebraically, the distribution of the
output of different sectors can be presented by the following balance equations:

Xi

Xii + Fi

n;

(1)

= 1,2,

,n

where xi is the output of the jth sector.


Xii is the output of the jth sector consumed

by the fh sector.

and Fi is the final demand for the output of the jlh sector which generally consists of privateconsumption,
public consumption, gross fixed capital formation, change in stocks and exports
(assuming zero import).

One of the basic assumptions, under which the 1-0 system works is that the inputs consumed by
a sector vary in direct proportion to sectoral output (proportionality assumption).
On the basis of thisassumption

= a.. X.
IJ

IJ

i = 1,2,
where

(2)

,n;

= 1,2,.

aij is the requirement

,n
of the output of jlh sector for a unit level production

69

of j'h sector.

X.

By using the above, the balance equation (1) can be written as


= a.. * X
I

I.+

IJ

= 1,2.

F.I

(3)

= 1,2,.

n;

The 1-0 model described above provides a link between the final demands and output levels of
different sectors. The system can be used to decide the levels of production of different sectors, given the
final demand of any particular sector. In this case, the system can be considered as a set of simultaneous
linear equations.
By using the matrix notation, the mode! may be written as

7.2

AX + F

(4)

or

(I-A) X

(5)

or

(I-A)-1 F

(6)

RF

(7)

Output-Multipliers

The matrix R is known as Leontief inverse or multiplier matrix. It gives direct as well as indirect
demand for the output of each sector by all the other sectors of the economy. Each coefficient rij represents
the output of the jlh sector required directly or indirectly for one unit of final demand of j'h sector. The total
of each column of the inverse matrix gives the direct and indirect effect of a unit increase in the final demand
of the sector to which the column relates and is called the 'simple output multiplier' of the sector. The
multipliers of this sort, worked out by using the A matrix, may have the effect of overestimating the impact,
if there is a large amount of import. This is because the imported inputs do not have any direct linkages
with other sectors of the economy. In such a situation, the alternative is to use a modified A matrix AD =
A -M where M is the matrix of import coefficients.

7.3

Open and Closed

Models

In the model described above, it has been assumed that the household consumption is independent of the inter-industry transactions.
This kind of models are called open models. In fact, the amount of
purchase of the households is related to their income, which depends on the output of each of the sectors.
An increase in the amount of labour input due to increased output will lead to a change in the household
expenditure which will again induce an increase in output. This additional impact on the economy is known
as 'induced impact'. To estimate the induced impact, the household sector can be mcved from the final
demand and treated as separate sector in the 1-0 model like any other producing sector. The column vector
will be the proportionate expenditure by the households on different sectors and the row will be the income
received by the households from different producing sectors in the form of wages and salaries, profits,
interest, etc. This matrix is known as extended A matrix (A+) and the model is known as closed model. The
extended A matrix and the corresponding Leontief inverse (R+) are of the size (n+ 1, n+ 1). The column sum
of the extended inverse matrix gives the direct, indirect and induced effect of a unit increase in the final
demand of the sector to which the column relates and is called the total output multiplier.

70

II

7.4

Income

Multipliers

Income multipliers attempt to translate the impacts of final demand into changes in income or value
added. They can be derived by using either the open model or closed model which are called simple and
total income multipliers respectively.
The direct and indirect income effect (simple multipliers, 11p can be
obtained by multiplying the inverse matrix R by the value added coefficients.
The total income multiplier 12j' can be obtained by using the R+ matrix. The relative multipliers as
compared to the direct income are then obtained by dividing the simple or total income effect by the initial
income effect or the value added coefficient which are called Type-I and Type-II multipliers respectively.

7.5

Employment

multiplier

(11j/an + 1,j)

(8)

multiplier

(12j/an + 1,j)

(9)

Multipliers

Just like income effects, employment effects can also be measured by using the employment
coefficients instead of income coefficients.
If Wn+1, i are the labour-output ratios of various sectors, the
direct and indirect employment multiplier is given by
E1j

Wn+1,i

rij

(10)Similarly,

the total employment

effect E2j can be obtained

by using the extended

inverse matrix

(R+).
The relative multipliers
the respective sectors.

7.6

Multiplier

Effect

are derived by dividing

E1j and E2j by the initial employment

coefficients

of

of Tourism

As there are several sectors which provide goods and services to the tourists, the additional
demand created by them in an economy gets distributed to all the recipient sectors. The multiplier effect
of tourism can be, therefore, assessed only by aggregating the impact in all the relevant sectors. The basic
data required for the analysis are the A matrices and the expenditure pattern of the tourists on different
sectors.

7.7

Input-Output

Transactions

Table of Indian Economy

The latest input-output table available for the Indian economy is for the year 1983-84. It contains
115 sectors and hotels and restaurants is one among them. However, the table published by the Central
Statistical Organization (CSO) contains only 60 sectors. An examination of the expanded version of the
input-output table revealed that it does not contain any additional sector relevant to the tourism activity.Therefore,
the 60 sector model has been used for this study.
The following

set of relations describe the input-output

model of the Indian economy:

Input relations
qj

f.

9j

(11)

C. + G. + L- + S. + E. +
J

Output
qj

X.k + f.

(12)

relations

m..

(13)

m..IJ

(14)

IJ

71

where
qj
9jf.

total output of the jth commodity.

total output (of aU products and by products) of the ith industry group.

final demand of the jth commodity.

Private consumption

Government

Gross fixed capital formation

Change in stock of jlh commodity.

Export of jlh commodity.

Import

Output of rh commodity

used as input in the kth sector.

Output of jth commodity

produced

C.JG.
J

L.Js.
J

E.J
'j

Xjk

m..IJ

of the jlh commodity.

consumption

of the .jth commodity.


of jth commodity.

of jth commodity.

by the ith industry group.

Because of non-availability of import coefficient matrix, the model gives only A matrix and not the
domestic product transactions matrix AD. The application of A matrix instead at AD matrix in this study
must have resulted in the over estimation of the multiplier effect to some extent.
In most of the applications, commodity x commodity matrices are required as demand is for a
particular commodity can not for a mixed range of output of an industry. However, data in that form are
seldom available. CSO has, therefore, computed two initial matrices called Absorption matrix (X) and Make
matrix (M). The absorption matrix is a commodity x industry table recording the inputs of commodities intoindustries.
Most of these inputs are required to produce the characteristic products of the industry but sume
are required to produce its subsidiary products. The make matrix is an industry x commodity matrix which
records the values of commodities produced by industries. The construction of commodity x commodity
pure table involves the transfer Cf inputs and outputs between sectors by suitably combining the make
matrix and the absorption matrix under appropriate assumptions.
CSO has used the industry technology
assumption under which the input structure of a secondary product is considered to be similar to that of the
industry where it has been produced. The flow matrix thus obtained has been converted into A matrix by
dividing the cell values with the commodity output of the sector.
The construction of extended A matrix to obtain the induced effect, involves the use of sectorwise
household consumption expenditure (HCE) as an additional column and the sectorwise household income
as an additional row in the input-output table. However, these vectors are generally not available. Private
consumption expenditure (PC E) vector which includes expenditure of non-profit institutions is, therefore,
taken as an approximation to household consumption expenditure. Similarly, the row of value added has
been taken as an approximation to household income.

1983-84.

The 1-0 tables published by the CSO contains commodity x commodity flow matrix for the year
The coefficient matrices A and A + were derived from these matrices by dividing the elements of

each column by the total output of the respective sectors. In the case of private consumption expenditure
vector, the elements were divided by the total value added figure. The matrix A+ is given at Annexure I.
Matrix A can be obtained by deleting the last column and row of the A+ matrix.
Though CSO has already published the inverse matrix R, it has been recomputed to ens,ure the
correctness of both A and R matrices. Similarly R+ was computed by using A+ matrix. The matrices Rand
R+ are given at Annexures II and III.

72

7.9

7.8

Estimation

of Simple

Multipliers

of Output for Tourism

The direct and indirect impact of foreign tourist expenditure in various sectors of the economy, in
terms of additional value of output was obtained by multiplying the R matrix with the corresponqing
expenditure vector (F1) given in table 6.10. The sum total of the resultant column (C1) gave the output
multiplier as 2.069. The multiplier effect due to domestic tourist expenditure was similarly obtained as
2.050 by multiplying the R matrix by the consumption vector of the domestic tourists (F2) and taking the sum
of the resultant column (C2). The weighted average of the multipliers is 2.058. It implies that the direct and
indirect impacts taken together is 2.058 times the actual spending of the tourists. Thus, the multiplier effect
of tourism is fairly high due to its strong backward linkages with other sectors of the economy.
Estimation

of Simple

Multipliers

of Income

and Employment

for Tourism

The impact in terms of value added in different sectors, due to foreign and domestic tourist
expenditure was obtained separately by multiplying each element of C1 and C2 by the corresponding value
added/output ratio (V). The additional employment and tax effects were similarly calculated by multiplying
C1 and C2 by the corresponding labour coefficients (L) and tax rates (T). The income, employment and tax
multipliers were then derived by adding the respective columns. The relative multipliers (Type I multipliers)
were computed by dividing the simple multipliers with the initial value added and labour coefficients.
The
impact coefficients in each of the sector of the 1-0 table due to a unit expenditure by the foreign tourists are
given in table 7.1. Similar results for domestic tourists are given in table 7.2. A summary of simplemultipliers,
taking all the sector together is given in table 7.3.
TABLE

7.1

SIMPLE MULTIPLIERS OF OUTPUT, INCOME AND EMPLOYMENT


FOR EACH OF THE SECTORS OF THE ECONOMY DUE TO
A UNIT EXPENDITURE BY THE FOREIGN TOURISTS

(1)
1.
2.

