Sarvajanik College of Engineering & Technology: Graduate Report On

SARVAJANIK EDUCATION SOCIETY
SARVAJANIK COLLEGE OF ENGINEERING & TECHNOLOGY

SURAT affiliated with
Gujarat Technological University

AHMEDABAD
P. G. CENTER IN
FACULTY OF CIVIL ENGINEERING
Graduate Report on
“TOURISM AS A DRIVER OF ECONOMIC GROWTH AND

DEVELOPMENT”
In the partial fulfilment of the requirement for the award of degree of

MASTER OF ENGINEERING (TOWN AND COUNTRY PLANNING) – I
SEMESTER – II
Under the subject of
TOURISM PLANNING AND DEVELOPMENT

SUBJECT CODE: (3724807)
Prepared by:
JARIWALA POOJA BIPINCHANDRA (180420748006)

M. E. (TCP) – I, Semester – I
Under the guidance of
Prof. Zarana H. Gandhi
Ad –Hoc Assistant Professor in FCE
Prof. Palak S. Shah
Ad –Hoc Assistant Professor in FCE
(May-2019)
TOURISM PLANNING AND DEVELOPMENT(3724807) | 2018-19
SARVAJANIK COLLEGE OF ENGINEERING AND TECHNOLOGY, SURAT.
Faculty of Civil Engineering

(2018 - 19)
DECLARATION
I hereby declare that the work being presented in this Graduate Report on “TOURISM AS A
DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT” by JARIWALA
POOJA BIPINCANDRA Semester – II,ME(Town &Country Planning) - I bearing
Enrollment No: 180420748006 submitted to the Faculty of Civil Engineering at Sarvajanik
College of Engineering and Technology, Surat; is an authentic record of my own work carried
out during the period of odd semester 2018-2019 under the supervision of Ad-Hoc Assistant
Prof. Zarna H. Gandhi and Ad-Hoc Assistant Prof. Palak S. Shah
______________________
(JARIWALA POOJA BIPINCHANDRA)
(Enrollment No: 180420748006)
TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 2

SARVAJANIK COLLEGE OF ENGINEERING AND TECHNOLOGY, SURAT

Faculty of Civil Engineering
(2018-19)
CERTIFICATE
This is to certify that Graduate Report entitled “TOURISM AS A DRIVER OF ECONOMIC
GROWTH AND DEVELOPMENT” is presented under the Course work TOURISM
PLANNING AND DEVELOPMENT SUBJECT CODE: (3724807) and report is submitted by
JARIWALA POOJA BIPINCHANDRA (180420748006) of 2nd Semester for partial
fulfilment of requirement for the degree of MASTER OF ENGINEERING IN TOWN &
COUNTRY PLANNING of Sarvajanik College of Engineering and Technology, Surat during
the academic year 2018-2019.
______________________ ____________________ ______________________

Prof. Zarana H. Gandhi Prof. Palak S. Shah Prof. (Dr.) Jigar K. Sevalia
Ad-Hoc Assistant Professor Ad-Hoc Assistant Professor Faculty & Head
(TCP) (TCP) Faculty of Civil Engineering
External Examiner
Date: _____________
Place: _____________

TABLE OF CONTENTS
1 INTRODUCTION .............................................................................................................. 5
2 TOURISM IN INDIA ......................................................................................................... 6
2.1 What is Tourism? ........................................................................................................ 6
2.2 Types of Tourism in India ........................................................................................... 6
2.3 Evolution of the Indian Tourism Sector ...................................................................... 9
2.4 Indian Tourism Industry and Economic Growth....................................................... 10
3 IMPACTS OF TOURISM ON THE ECONOMY ........................................................... 12
3.1 Positive impacts......................................................................................................... 12
3.2 Negative Impact ........................................................................................................ 13
4 ECONOMIC DEVELOPMENT IN TOURISM .............................................................. 15
4.1 Economic Contributions of Travel and Tourism ...................................................... 15
4.2 Foreign Tourist Arrival(FTA) in India ..................................................................... 16
4.3 Domestic Tourist Arrival in India ............................................................................. 19
4.4 Foreign Exchange Earnings from Tourism in India .................................................. 19
4.5 Contribution of Travel and Tourism to GDP in India ............................................... 21
4.6 Contribution of Travel and Tourism to Employment in India ................................. 23
5 GOVERNMENT INTITATIVES..................................................................................... 25
6 CONCLUSION ................................................................................................................ 27
7 REFERENCES ................................................................................................................ 28\
List of Figures
Figure 1 Types of Tourism in India ........................................................................................... 7
Figure 2 Evolution of Tourism Sector in India ........................................................................ 10
Figure 3 Economic Contributions of Travel and Tourism ....................................................... 15
Figure 4 Key Statics about Tourism,2017 ............................................................................... 16
Figure 5 Top 10 International Check Posts for Foreign Tourist Arrivals (FTAs) in India ...... 18
Figure 6 Foreign Tourists Arrival in India ............................................................................... 18
List of Tables
Table 1 Foreign Tourist Arrival in India.................................................................................. 17