3.
4.
5.

6.
7.

8.

9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.20.
21.22.
23.
24.

(2)
0.107243
0.029935
0.005131
0.092989
0.080848
0.024682
0.011696
0.023889
0.029311
0.000204
0.002803
0.011675
0.062623
0.024461
0.010245
0.018791
0.053379
0.003394
0.060678
0.042427
0.001353
0.007966
0.002430
0.016850

(4)
0.000000
0.000000
0.000000
0,002451
0.000000
0.000000
0.000000
0,000000
0.000000
0.000000
0.000000
0,000000
0.000933
0.007195
0.003544
0.000000
0.008551
0.000000
0.027294
0.010033
0.000000
0.000000
0.000000
0.004292

(5)

0.076336
0.023592
0.004412
0.075981
0.039922
0.022231
0.010863
0.016340
0.025914
0.000169
0.002266
0.002298
0.007301
0.007751
0.003990
0.006409
0.011791
0.000979
0.031844
0.011824
0.000702
0.001731
0.000911
0.005437

73

0.00000
0.00000
0.00000
0.92704
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.32087
0.26804
0.39180
0.0000012.05934
0.00000
8.11585

5.68130
0.00000
0.00000
0.00000
0.67656

(6)

(7)

33.13937
9.25027
0.558411
28.73472
1.650431
0.162951
0.961364
0.867248
0.060616
0.008610
0.286048
0.259170
2.511747
0.288839
0.441113
1.513494
1.461161
0.139433
9.470391
6.696747
0.316453
0.116151
0.076851
0.857190

0.000007
0.000310
0.000025
0.000532

0.000082
0.001096
0

0.001065
0.007125
0.000012
0.000274

0.001446
0.002925
0.050057
0.005586

0.000889
0.003423

0.000485
0.002345

0.001135
0.000056
0.001644
0

0.001127

SectorNo.

Simple
Output
Multipliers
(C1)

Direct

Simple

Income

Income

(VFI)

(VC,)

Direct
Employment

Multipliers

(LF,>

Simple
Employment
Multipliers
(LCI>

Simple
Tax
Multipliers
(TC,)

(1)

(2)

(3)

(4)

(5)

25.
26.
27.
28.

0.009237

0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.002170
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.024355
0.000000
0.000000
0.000000
0.019234
0.040392
0.000000
0.000000
0.041682
0.134214
0.000000
0.000000
0.000000
0.000000
0.000000
0.044401
0.000000

0.002313
0.002387
0.000080
0.000895
0.001456
0.002630
0.000565
0.003998
0.000484
0.003881
0.006143
0.001488
0.006190
0.000310
0.000396
0.001967
0.002036
0.006063
0.003727
0.030202
0.005986
0.017422
0.001203
0.027878
0.061168
0.000935
0.003536
0.112558
0.134987
0.018902
0.007906

0.261124

0.002615

0.017560
0.007493

0.01 ~545
0.000136
0.004155

0
0.00011
0.000209
0.069048
0

0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.22384
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
5.53000
0.00000
0.00000
0.00000
1.33462
3.35810
0.00000
0.00000
2.73850
28.83092
0.00000
0.00000
0.00000
0.00000
0.00000
11.70504
0.00000

18.20477
0

0.009869

0.370748

0.930081

71.16182

173.30562

0.213726

29.
30.
31.
32.
33.
34.
35.
36.
37.

38.
39.
40.
41.
42.
43.
44.
45.
46.

47.
48.
49.

SO.
51.
52.

53.
54.
55.
56.
57.
58.
59.

60.
Total

0.044457

0.001392
0.005894
0.004496

0.013092
0.002341
0.016183

0.001465
0.009344
0.026528
0.009072

0.017687
0.001199
0.001396
0.005974
0.006504
0.013948

0.010067
0.069575
0.016419
0.046734
0.002874
0.062186
0.141462
0.001414

0.004175
0.161212
0.485914
0.023851
0.009195
0

0.000131
0.000615
0.117891
0

2.068956

74

(6)

(7)

0.027737
0.031776

0.000502
0.000214

0.011498
0.153144
0.008907

0.000463
0.004987
0.000676

1.040881
0.054541

0.001326
0.003585
0.003761

0.638585

0.001819

0.007431

0.000063
0.000151

0.021160

0.186678

0.019291
0.083426
0.055843
0.310032
0.070906

0.073479

0.002332
0.001306
0.000605
0.003022
0.041439
0.000001
0.003220
0.000013

1.934638

0.000284

5.086125
0.042828
0.249025
7.394972
8.998900

0.009452

6.858383
0.307474

0.658395

0.533681
0.089609
0

0.010869
0.025652

0.000148
0.021370
0
0
0
0
0
0

TABLE

7.2

SIMPLE MULTIPLIERS OF OUTPUT, INCOME AND EMPLOYMENT


FOR EACH OF THE SECTORS OF THE ECONOMY DUE TO
A UNIT EXPENDITURE BY THE DOMESTIC TOURISTS

Sector

No.

(1)
1.
2.
3.
4.
5.
6.

7.
8.
9.

Simple
Output
Multipliers

Direct
Income

Simple
Income

(C,>

(VF1)

(VC,)

(2)
0.069285
0.019715

0.003715
0.058470
0.055494
0.020837

0.007513
0.021783
0.049241
0.000238

10.
11.
12.
13.
14.
15.
16.
17.
18.
19.

0.000865

20.
21.
22.
23.24.25.

0.000961
0.008717

0.002901
0.006825
0,035307
0.000150
0.019939
0.104642
0.003367
0.058103
0.035490

0.003661

0.025155
26.
27.
28.
29.
30.
31.
32.
33.
34.

0.015259
0.076016
0.001653
0.005756

0.005496
0.008442
0.003215
0,019602
0,001675

0.006706
35.36.37.38.39.40.
0.031895
0.010166

0.017936
0,000822

0.001162
0.007128

41.42.43.

0.008752
0.028621
0.018961
44.45.46.47.48.49.50.
0.076648
0.021294
0.050282
0.002205
0.133427
0.304652

51.52.

0.001312
0.005139
0.149535

Direct
Employment

Multipliers

(3)

(LF1)

(4)

(5)

0.000000

0.049317

0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.107677
0.000000
0.026244
0.008166
0.000000
0.000000
0.000000
0.006454
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.001750
0.000000
0.000000
0.000000
0.000000
0.000000
0.000000
0.027828
0.000000
0.000000
0.000000
0.051111
0.106819
0.000000
0.000000
0.038820

0.015537
0.003195
0.047776
0.027402
0,018768
0.006978
0.014899
0.043534
0.000197
0.002345
0,001343
0,004116
0.000274
0.000058
0.006801
0.023115
0,000971
0.030492
0.009891
0.000498
0,001894
0,001373
0,008117
0,003820
0.004082
0.000095
0.000874
0.001781
0.001696
0.000776
0,004843
0.000553
0.002785
0.007387
0,001668
0,006277
0.000212
0.000330
0.002347
0.002740
0.012441
0.007019
0,033272
0.007763
0.018745
0.000923
0,059815
0,131731
0.000867
0.004353
0.104405

0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
2.18984
0.00000
7.80370
4.62395
0.00000
0.00000
0.00000
1.01738
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.18052
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
6.31859
0.00000
0.00000
0.00000
3.54654
8.88064
0.00000
0.00000
2.55043

75

Simple
Employment
Multipliers
(LCI)

Simple
Tax
Multipliers
(TC,>

(6)

(7)

21.409900
6.092170
0.404392
18.067930
1.132855
0.137569
0.617570
0.790805
0.101830
0.010046
0.296022
0.151495
1.416156
0.010217
0.006493
1.605961
2.864367
0.138314
9.068468
5.601769
0.224721
0.127107
0.115792
1.279616
0.431341
0.030026
0.008895
0.027089
0.025868
0.020490
0.015788
0.185501
0.010183
0.746997
0.224448
0.61121
0.647572
0.005095
0.016059
0.099550
0.075144
0.636170
0.133545
7.555519
0.398756
0.708385
0.056376
4.150943
10.953480
0.039721
0.306532
6.859320

0.000004
0.000204
0.000018

0.000335
0.000056
0.000925
0

0.000971
0.011969
0.000014

0.000283
0.000845
0.001649
0.001770
0.000082
0.000943
0.006710
0.000481

0.002246
0.000949
0.000039

0.001799
0

0.001683
0.004319

0.024871
0.000161
0.004058
0.000613
0.000138
0.000635
0.006041

0.000773
0.000951
0.004310

0.004241
0.00184

0.00')043
0.000126
0.002783
0.001758
0.001243
0.005692
0.045651

0.000001
0.003464
0.000010
0.000609

0.020356
0
0
0.000137

53.
2.050183
Sl.No.
2.
3.
4.
Tax

Simple
Output
Multipliers

Direct
Income

Simple
Income
Multipliers

Direct

Simple

Employment

Employment

(C,>

(VF,)

(VC1)

(LF,)

(2)

(3)

(4)

(5)

0.313688
0.026092

0.086124

0.087142
0.020678

18.50049
0.00000
0.00000
0.00000
0.00000
0.00000
3.86050
0.00000

18.720590
0.583829

59.47258

Sector

No.

(1)

54.
55.56.

0.014126
0

57.58.59.60.

0.000281
0.000128
0.068558
0

Total

0.000000
0.000000

Multipliers

0.012145

0.000000

Simple
Tax
Multipliers
(TC1>

0.000000
0.000000
0.014644
0.000000

0.000235

0.385641

0.903312

0.000436
0.040154
0

(LC,)
(6)

(7)
0.013796
0
0
0
0
0

0.137662
0
0.023203

0.053368
10.586730

0.005739

136.206870

0.188339

TABLE 7.3
SIMPLE MULTIPLIERS OF OUTPUT, INCOME
AND EMPLOYMENT FOR TOURISM

Multiplier

Category

Multiplier

Foreign

Domestic

All

Tourists

Tourists

Tourists

Output

2.069

2.050

2.058

Income
(a) Simple
(b) Relative

0.930
2.509

0.903
2.342

0.914

Employment
(a) Simple
(b) Relative

173.306
2.435

136.207
2.290

151.897
2.358

0.214
1.698

0.188
2.331

2.412

Indirect

(a) Simple
(b) Relative

The physical significance of these


the sectors of the economy taken together
domestic tourist expenditure.
The gross
foreign and domestic tourists respectively.
1983-84 and 1989-90 by using the above

0.199
1.990

multipliers is that th~ additional output (direct and indirect) in all


would be 2.069 times foreign tourist expenditure and 2.05 times
value added would be 0.930 and .903 times the expenditure of
The output, income and employment estimates for the years
multipliers are given in table 7.4.

76

1.
2.

TABLE

7.4

ESTIMATES OF DIRECT AND


INCOME AND EMPLOYMENT
81.No.

Item

Category

(a)

Output

INDIRECT OUTPUT,
DUE TO TOURISM

of Tourists

1983-84

Foreign

25,345

1989-00

50,815

(As. million)

Income
(As. million)

3.

Employment

4.

Indirect tax

7.10

Estimation

of Total Multipliers

of Output,

Income

and Employment

The total impact multipliers including the induced effect in various sectors of the economy due to
unit expenditure of foreign and domestic tourists were calculated by using the extended inverse matrix R+.
These multipliers are given in tables 7.5 to 7.7. The total multipliers, thus derived for the tourism sector are
very high as compared to most of the other sectors of the economy. This implies that tourism earnings
induce a good deal of purchases in the household sector due to additional income.

TABLE

7.5

TOTAL MULTIPLIERS OF OUTPUT, INCOME AND EMPLOYMENT


FOR EACH OF THE SECTORS OF THE ECONOMY DUE TO
A UNIT EXPENDITURE BY THE FOREIGN TOURISTS
SectorNo.

(1)
1.
2.
3.4.
5.6.

Total

Total

Output
Multiplier

Income

Multiplier

Total
Employment
Multiplier

(2)

(3)

(4)

(5)

0.550549

239.008730
61.710930
4.950871
155.551080
9.727442
0.564933
3.059702
2.000232
0.255046
0.026130
1.047056
1.592443
12.341950

0.000054
0.002068
0.000226
0.002884
0.000486
0.003800
0.000001
0.002456
0.029979
0.000038
0.001004
0.008885
0.014373

0.773461
0.199704
0.045493
0.503382
0.476508
0.0855700.037226

7.8.

9.
10.
11.

12.
13.

0.157387

0.039119
0.411313

0.235299
0.077072
0.034575

0.055098
0.123329
0.000619
0.010261
0.071741
0.307710

0.037687
0.109035

0.000513
0,008295
0.014125

0.035879

77

Total
Tax
Multiplier

Sector

No.
(1)

Total
Output

Total

Multiplier

(2)

14.
15.
16.
17.
18.
19.
20.

Multiplier

Total
Employment
Multiplier

Total
Tax
Multiplier

(3)

(4)

(5)

Income

0.037462
0.050999
0.196087
0.154174
0.013496
0.116993
0.054048
21.22.23.
0.004624
0.038473
0.023694
24.25.
0.168424
0.043566
26.
0.186621
27.
0.005167
28.29.
0.027501
0.024243
30.
0.085214
31.32.
0.011138
0.132709
33.34.35.36.37.38.39.
0.006356
0.034646
0.080120
0.023870
0.058453
0.00724~
0.005804
40.
0.019718
41.
0.030673
42.
0.027973
43.44.45.46.
0.042938
0.097393
0.078067
0.155010
47.
0.011443
48.
0.127792
49.
0.375991
SO.
0.005331
51.
0.025437
52.53.
0.607617
0.573387
54.55.
0.107963
0.031257
56.
0.204974
57.
0.059375
58.
0.056639
59.
0.292072

0.011871
0.019864
0.066885
0.034057
0.003892
0.061398
0.015063
0.002400
0.008360
0.008887
0.054350
0.010909
0.010021
0.000298
0.004180
0.007854
0.017119
0.002688
0.032792
0.002100
0.014392
0.018555
0.003917
0.020458
0.001873
0.001647
0.006493
0.009603
0.012159
0.015895
0.042278
0.028463
0.057787
0.004788
0.057289
0.162578
0.003525
0.021548
0.421238
0.159286
0.085560
0.026875
0.183124
0.049720
0.019297
0.171067

0.442351
2.195795
15.793510
4.220225
0.554302
18.259600
8.531012
1.081369
0.560946
0.749229
8.567582
1.231500
0.073715
0.027807
0.129421
0.114090
0.206815
0.054700
1.255827
0.038637
3.859192
0.563804
0.143508
2.110358
0.044889
0.080178
0.275367
0.263330
0.621757
0.302414
9.600491
1.461883
2.183784
0.292499
3.975611
13.518390
0.161404
1.517188
27.872020
34.219170
2.415681
0.304602
0.001639
4.889598
2.360000
45.101870

0.076661
0.027807
0.009278
0.009887
0.001931

Total

3.688283

714.065670

0.567230

7.212295

78

0.004522
0.001446
0.000192
0.007939
0

0.011269
0.012333
0.061058
0.000506
0.019388
0.002707
0.001394

0.002202
0.040899
0.002936
0.004917
0.0108280.009896
0.006012
0.000384
0.000630
0.007699
0.006161
0.001215

0.012891
0.058007
0.000005

0.010681
0.000054

0.000584
0.025123
0
0
0.000559

0.025217
0
0
0.001283
0
0
0.024452

TABLE 7.6
TOTAL MULTIPLIERS OF OUTPUT, INCOME AND EMPLOYMENT
FOR EACH OF THE SECTORS OF THE ECONOMY DUE TO
A UNIT EXPENDITURE BY THE DOMESTIC TOURISTS

Sector

No.
(1)
1.2.3.4.5.6.7.8.

9.
10.
11.
12.
13.
14.
15.
16.

17.
18.
19.
20.
21.22.23.24.25.

Total
Output

income

Multiplier

Multiplier

(2)

(3)

0.716324

0.509879

0.184597
0.042915

0.145481

0.457050
0.439764
0.079972
0.032308
0.052094

0.373455
0.217155

0.140552
0.000641
0.010144

0.065161
0.273339
0.013491
0.039732

0.192132
0.202535
0.013178
0.112796

0.04677E;
0.004138
0.038346
0.024313
0.172365
0.048600

26.27.28.29.

Total

0.214088
0.005319
0.026741
0.024675
0.078488

30.
31.
0.011758
32.33.34.35.36.37.38.39.40.
0.132774
0.006426
0.031279
0.083944
0.024538
0.057529

0.035632
0.124262

0.000531
0.008200
0.012830
0.031871
0.004275
0.015475
0.065536
0.044740
0.003800
0.059195
0.013036
0.002147
0.008332
0.009119
0.055622
0.012169
0.011496
0.000306
0.004064
0.007994
0.015768

0.002838
0.032808
0.002123

0.012993

0.032225
0.042242
0.050885

44.
45.46.47.48.

0.103665

0.045001

0.081167

0.029593
0.057948
0.004405

0.010527
0.532430

0.088380
0.230223

0.005116
0.025789

0.003383
0.021846

0.583089
0.398642

0.407113

0.197144

49.
SO.51.52.53.

221.352710
57.042690
4.670410
141.233930
8.977361
0.527979
2.655505
1.891175
0.290663
0.027062
1.035124
1.446388
10.963390
0.159311
1.710664
15.474910
5.544009
0.541240
17.604670
7.383232
0.967618
0.559092
0.768815
8.768055
1.373784
0.084564
0.028623
0.125845
0.116123
0.190491
0.057748
1.256442
0.039057
3.484180
0.590719
0.147527
2.076978
0.041475
0.075193
0.285966
0.276657
0.938921
0.358389
10.218690
1.519934
2.189864
0.269092
6.133174
19.143010
0.154883
1.53819
26.74691
23.79059

0.072031
0.030008

41.42.43.

0.155441

(4)

0.036903

0.019441
0.004026
0.020135
0.001731
0.001545
0.006743
0.010089
0.018362
0.018837

0.006692
0.005443
0.020477

Total
Employment
Multiplier

0.110742

79

Total
Tax
Multiplier
(5)
0.00005
0.001912
0,000213
0,002618
0,000448
0,003551
0
0,002322
0,034165
0,000039
0,000992
0,008070
0.012767
0.027609
0.021663
0.009091
0.012988
0.001885
0.004360
0.001251
0.000172
0.007913
0
0.011532
0.013758
0.070045
0,000520
0,018852
0,002755
O,0012e4
0,002325
0,040919
0,002967
0,004439
0.011345
0,010173
0,005917
0,000355
0,000591
0.007995
0.006473
0.001835
0.015277
0.061742
0.000005
0.010711
0.000049
0.000900
0.035577
0
0
0.000536
0,017532

3.
7.11

Total
income

Total
Output
Multiplier

Sector

No.
(1)
54.55.
56.

57.58.59.

Total

Multiplier

Total
Employment
Multiplier

Total
Tax
Multiplier

(4)

(5)

(2)

(3)

0.107783
0.035553
0.199074
0.057819
0.055430
0.237725

0.085418
0.030568
0.177853
0.048418
0.007854
0.139235

2.411653
0.346467
0.001592
4.761493
0.114090
36.709570

7.045468

3.582115

661.31158

0
0

0.001246
0
0.002707
0.019900

0.531667

TABLE 7.7
TOTAL

Sl.
No.