Table 2 Domestic Tourist Arrival in India ............................................................................... 19
Table 3 Foreign Exchange Earnings from Tourism in India .............................................. 20
Table 4 Travel and Tourism Contribution to GDP .................................................................. 22
Table 5 Travel and Tourism Contribution to Employment ..................................................... 24

1 INTRODUCTION
Tourism is a significant driver of economic and social development. It stimulates economic

growth by generating income, employment, investment and exports. It also generates valuable
spin-off benefits, including preservation of cultural heritage, improved infrastructure and local
community facilities. The World Tourism Organisation (WTO) claims that tourism is currently
the world’s largest industry with annual revenues of over $3 trillion dollars. This accelerating
tourism industry is proved to be one of the important drivers of growth and prosperity,
employment generation, raises national income and improvement in Balance of payments of
the economy. It has generated a number of social and economic benefits, promotes national
integration and international understanding, and creates employment opportunities to a large
number of people and foreign exchange earnings.
Tourism industry is experiencing tremendous expansion over the years as result of its inclusion
into the national economic plan of developed and developing economies of the world.
Developing economies have been enacting policies to expand tourism, as a source of reliable
foreign exchange earning when traditional foreign exchange earning sector contribution
becomes limited in GDP. Over the years, tourism has emerged as a major segment of the Indian
economy, contributing substantially to the foreign exchange earnings and creating large-scale
employment opportunities.
Indian tourism sector is one of the most important service sectors of the Indian economy. Its
contribution to employment generation, Gross Domestic Product, Foreign Exchange earnings
is tremendous and significant. Tourism sector is also considered as the back bone for allied
sectors like hospitality, civil aviation, travel and transportation, hotel, resort, home stays, street
venders, spice shops, tour operators etc. Every year both Central and State government has
been investing huge amount for the development of tourism sector. This enhanced tourism
sector is to be one of the important drivers of growth, employment creation, increase of national
as well as individual income, improving the balance of payment position and foreign exchange
earnings, improving people’s standard of living, level of consumption etc. India’s wide variety
of all-season attraction provides huge opportunities for tourists. These attractions get
developed for the socio-economic benefit of the local communities, especially to achieve more
inclusive economic growth.

2 TOURISM IN INDIA
Tourism is a most desirable human activity; which is capable of changing the socio-cultural,
economic and environmental face of the World. Tourism is one of the largest and fast growing
industries in the world; it has the potential to influence the living pattern of communities. It is
one of the most important channels of cultural exchange which breaks down the barriers
between people of different parts of the world. Tourism is a collection of many activities,
services and industries that delivers a travel experience, including transportation,
accommodations, eating and drinking establishment, retail shops, entertainment businesses,
activity facilities and other hospitality services provided for individual or groups who travel.
Tourism also supports local handicrafts and cultural activities for many developing countries,
particularly the small countries. They are mainly dependent upon tourism; this tourism offers
a more reliable source of income. Number of factors, such as, population growth, shorter
working days, larger paid holidays, increase in general awareness among people for travelling
and the need for recuperation from tensions of modern life, have created favourable conditions
for the growth of tourism.
2.1 What is Tourism?

According to the United Nations World Tourism Organization (UNWTO), tourism is a social,
cultural and economic phenomenon, which entails the movement of people to countries or
places outside their usual environment for personal or business/professional purposes. These
people are called visitors (which may be either tourists or excursionists; residents or non-
residents) and tourism has to do with their activities, some of which imply tourism expenditure.
2.2 Types of Tourism in India

India is a country which witnesses a lot of diversity pertaining to its ecology, mythology,
history, its geographical diversity in terms of mountains, planes and plateaus and also the
medicinal diversity teaching us the Science of Life (Ayurveda). India showcases a variety of
tourism options which includes Ecological Tourism, Pilgrimage Tourism, Historical Tourism,
Adventure Tourism, Medical Tourism and an upcoming Ayurveda Tourism. So Tourism in
India could be broadly classified on the basis of above mentioned categories:

Figure 1 Types of Tourism in India
(Source: Dun and Bradstreet’s Report on Tourism in India)
 Leisure Tourism:
Leisure time can be defined as “free time”, not doing any work. It is that time to do
things that you normally have no time for in your daily life. Leisure tourism includes a
holiday with the following:
o Relaxation: Sleep, relax, reading, walk on the beach, taking a scenic drive
o Sport activities: hiking, swimming, surfing, running
o Visit places of interest and local attractions Visiting friends and relatives
o Shopping for goods that will be used by the tourist.
 Business Tourism:
Business tourism can be defined as “travel for the purpose of business”. Business
Tourism can be divided into three sections: -
(a) Trading for goods to be resold on a wholesale basis.
(b) Conduct business transactions e.g. visiting a client, contract negotiations.
(c) Attending a conference, exhibition or event associated with their business.