Multiplier Category

Multiplier
Foreign
Tourists

Domestic
Tourists

7.212

7.045

7.116

Total
Relative

3.688
9.947

3.582
9.288

3.627
9.570

Employment
(a) Total
(b) Relative

714.066
10.034

661.321
11.120

683.623
10.613

Indirect Tax
(a) Tolal
(b) Relative

0.567
4.500

0.532
6.596

0.547
5.710

1.

Output

2.

Income

(a)
(b)

4.

MULTIPLIERS OF TOURISM FOR OUTPUT,


INCOME AND EMPLOYMENT

All

Tourists

Linkages
The relationships
of any sector with other sectors of the economy are measured in terms of
backward and forward linkages. The backward linkages are the same as the output multipliers which are
given by the column totals of the inverse matrix. The row totals, on the other hand, provide the forward
linkages. These linkages are generally ranked for assigning priorities in the formulation of development
strategies.
Sectors having maximum linkages are given high priority while those with minimum linkages
are assigned Jow priority in the development planning. If arranged according to the magnitude of backward
linkages in the open model, tourism is almost in the middle with rank thirty. In the case of closed model,
tourism receives a higher rank with a larger linkage. The relative ranks of all the sectors on the basis of
backward linkages derived from open and close models are given in table 7.8.

80

2.3.

TABLE 7.8
RANKING

Ranks

Sector

No.
60
7
6

4.
5.

56

6.

55

7.

8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.

51

19.

59

20.

21

10
57

54
11
4

2
52
8

1
50

21.
22.
23.
24.
25.

20

26.

34

27.
28.

44

29.

5
19
15
49

47
48

30.
31.
32.
33.

Tourism

34.

45

35.

29

36.

25

37.

18

42
26
16

38.

41

39.
40.
41.
42.
43.
44.
45.
46.
47.

14
46
33
43
23
24
12
53
58

OF BACKWARD
LINKAGES BASED
OPEN AND CLOSED MODELS
linkages
(Open Model)
1.000000
1.137866
1.172181
1.195817
1.227531
1.258223
1.267084
1.296953
1.305486
1.306990
1.339383
1.349016
1.362787
1.431307
1.518559
1.575527
1.576119
1.606336
1.688951
1.738244
1.763771
1.854191
1.924240
1.930351
1.950810
1.981169
1.985820
2.029315
2.046444
2.058123
2.081782
2.131572
2.132867
2.135175
2.138586
2.140783
2.141143
2.146032
2.153617
2.156994
2.163263
2.190517
2.197347
2.198769
2.201924
2.237750
2.243122

81

ON

Sector

No.

Linkages
(Closed

25
41
31

17
60
29

Model)

6.317074
6.401179
6.421987
6.479171
6.529912
6.574208

6.586553
6.587276
6.622335
6.628559
6.646149
6.652548
6.661551
6.672028
6.684954
6.686501
6.701606
6.708372
6.714898
6.7414P8
6.774142
6.779676
6.810716
6.819769
6.861066
6.869898
6.874574
6.875560
6.876528
6.882045
6.890711
6.932519
6.938851
6.942272
6.943750
6.952117
6.956344
6.977656
6.996489
6.999795
7.029191
7.063409
7.076570
7.082737
7.085194
7.101121

24

7.115004

6
9

7
10
11
55
51
49
44
56
57
8
32
3
59
54
26
52
43
34
58
23

4
15
50

2
14
36
40
37
19
21
42
45

22
30
48
28
47

Ranks

Sector

No.
48.
49.
50.

2.251181

20

7.138530

2.277232
2.279181
2.286722
2.288980

39

7.140908

40
22

28

2.423221
2.424116
2.447358
2.465608
2.468638
2.537681
2.537690
2.587027

27

2.628982

39
36

56.57.58.59.60.

13
30
35
38

61.

7.12

Linkages
(Closed Model)

31

17

53.
54.55.

Sector

No.

37
32

51.
52.

Linkages
(Open Model)

38

7.177217

16

7.191991

46

7.196843

33

7.205582

Touri sm

7.212295

35

7.238069

7.2636E;7

18

7.276199

27

7.552021

12

7.559548

53

7.617148

13

7.758800

Main Findings

Every rupee spent by the tourists entails a demand on all sectors of the economy either directly or
indirectly. These linkages are fairly high in respect of several sectors. The direct and indirect outputs of
all the sectors taken together is 2.058 times the initial expenditure of the tourists. This multiplier effect is
larger in the case of foreign tourists than in the case of domestic tourists.
As a result of the output
multipliers, the factor incomes and employment also get multiplied. The relative income and employment
multipliers are 2.412 and 2.358 respectively.
Thetax revenue accruing to the Government also gets almostdoubled.
The increased income and employment induce further demand on various sectors of the
economy and the total impact including the induced demand is very high in the case of tourism. The output
multiplier becomes 7.116 and relative income and employment multipliers become 9.570 and 10.613respectively.
Tourism earnings, thus, have a larger impact on the economy both in terms of additional
income and employment.

82

8.1

CHAPTER

POLICY

VIII

RECOMMENDATIONS

The growth and magnitude of tourism in the country and its impact on various sectors of the
economy have been analyzed in the earlier chapters.
They also highlight some of the issues having a
bearing on the development strategy of the sector.
A summary and review of these findings alongwith
certain policy recommendations
are given in the following paragraphs.
International

Tourism

International tourist arrivals in India during 1990 were 1.71 million constituting about 0.40 per cent
of the world arrivals. The contribution of the tourists to the foreign exchange earning of the country in the
year 1990-91 was provisionally estimated to be As. 24.44 billion ($US 1.36 billion) and it formed 0.55 per
cent of world tourism receipts. In comparison, it was equivalent to about 7.5 per cent of the merchandise
exports. Tourism has, thus, emerged as one of the top foreign exchange earners of the country, though
it is still negligible as compared to word tourism receipts.
The receipts from foreign tourists constituted about 0.34 per cent of the total value of output in the
economy and its share in the gross value added and employment were 0.25 per cent and 0.28 per cent
respectively during 1983-84. In absolute terms, the estimated gross value added was As. 4,541 million and
employment was 871 ,744 persons during the same year. These figures increased to As. 9,105 million and
1,163,398 persons by 1989-90. The contribution of foreign tourists to the tax revenue of the Government
also increased from As. 1,544 million to As. 3,607 million during the same period. These estimates clearly
demonstrate the fact that economic development of the country can be accelerated by exploiting the vast
tourism potential that exists.
The indirect impacts of foreign tourist expenditure introduced a multiplier effect of 2.069 in output,
2.509 in income and 2.435 in employment. These multipliers became 7.212,9.947 and 10.034 respectively
by including the induced impacts also in the analysis. International tourism is, thus, having high linkageswith
other sectors of the economy and as such it is one of the best development options for increasing the
income and employment opportunities of the people.
One of the major findings in the case of foreign exchange earning from tourism is that in dollar
terms, it remained almost stagnant during the last decade.
Though. there could be several factors
contributing to such a phenomenon, one of the reasons identified was a gradual shift in the composition of
tourists towards low spending categories.
The trend is not inconsistent with the existing infrastructural
constraints and other problems associated with the economic structure of a developing nation.
The
investment required to achieve any appreciable change in the trend would be too heavy to be generated
during a short span of time. It would also mean the risk of non-admissibility of demand substitution during
periods of depression. The strategy recommended, therefore, is to increase the volume of tourist traffic to
India in general with an element of insistence on quality through appropriate pricing mechanisms in
selected centres and facilities which are ser,sitive to mass tourism.
The main strength of tourism in India is its cultural attrac1ions, particularly the large number of
monuments, and archaeological remains scattered throughout the country. These assets are generally in
a state of dereliction and continued degradation.
Even, in the case of those monuments which are
preserved and protected, there are no facilities created for the tourists to see and enjoy them without any
adverse impact on their existence.
It is, therefore, recommended that the development of cultural tourism
must be given the highest priority as it would serve the twin objectives of preservation and economic
exploitation
of inestimable resources.
Clusters of such monuments having excellent tourist appeal,
accessibility and development prospects must be identified and developed as tourist ZOl1es with the active
participation of local bodies and private sector.

83

The efforts initiated recently to diversify the tourism products of India to take advantage of the fast
growing segments of holiday and adventure tourism must become supplementary to the mainstream of
cultural tourism.
In other words, these efforts should not lead to the development of a large number of
competitive destinations away from the cultural tourism destinations.
The objective must be to achieve
integrated development of selected centres with varied attractions so as to establish brand names in the
international market.
International tourism in India is characterised by moderate growth rates and high seasonality. One
of the basic reasons for the same is the poor perception of tourists about the transport facilities in India. The
absence of comfortable airconditioned
transport facilities makes tourism a difficult proposition during
summer months. The capacity constraints restrict further growth during peak periods. The induction of a
large number of airconditioned coaches and cars in the main tourist destinations is, therefore, an absolute
necessity to reduce seasonality and to achieve a higher growth in tourist traffic.
Tourism promotion and marketing efforts of India in the overseas markets suffer from several
disabilities due to organizational deficiencies built into the system over the years. The 'Tourism Branch'
and its field offices were initially setup with the explicit function of providing facilitation services and
information to prospective and real tourists. With the passage of time, it was assigned new roles and its
environment became increasingly complex. It soon became the premier organization for tourism promotion
and marketing in a fierce competitive
environment and to coordinate the infrastructural
development
activities in the country.
The necessary organizational changes including re-orientation and training of
personnel have, however not been brought about to meet the new requirements. This has resulted in a sort
of incompatibility between the organizational structure and the performance expected from it. Specifically,
there is no marketing division with qualified marketing experts at the headquarters of Tourism Department
to lay down marketing objectives and formulate strategies based on market analysis and research and to
guide and monitor the field officers in relation to set targets. In the absence of such a mechanism, the field
offices which are generally not manned by officers with adequate professional skills and training prepare
and execute expenditure plans instead of marketing plans. This needs to be reversed.
A major handicap in the formulation
of effective marketing strategies is the absence of a
comprehensive database covering all aspects of tourism. Even though the offices of the Director General
(Tourism) and Director General (Civil Aviation), International Airport Authority of India and AirJndia have
independent statistical/market
research units, the data available with these units are never integrated andanalyzed.
This is mainly due to the fact that the Ministry of Civil Aviation and Tourism does not have an
independent statistics and research unit, despite the fact that it is an important economic Ministry with the
requirement of extensive statistical information.
This gap requires to be removed as expeditiously aspossible.

The objectives and functions of a national tourism development organization are varied and
interdependent
and the accomplishment
of each of them requires special skills and expertise.
The
recruitment, training and placement policies of the Department of Tourism have to be, therefore, revised
to induct qualified experts in various disciplines after exposing them to a well structured comprehensive
training programme on all aspects of tourism management and marketing. The Department has to be reorganized on functional basis and the marketing division must consist of a core group of experts in
marketing and market research with proven track record. There must also be vertical and horizontal
movement of officers between various divisions at fixed intervals of time on a planned sequence.
The
posting of officers in the field offices abroad should form part of a regular exchange programme between
the core group in the marketing division at the headquarters and the field offices.
The tourism industry in India is composed of a few large enterprises in each sector who virtually
control the entire market. These enterprises generally do not have a common goal and take least interest
in research and development activities, estab!ishing industry standards and ethics and development of new
markets and destinations.
The policy, therefore, has to be to encourage the establishment of a large
number of new enterprises to ensure wider spread and constructive competition.
The fiscal and financial
incentive schemes of Government should be oriented towards this objective.

84

8.2

Domestic

Tourism

Domestic tourism is one of the most vibrant expressions of Indian heritage. The dimensions of
domestic tourism in India are astronomical and as per the figures compiled by the Department of Tourism,
there has been a phenomenal growth in domestic tourist arrivals in recent years and during 1990, it
exceeded 62 million.
The economic and social conditions prevailing in India today are precipitous for a
revolutionary growth in domestic tourism in the near future.
The economic significance of domestic tourism is reflected in the estimated turn-over of As. 16,715
million, contribution of As. 6,445 million to gross value added and As. 1,348 million to tax revenue and direct
employment of 994,083 persons during 1983-84.
By 1989-90, the value of output and gross value added due to domestic tourists went up to As.
37,610 million and As. 14,502 million respectively.
The tax revenue increased to As. 3,536 million and
direct employment in the sector reached 1,488,910 persons.
The indirect impact of domestic tourist expenditure produced a multiplier
2.342 in income and 2.290 in employment. These multiplier became 7.045,9.288
by taking into account the indirect and induced impacts together.

effect of 2.050 in output,


and 11.120 respectively

A desirable feature of domestic tourism is its ability to sustain the industry during lean periods of
international tourism by providing an alternative for demand substitution.
It is also less sensitive to various
international developments and internal problems which generally affect foreign tourist traffic.
While domestic tourism is bound to grow rapidly in size and spread, it is necessary to take adequate
measures to protect the ecology and environment of all the tourist centres. It is, therefore, recommended
that the carrying capacity of ecologically and socially fragile areas must be assessed and tourist flow
regulated.
A noticeable feature of the present trend in domestic tourism is that a large percentage of them are
holiday and business tourists. The infrastructural development plans of the country must, therefore, have
a strong bias towards these tourists.

8.3

Overall

Impact

The turn over due to tourism during 1983-84 was Rs. 28,965 million. It constituted 0.8 per cent of
the aggregate output in the economy and was larger than the contribution of 26 other sectors of production
individually.
In comparison, the tourism turn over was 14.4 times the value of output of iron ore and almost
double the production of leather and leather products.
It was also nearly equal to the production of
fertilizers as well as petroleum and natural gas.
The value added from tourism during 1983-84 was As. 10,986 million and in percentage terms, it
was about 0.6 per cent of gross domestic product. The sector also provided direct employment to 1.87
million persons which constituted 0.6 per cent of total employment.
These were again larger than the
contribution of several other sectors of the economy.
The contribution of tourism to the tax revenue of the Government was As. 2,892 million during
1983-84 and it formed about 1.1 per cent of the total indirect taxes collected. Unlike several other sectors
like agriculture and fertilizers, tourism industry does not receive any large subsidies.
Thus the net
contribution of tourism to tax revenue is very large.
By 1980-90, tourism output became Rs. 62,170 million and its contribution to gross domestic
product was Rs. 23,607 million. The tax revenue from tourism went up to Rs. 7,143 million and direct
employment provided by the sector reached 2.65 million.

85

The multiplier effect of tourist expenditure is fairly high as compared to several other sectors. The
simple multiplier (indirect impact) of output, income and employment were 2.058, 2.412 and 2.358
respectively and the corresponding total multipliers (indirect and induced impacts) were 7.116, 9.570 and10.613.

The above figures indicate that the contribution of tourism to the Indian economy is significant even
at this stage. However, by considering the unlimited potential that exists in the country, the achievement
so far is marginal. The sector, therefore, deserves to be given high priority in the development plans of the
country .

8.4

Tourism Planing

The recognition of tourism as an instrument of economic growth came late in India. As a result, the
sector was not accorded the required priority in the development plans of the country till Sixth Plan.
Tourism sector is, therefore, still in a stage of infancy and it is required to be nurtured for a few more years.
The sector has to be, thus, given adequate priority in the allocation of funds during the next few planperiods.

The tourism policy envisaged a selective approach based on travel circuit concept in the provision
of tourism infrastructure to achieve intensive development of selected centres. A list of 61 travel circuits
consisting of 441 centres was, thus, drawn up by the Central Government in consultation with State/Union
Territory Governments.
At the first instance, the number of circuits and centres selected were too large to
achieve any significant results with the resources available.
The selection of the centres was also not
based on any objective criteria to meet the requirements of the policy. Further the State/U. T. Governments
were generally not having any firm commitment and adherence to the selected centres in their development
plans. In general, the tendency has been to take up a large number of small projects of peripheral nature
in as many centres as possible even 0utside the travel circuits. The Central Government also followed a
scheme approach instead of an area approach in providing financial assistance to State/U. T. Governments. As a result, there was very little impact on the development of tourism infrastructure in any specific
destination as resources were spread very thinly over a large area. As a corrective measure, scheme for
identification and development of "Special Tourism Areas" is proposed to be taken up during Eighth Plan
period (1992-97).
The plan envisages the establishment of all inclusive tourism zones with identifiable
boundaries in a few selected centres. The development would take place according to specific master
plans and would be coordinated by "Special Tourism Area Development Authorities" set up for the purpose.
The strategy is to provide the required basic infrastructure and support services like airports, railwaylines,
roads, water supply, electricity, sewerage, communication facilities, etc., by the Government and encourage the private sector including foreign investors to invest heavily on tourism infrastructure like hotels,
restaurants, entertainment facilities, transport services, etc., in these areas. The success of the scheme
would greatly depend upon the choice of the centres, conceptual soundness and practical utility of the
master plans and effectiveness of its implementation.
In view of these reasons and to avoid the mistakes
of the past, it is recommended that a set of objective criteria may be evolved for the selection of "Special
Tourism Areas". The master plans for the selected areas must also be prepared with great care giving all
the relevant details taking into account the existing topography and ecological factors.
The policy also envisaged a division of responsibility between the Central and State Governments
in the development of tourist centres based on their popularity with foreign and domestic tourists. In the
existing scheme of things. it was, however, not possible to implement this direction as most of the
development schemes were formulated by the State Governments.
The Central Government did not have
either the necessary manpower resources or direct access to the required delivery systems for making its
own choices.
It is, therefore, recommended that the Central Department of Tourism must set-up a
monitoring and evaluation unit to evaluate the merits of each of the proposals objectively and to monitor
the implementation
of the projects accepted for financial assistance.

86

8.5

Tourism

Coordination

Tourism consists of several goods and services consumed by the tourists at their places of visit.
There are provided by a multitude of establishments
and agencies functioning
at various levels.
International tourists also have to come in contact with various Government agencies like embassies!
missions, immigration authorities, etc., to obtain visa and to complete entry and exit formalities.
The
development of tourism, therefore, implies the coordinated efforts of a number of agencies and institutions
whose organizational objectives are generally not the same. In realisation of this fact, the tourism policy
stipulated that the development
of tourism must be a common endeavor of all the agencies vitally
concerned with its development at Central and State levels, public sector undertakings and the privatesector.
No institutional mechanism was, however, provided for ensuring effective coordination between
various agencies at different levels.

At the Central Government level, the Department of Tourism along with its undertakings and
autonomous institutions of the India Tourism Development Corporation (ITDC), Indian Irlstitute of Tourism
and Travel Management (IITTM) and National Council for Hotel Management and Catering Technology
(NCHMCT) is responsible for the coordination of tourism development activities.
The visas for the entry
of foreign nationals in the country are issued by the Indian embassies and missions as per the regulations
including rates of visa fee fixed by the Ministry of External Affairs. The immigration checks are exercised
by the Ministry of Home Affairs and customs clearance is by the Finance Ministry. The regulation of airline
services to India and the provision of passenger facilities at the airports are coordinated by the Department
of Civil Aviation along with the International Airport Authority of India (IAAI) and Air India. Internal transport
facilities are provided by the Indian Airlines, Railways and Transport operators.
The Ministries of
Commerce and Finance decide the rates of import duty and fiscal and financial incentive schemes
applicable to tourism related activities. The Ministry of Environment provide guidelines and regulate the
construction of hotels, restaurants, etc., in certain areas. In fact, most of the Ministries and Departments
of the Government of India are connected with the business of tourism in one way or other. An entry
restriction by the Home Ministry, a visa fee increase by the Ministry of External Affairs or a restrictive policy
of Department of Civil Aviation in allowing the operation of international flights of India can have serious
adverse impact on tourist traffic. Since the organizational objectives of most of these agencies do not
include tourism development, there is every possibility of anyone of them taking precipitative decisions
without consulting the Department of Tourism. Since, there have been several such instances in the past,
putting the tourism industry in disarray, it is recommended that the concurrence of Tourism Department
must be made compulsory before taking any decision affecting tourists or tourist facilities by any of thedepartment
It would be advantageous to set up a Cabinet Sub-committee to deal with such issuesexclusively.

The Department of Tourism itself has not received the importance it deserves due to it's frequent
shifts from one Ministry to another. Since the Departments of Civil Aviation and Tourism have common
objectives and their activities are interdependent,
it is appropriate to place them together in the same
Ministry with equal importance so that the coordination between them is effectively built into the system.

There is a fair degree of coordination between the Central Department of Tourism and the StateGovernmen
This is achieved through a series of meetings at different levels, personal interactions and
a set of centrally assisted schemes underwhich financial assistance is provided by the Central Government
to specific project proposals received from the States. The suitability of such projects for central funding
is assessed on the basis of certain fixed patterns and administrative requirements.
The economic and
social cost-benefit analysis of these projects are, however, not being carried out at any stage due to lack
of details and man-power resources.
As a result, there has been a proliferation of centrally assisted
projects with all the associated problems of management, execution and coordination.
It also led to nonassessment of ecological and environmental
effects of such projects in detail. Tourism is a delicate
business and investment decisions not based on objective evaluation can lead to disastrous results. It is,therefore,
recommended
that economic and social cost-benefit
analysis of each project must be
undertaken by the proposed monitoring and evaluation unit before they are implemented.

87

As the State Government level also various aspect of tourism are being looked after by different
departments and agencies.
It is, therefore, necessary to set up inter-departmental
coordination committees in each State to deal with the developmental aspects of tourism. Such Committees at district and local
levels would also be helpful in the identification and execution of useful projects.
The coordination with private sector in the field of tourism is essentially in the form of consultation
and a set of regulations and incentives. The consultations are generally informal and individualistic in the
absence of a formal consultative mechanism.
The collective wisdom of the private sector is also limited
though they excel individually.
This is basically because of the fact that the private sector in the tourism
industry has not been assigned any collective responsibilities so far. They have all along been looking upon
the Government in such matters including database and research, laying down industry standards and
ethics, preservation
and protection of sources of tourist attractions, industry training and manpower
development,
preparation of investment guidelines, etc. The associations of these industries lack the
necessary infrastructure and manpower to undertake these activities.
It is, therefore, recommended that
the private sector must be encouraged to take up these responsibilities collectively in a phased manner.
As a first step, the recognized associations of the industry must be provided the necessary assistance to
set up regular offices with essential equipments for documentation and research.
If required, an officer
from the Government could be provided on loan basis to each of the associations to function as secretary
and the link between the industry and the Government.
Once such instjtutions get established, more and
more collective responsibilities could be passed on to them.
All establishments
including tourism industries are regulated by various Acts and Rules.
In
addition, there are regulations laid down by the Department of Tourism for recognition and grant of various
incentives and facilities. These include approval and classification of hotels and restaurants, approval of
travel agents and tour operators, approval of guides, etc. They are mainly intended to ensure standards
in quality and service and to protect the interests of the consumers.
These responsibilities could also be
taken over by the industry associations after the establishment of the regular offices and infrastructure.
The tourist industries must also collectively
monuments and areas either by paying a development

own responsibility for maintaining the protected


cess or by undertaking the activity for themselves.

A wide spectrum of incentives and facilities is being made available to tourism industries since the
last few years both by the Central and the State Governments to attract private investment in the sector.
The available indications suggest that the incentive scheme has been effective and there is a larger flow
of capital to the sector. Considering the present stage of development of the industry, these incentives
have to be continued for a few more years. There is also a need to provide area-specific special incentives
to direct the investment to selected locations.

88

ANNEXU RE I
INPUT-OUTPUT

COEFFIOENTS

INDIAN

MATRIX

(61x61) OF

ECONOMY

(1983-84)

0.~4025

0.024857

0.040054

0.(XX)39(}

0.052602

0.001835

0.0027~

O.~

0 .(XXXX) 1

0.003395

0 .cxm68

O.~

0.001632

o. (XXx:M)3

O.022075

0.348789

0.00)210

0.069542

0 .045629

0.~1149

0.047059

O.~

o. (XXXX)6

o. (XXXX)6

0.001892

O.(XXXX)1

O.(XXXX)7

O.(XXX)34

0.(XX)462

O.(XX)338

10
11
12
13
14

0 .(XXXJ35

0 .(XXXK) 1

0.(xx)154

O. (XXXX)5

O.<XXJ134

o. {XXXX)2

O.(XX)445

0 .036284

15
16

o. OCKX)54

0.<XKX>74

0.007166

0.00))27

17

18
19

O. (XX)43O

0.(xx)145

o. (XXX)27

O.<XXXJ24

0 .(XXXK) 1

c).(XXX)26

O.OOllm

20

O.<XXXJ15

0.<XKX>19

0.00)169

21

0.(XX)259

22

O. (XXK)48

o. oo:XX)8

o. (XXX)38

O.(XXXX)2

0.001733

23

0.000016

o. oo:XX)8

0 .(XXXX9

0.00)739

24

25

o. (XXX)49

o. (XXXX)6

0: 00X)33

0.002185

26

O.CX1J721

0.~7

0.001818

0.~54

0.(xxx)13

0.007471

27

28

o. oo:XX>5

O.(XXM)22

O.~

00.012704

0.(XXX)21

29

0 .(XXXX)7

30

0.056971

0.057304

31

32

0.003543

33

34

o. (XXXX)2

35

36

O.039463

O.oo:XJ32

0.014551

0.010493

0.003749

0.002730

O.~

O.oo:xXJ2

0.OCXXXJ7

O. (XXXX)4

0.00)182

37

0.CXXJ193

0.(xx)108

O.(XX)892

o. (XX)861

38

0.004351

0.002397

0.004239

O.002838

89

1
10
)200

2
39

0.(xx)706

0.(XX)247

40

O. (XXX)48

o. (XXX)26

0.(XXX)29

0.(xxxx)2

o. (XX)383

41

0.(xxx}11

o. (XXXX)6

0 .(XXXX)7

o. (XX)426

42

43

0.(xx)783

0 .(XX)528

0.(XX)707

0.~1

0.003517

44

O. (XXX)3O

0.(XXXK)3

0.00X>13

O.(XXXX)2

0.002010

45

0.016570

0.~125

0.013994

0.010745

O.~

o. 004022

46

0.~281

0.004141

0.004359

0.~8

o. (XX)5OO

47

0.<XX>OO7

0 .(XXXK)1

O.00XX)3

o. (XXX)65

o. (XXX)47

48

O.004589

O.003345

0.001211

0 .002802

0.001415

0.004776

49

0.006235

0.005525

0.004134

0.004375

0.004717

0.032854

50

51
52

0.(xx)176

0.(xxx)52

O.(XXM)86

O. (XXXX)3

0.001546

0.018221

0.Cl5641

0.010195

0.OU707

O.059626

0.003035

53

O. (XXX)5 7

0 .(XXX)32

O.(KXX)34

0.003199

54
55

0.005742

0.006957

0.00785

0.005601

0.002443

o. (XXX)43

0.(xx)107

O. (XXX)44

0.(XX)201

56

57

58

O. <XX>OO
7

O. (XXXX)4

0 .(XXXX)4

O.OCXJ223

59

0.001459

O. (XXX}3O

0 .(XX)835

O.(XXXX)5

0.015384

00.817070

0.788144

0.859913

0.493830

0.900724

6061 0
0.711838

11

O.fXXXJ13

o. XKm

0.545993

0 .(XXXX)1

0.(xx)158

0 .(xxxx)2

o. (XX)544

O.(XXXX)2

0 .(XX)227

O.(xx)l02

0.003413

0 .(XXX}2O

0.005970

0.00

O.(XX)737

0.001784

O.~

0.00Xl27

1011 0

0.001725

O.(XX)393

0.002759

O.0CMXX)4

0.007419

13
0.002057
14
0
1516 0

O.00)446

O.(xxx)lS

O.fXXXJ15

0.(xx)282

17

90

11

10

12

18

o. (XXKX)3

0.00)212

0.013864

19

0.028553

0o.

o. (XXX)25

o.~

2021

0.CXXJ210

(XX)9990.00X>11 0

0.003967

0.<XX>137

o.~

o. (XXm2

0
0 -00)464

22
23

0.003904

o. (XX)299

0.1XX)564

0.(00491

0 .(XXX)3 5

24

25
26

O.~

o. (XXX)5O

0.00)249

0
0.00:1326

0.015682

0.016778

0.012619

0.041598

0.031142

0.(X1)O70

27

0.(XX)898

0.001136

0.00)878

28

0.(XXKX)3

o. (KX)42S

0.000124

0.001297

29

0.000100

0.002532

30

31

0.(xx)134

0.(xxx)16

0- (XXX)55

32

O. (XX)4O9

0.024927

0.017308

0.018070

0.~99

33
34

0 .004366 0

o. (XX)638

0.~50

0.~14

0.002359

35

o. (XX)428

0.000281

36

0 .00X)83

o. (XXXJ7
4

37

0.<XXX>19

0.001655

0.(xx)798

0.013856

O.~

38

39

0.003098

40

0.069581

0.015402

O.~

0.018038

41

0.(xxx)16

42

43
44
4S
46

0.012359

0.004240

0.(XX)100

0.000161

0.000144

0.(XX)926

0.<XXm2

0.010058

0.003295

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31

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0.(xx)199

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0 .(XXX)5 5

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44

50

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0.(XX)416

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102

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36
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0.(xx)199

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0.035850

0.024212

60

61

0.859797

0.893428

0.837473

0.340773

0.585771

104

1
1.1~708

ANNEXUREll

LEONTIEF INVERSE MATRIX FOR 60 SECTOR OPEN MODEL


(1983-84)
2

..

0.003437

0.003935

0.031300

0.057593

0.cxxm2

0.003037

1.057576

0.001525

0.003841

0.015060

O. <XXI862

o. (XX)5O5

0.(XX)398

1.003738

0.(XX)598

o. 002905

0 .<XXJ3 72

0.031464

0.019258

0.023743

1.042104

0.373217

0.001180

0.079350

0.0499360.001316 0.00291

0.051870

1. 026833

0.CXX>785

0.001788

o. <XXXJ61

O.(XXX)45

0.001176

0.001165

0.001168

1.002815

O. (XXX)38

0.(XXX)74

o. (XX)368

O. (XXX)88

0.002937

0.001385

0.006906

0.004857

0.001823

0.004239

0.019374

0.015840

0.010852

0.OU766

0.008079

0.010541

o. <XXX>36

0.(xxx)35

10
11

0.<XXXJ65

o. oo:X)41

0 .(KXX)4O

0 .(XXX)41

0.002482

0.002150

0.(XX)953

0.001637

0 .(XX)912

O. (XX)4O4

12

0.000203
0.0002460.004001

0.000173

0.000317

0.001652

O. CXX>100

13
14
15
16
17
18
19
20

0.003017

0.003149

0.003078

0.04.2199

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0.000016

0.000024

0.000015

O. (XXX) 12

0.<XXX>23

0.(xxx)19

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0.017538

0.016246

0.012769

0.051566

46

o. 095048

0.070267

0.070715

0.~134

0.~37

0.074984

47

0.001350

0.001080

0.001278

0.001370

0.001218

0.001188

48

0.042763

0.036627

0.034437

0.032115

0.022322

O.026805

49

0.041885

0.049705

0.044996

0.040049

O.038833

0.031475

50

0.001027

0.001223

0.001070

O. (KX)96()

O.cxm30

O. (XX)684

51

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0.005897

0.008441

0.007759

0.006743

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52

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56

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47

48

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2.277232

43

45

46

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0.001786

0.001576

0.001032

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0.CXX>497

0.(xx)351

0.(XX)355

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0.002578

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0.007851

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0.000148

0.000075

0.000078

0.000070

0.<XX>168

0.022480

0.019988

0.029190

0.177919

0.032069

0.038922

0.026250

0.021370

0.020922

0.031815

0.159123

0.055094

10
11

0.001899

O.(XX)854

0.001225

0.(xx)293

O.00)222

0.(XX)518

0.009180

0.012604

0.027241

0.002879

0.004168

0.004993

12
13

0.000198

O.000304

0.(XX)181

0.(xx)141

0.00)144

O. (XX)22O

0.001439

0.002675

0.001165

0.~94

0.001430

0.001332

14

O.00X)40

O.(Xm53

O. (XXX)38

0.000024

0.000021

0.(MXX)35

15
16
17
1819

0.000131

0.000150

O. oo:x)82

O. (XXX)48

O.(XXX)42

O. (XXX)45

0.004763

0 .006508

2021
2223

0.002681

0.001725

0.001688

0.003079

O.0023690.001639
0.001746

0.(xx)799

0.<XX>479

0 .(XX)45 7

0.(XX)493

O.005800

0.007865

0 .<Xmo2

0.001473

0.001335

0.002735

0.002989

0.001313

O. (KX)996

0.001271

0.~60

0.005119

0.010954

0.054521

0.~94

0.007280

0.007271

0 .000364

0.001528

O.(XX)4OO

O. 00J363

0.00)278

0.(XX)591

0.005876

0.005811

O.004633

0.~18

0.002579

0.001790

0.001847

0.002475

0.0104140.001413
0.0166030.002491

115

48
46
1.98582
116

45

44

43

47

24

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0.001562

0.00)131

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2S

0.052669

0.013822

0 .004205

0.002810

0.002716

0.003597

26
27

0.040160

0.031529
0.0325570.003912

o. 044884

0.055355

O.~

0.007096

0.019536

0.001583

0.~1

0.003784

28

0.007165

0.016372

0 .005086

0.002677

0.018333

0.005677

29

0.012546

0.007905

0.005893

0.002320

O.003303

0.004172

30

0.(XX)598

0.001150

0.002076

0.003328

0.fXXJ707

0.{XX)526

31

0.009915

0.003076

0.020355

0.001229

O.002W3

0.003189

32

0.018136

0.034793

0.~303

0.~77

0.~9

0.r1:m73

33

0.001217

0.001899

0.056485

0.001701

0.~16

O.005434

34

O.~0.277379

0.026138

0.074373

0.~2S3

0.010166

O.OU1l9

0.120647

0.1&YJ46

O.038084

0.031169

0.071895

0.040522

0.073255

0.013068

0.0C1)384

0.004753

0.012623

37

0.046780

0.025354

0.020796

0.01~97

0.CX1J3()8

0.035180

38

0.(XX)594

0.000314

0.00)197

0.(xx)187

0.00)123

0.(XX)411

39

0.(XX)365

0 .(XX)6OO

O. (XX)22O

0.(xx)165

0.00)111

0.(xx)133

40

0.026054

0.007766

0.~108

0.039363

0.013057

0.011841

41

0.013273

0.025419

0.030115

0.040417

0.010254

0.025761

4243

0.005673

0.022007

O.008334

0.016710

O.004696

0.210445

35
36

1.1269700.013924
0.013643

0.004733

0.003766

0.002971

0.003144

1. 088694

0.006288

0.017337

0.007349

0.004171

0.010223

1.010103

0.021885

0.lfYJ190

O.088042

0.055914

0.057104

1.372257

0.219886

0.078236

0.001464

1.101380

0.001013

o. 080066

O.022238

1.027925

44
45
46

0.014389
0.058984

47

0.001657

0.001008

0 .003664

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0.026085

0.019486

0.039936

O.036886

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0.052415

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0.027617

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50

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0.011778

0.004354

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0.005704

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52

0.085280

0.154295

0 .096808

0.057400

0.~78

0.001571

0.001293

0.002497

0.002722

0.002319

0.006624

54

0.036538

0.024193

0.020581

0.015189

0.012779

0.030447

55

0.009852

0.006196

0.012926

0.~24

0.004878

0.026641

56

57

0 .(xxx)54

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O.(xx)161

0 .00X)45

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58

0.00)277

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0.000416

O.(XX)853

0 .(XX)628

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59
60

0.072579

0.078026

0.043160

o. 02S088

0.022480

0.023685

2.135175

2.156994

2.029315

2.046444

53

2.190517

51
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53

49

52

54

0.004926

0.001008

0.00:1725

0.001961

0.215383

0.003871

0.003121

0.002123

0 .(XX)968

0.004081

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0.001402

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o. (XX)568

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o. (XX)83O

0.~38

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0.003716

0.001427

0.001218

0 .002368

0.172954

0.003371

0.002496

0.(XX)885

O.~

0.001850

0.153358

0.002870

0.002657

0.002879

0.003377

0.005421

0.005178

0.001446

0.<XXJ189

O.~

0 .(XXX)5 7

0.(xx)149

0.023893

0.(00414

0.007840

0.021846

0.005263

0.005763

0.a33753

O. 004260

0.127539

0.016939

0.007549

0.016641

0.016908

0.005135

10
11

0.<XXJ188

0.<XX>111

O.00X)89

0.(xx)113

O. (XXX)8O

O.~

0.001731

0.001289

0.001743

0.001074

0.001734

0.(xx)718

0.00)367

0.<XX>132

O.(XXX)84

O.(XX)264

0.021220

0.(XX)390

O.005042

0.001149

0.00)617

0.001578

0.105142

0 .002048

0.<XXJ248

O. (XXX)28

0.CXXX>19

o. (XXK)5O

0.002511

0.(KXX)52

O. (XXX)82

O. 00X)50

0 .00X)33

0.(xx)167

0.<XX>134

O. (XXX)4O

0.003543

0.001815

0.001207

0.003598

O. 003664

O.OOU49

0.002039

0.00:1612

0.00)349

0.001359

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O.(XX)390

0.~46

0.002750

0.00)618

0.003535

0.001974

0.(XX)359

0.002765

0.001669

0.~32

0.001689

0.002551

0.001014

0.002143

O. 003343

0.002427

0.008024

O. 002689

O. (XX)848

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0.<XX>242

0 .00:1268

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0.001562

0.(XX)189

22

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0.024383

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0.003877

0.011~

23

0.~13

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0.010256

0.005152

0.001132

0.00771

24

O. (XX)464

0.(XXX)89

0.~9

0.(XX)232

O.OCXXJ79

O.~

2S

0.041108

0.005901

0.0016SS

0.007080

0.002677

0.001886

26

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O. 025605

0.011390

0.025569

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0.007782

27

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O. (XX)86 7

0.~22

0.(XX)653

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0.(XX)385

28

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0.001718

0.004611

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29

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0.001425

0.001647

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0.(XK)796

30

0.(KX)82

O. (XX)33 7

0.(XX)232

0.(XKJ708

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0.00)529

31

0.(XX)854

0.001324

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0 .CXXJ699

O.(XX)641

0.010126

0.003789

0.004414

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0.001849

33

0.001892
0.01242
0.0014n

0.001087

0.001973

O.~

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0.00)469

34

0.003219

0.002244

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0.001493

0.007~

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35

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0.015456

0.012666

0.013581

0.010740

0.008452

36

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0.003290

0.004276

0.003254

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0.002192

37

0.00)816

0.003975

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0.007741

O.005468

0.005237

38

0 .<XXJ
174

0.<XX>108

O.(KXX)48

0.(XKJ180

0.001964

0.000079

39

0.<XXJ184

0.<XX>130

0 .(QX)68

o. (XX)284

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0.000076

40

0.001366

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0.001843

41

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0.007084

O.028075

0 .003089

O.003628

O. (X)2rn6

42

O.003846

0.002838

0.003196

0.002552

0.004879

0.0013210.013493

43

0.~2055

0.008293

0.001887

0.007662

0.003565

12
13
14
15
16
17
1819
20

32

117

1.95081
1.296953
55

50

Sl

O.004830

0.002443

0.~5

49

53

52

54
0.008432

44

0.~1

45
46

0.014215

0.016902

0.034114

0.008929

0.027958

0.157235

0.022317

0.027958

0.047615

0.020455

O.(XX)3(X)

o. 005048

0.~16

0.0044570.014821

0.007365

47

0.(XX)907

0.001513

0.001538

48

0.017893

0.013354

0.0153310.0212810.011447

0.005705
0.0233580.038231O.OOl~

49

1. CB9206

O.054690

0.114371

0.018815

50
51

0.(XX)621

1.0237250.0076610.fXX)187

0.00J166

0.<XX>124

0.008155

1. (XX)839

52

0.0707820.006151
0.029039

53
54
55
56

0.002357

0.014393

0.008012

0.002246

0.021348

1.044874

0.121913

0.014223

0.002149

O.OO5UO

1.002138

0.017191

0 .034083

0.0393690.039931 0.004948

0.026596

0.002014

0.0341860.018163 0.013958

1.~7391

O. 004988

0.020776

57

0.(XXX)85

0.(XXX)29

0.00))31

0 .(XXX)28

O. (XXX)48

0 .(XXX)12

58

0.(XX)253

0.(XX)2170.028341 O.002694

0.<XXJ161

0 .(XX)23 7

0.<XX>126

59
60

0.045732

0.018889

0.~2

0.028760

0.022'316

1.518559

2.23775

1.339383

58

59

60

1.606336

56

57

0.002209

0.(XK)167

0.012{XX)

0.019755

0.004412

0.001216

O.(XX)4SO

0.001039

0.012363

0.028976

o. <XXJ2()6

0.(XXX)520.0013180.<XXJ180

0 .003602

0.001824

0.002147

0.023431

0.007647

0.003297

0.001684

0.(XX)274

0.004936

0.01~3

0.007233

0.002730

0.005550

O. 004202

0.008041

0.011177

0.000229

0.(XXXX)7

O. (XXX)5 7

0.<XXJ365

0.000169

0 .003666

0.003110

0.003376

0.011737

0.010781

910

0.0041550.(XXK)49
0.002229

O. 004308

0.024100

0.013840

o. (XXX)4 7

0.(xx)133

o. 000305

11
12
1314

0 .(XX)890.(XX)2'32
0.001371
0.002902

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0.00X>190.(XK)l24 0.(XXX81

0.002197

0.~56

0.(XK)130

0 .(XXX)37O.

1516

O.(XXXX)4

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40.001649
O.(XXXX)8O.

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0.(XX)414

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0.045133

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O. (XXX)2O0.001874O.CMXXJ77

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20
21
22

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0 .(XX)545

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0 .004839

0.(XK)139

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0.018470

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0.001744

0.005614

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0 .(XXX)42o.

0.004687

0.<XXJ912

0.004259

0.035438

0.023565

0.014126

0.035028

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118

55
59
1.
1.227531
1

57

56

58

60

23

0.031704

0.<XX>274

0.068517

0.002488

o. 002688

24

0.00X)59

0.(XKX)14

0.<XXXJ77

0.CXXJ139

0.001560

2S

0.001230

O. (XX)448

0.001275

0.007935

0.<XX>571

26

0.006320

0.003359

0.006574

0.034570

0.018833

27

0.000349

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0.001823

0.001737

28

0.002142

O. (XX)542

0.003113

0.019438

o. (M)45

29

0.001291

O. (XX)628

0 .002050

O.036046

0.005552

30

O.000346

0.XXI221

0.001016

O. 003426

0.003821

31

0.001177

0.002169

0.002114

O.003046

0.003619

32

0.003192

0.XXm1

O. 004294

O.499663

0.017593

33

O.000308

0.006019

O.(XX)812

0.001170

0.001248

34

0.(KX)876

0.007925

0.001582

0.0077&3

0.004473

35

0.006771

0.019282

O. 006366

0.016105

0.036909

36

0.002913

0.001392

0.004027

0.009011

0.013205

37

0.003025

0.002216

0.003027

0.019050

0.012895

38

O. (XXX)6 7

0.(XKX)21

0.<XX>105

O.(XX)347

0.001003

39

O.~

O. (XKX)23

0.<XXXJ72

0.(XX)339

0.002392

40

0.009346

0.CXXJ970

0.002313

0.005613

0.005378

41

0.002092

0.0032(1)

0.001743

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0 .<X1JOO 1

42

0.001404

O. (XX)888

0.001088

0.002630

0 .003386

43

0.001286

O. (XX)5O4

0.001135

O.004388

0.<XX>196

44
45

0.009279

0.(XX)670

0.011042

0.010247

0.049418

0.004612

0.107640

0.013587

0.012864

0.012867

46

0.011858

0.006085

0.00J855

0.042784

0.037403

47

0.000447

0 .(XX!3 90

O.<XX>271

0.001792

0.(XX)857

48

0.006029

0.004255

0.004350

0.011819

0.010158

49

0.013218

0.005585

0.012603

0.055981

0.025277

50

0.000173

0.XXI144

0.<XX>232

0.001361

O. (XX)541

51

0.013115

O. (XX)463

0.013942

0.016392

O.004646

52

0.019800

0.016442

0.026502

0.155146

0.061213

53
54
55
56
57

0.009372

0.<XX>266

0.002051

0.003524

0.003141

0.006737

0.002193

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0.019053

0.058635

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0.OCXXJ12

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1 .1XXXm

0.(xxx)26

0.(XXK)24

58

0.001653

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1.001275

0.000137

59

0.013185

0.004599

0.01~97

0.034702

1.053782

60

1.~99

2.243122

1.688951

258223

119

ANNXURE
LEONTIEF INVERSE MATRIX

III

FOR 61 SECTOR CLOSED MODEL


(1983-84)

1.824365

o. 71~12

0.713038

0.745498

0.77(KX)1

0.702319

0.185405

1.239158

0.182222

0.185837

0.1~

0.179578

O.043862

0.043569

1.046698

o.043866

O.~

0.042861

1. 482053

0.812064

0.433201

0.472313

O.458208

0.4f:iJ554

0.504373

0.473128

0.484421

0.476026

1.449925

0.417297

0.~77

1.~11

0.027668

0.026964

0.067194

0.~1

O. 065983

O.~

0.027485

0.027351

0.027212

0.027442

0.040431

0 .038238

0.035041

0.037696

0.036310

0.034239

0.120369

0.116401

0.11~

0.113555

0.108616

0.1C1J514

10
11
12
13

0.<XXJ511

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0.038455

134

59
58
61
10.570156
10.6012D2

55

56

60

57

45

0.06918

0.173070

0.078246

0.068376

0.073817

0.066281

0.066281

46

0.125418

0.121005

0.12342D

0.140~

0.]44455

0.116414

0.116414

47

0.009434

0.009484

0.0092.58

0.009508

0.009329

0.009212

0.009212

48

0.074836

0.073887

0.073161

0.070895

0.075022

0.070536

0.070536

49

0.259193

0.254508

0.~8591

0.267170

0.257156

0.252157

0.252157

50

0.004281

0.004301

0.004340

0.004888

0.004414

0.004211

0.004211

0.035415

0.023031

0.036243

0.035538

0.025668

0.021860

0.022860

52

0.487991

0.490243

0.494718

0.557125

0.502573

0.479958

0.479958

53

0.101113

0.093106

0.093797

0.082291

0.089625

0.094047

0.094047

54

0.094954

0.091466

0.093312

0.094794

0.141796

0.090433

0.090433

55

1.029167

0.024793

0.024795

0.028009

0.026838

0.0237W

0.02.3720

56

0.214978

1.217554

0.214989

0.184575

0.201658

0.211>381

0.220381

57

0.062147

0.062887

1.062147

0.053373

0.058597

0.063696

0.063696

58

0.060411

0.059506

0.0597820.1935890
1.051723

0.055528

0.060234

0.060234

596061

0.195867

0.189470

0.191549

]225995

0.187273

0.187273

3.868344

3.914701

3.321281

3.646661

3.965576

3.965576

10.195855

104:?l>803

10.520892

3.86855

135

10.4954~

9.495517

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