 Ecological Tourism:
The rich diversity in the flora and fauna with a blessing of the beautiful natural
attractions has encouraged Ecological Tourism in India. The forests cover on the
Andaman and Nicobar Islands, Orissa, Meghalaya and the Malabar Coast; the
Kaziranga and Jim Corbette wildlife sanctuaries; the mountain ranges in North India
and the Hill Stations such as Shimla, Kulu, Manali, Ooty; the Paradise on Earth,
Kashmir, the beautiful beaches at Goa and the backwaters of Kerala and much more is
nothing but a feast for all nature lovers.
 Pilgrimage Tourism:
India has a very strong mythological background and is also known as the LAND OF
GODS AND GODDESS. India being the most culturally developed country and the
birthplace of many saints, poets and philosophers has marked growth in Pilgrimage
Tourism since ancient times itself. Kedarnath, Badrinath, Amarnath, the Golden
Temple at Amritsar, Dwarka, Dargahs and Masjids at Delhi and Ajmer, churches and
temples at Goa are some of the common tourists’ attractions pertaining to Pilgrimage
tourism
 Historical Tourism:
India is a land which gave birth to many legendary rulers and warriors creating a
glorious historical background. Every city or place in India has a story to tell about its
history. The common tourists’ attractions for the same include the Taj Mahal at Agra,
the beautifully carved Ajanta Ellora and Khajuraho caves, the forts at Delhi, Rajasthan
and Maharashtra, one of the oldest and historical cities of India “Madurai” and many
more.
 Medical Tourism:
Medical Tourism is an upcoming kind of tourism in India. Due to low cost and efficient
medication facilities more number of people all over the world considers India to be a
better option for medication purpose.
 Ayurveda and Yoga Tourism:
Ayurveda may be regarded as the “Science of Life” which was developed long ago in
600 BC. India has witnessed an overall growth in tourist arrivals due to the upcoming;
Ayurveda Tourism. The state of Kerala in South India is the popular destination of
Ayurveda Tourism. The main focus of Indian Yoga is nothing but simple ‘yoga
sanas’and meditation which rejuvenates one’s mind, body and soul. There are many

Ashrams in India encouraging Yoga Tourism. The mountain ranges of the Himalayas,
Rishikesh, Kedarnath, Gangotri of northern India are some of the places where one can
get eternal peace and satisfy their spiritual quest and are the prefect destinations for
Yoga Tourism.
 Adventure Tourism:
Due to its geographical diversity India is one of the finest places for Adventure
Tourism. Mountaineering, skiing, trekking in the ranges of Himalayas, Camel safaris
in Rajasthan, River rafting in the Ganges near Rishikesh, Rock climbing, Wind rafting
and much more of an adventure for every adventure lover is bestowed by India upon its
Tourists.
 Sports Tourism:
Sports tourism refers to international travel either for viewing or participating in a
sporting event. Examples include international sporting events such as the Olympics,
world cup (soccer, rugby, and cricket), tennis, golf and Formula 1 Grand Prix.
 Wildlife Tourism:
Wildlife tourism is the observation of wild (non-domestic) animals in their natural
environment or in captivity. It includes activities such as photography, viewing and
feeding of animals. This form of tourism offers tourists customized tour packages and
safaris and is closely associated with eco-tourism and sustainable-tourism. Other minor
forms of tourism include Slum tourism, Luxury tourism, Agritourism, Geo-tourism,
culinary tourism and many more. Tourism is also a profitable industry for the following
sectors: accommodation venues, tour guides, recreation, attractions, events and
conferences, food and beverage, transportation and the travel trade.
2.3 Evolution of the Indian Tourism Sector

The first conscious and organized efforts to promote tourism in India were made in 1945 when
a committee was set up by the Government under the Chairmanship of Sir John Sargent, the
then Educational Adviser to the Government of India (Krishna, A.G., 1993). Thereafter, the
development of tourism was taken up in a planned manner in 1956 coinciding with the Second
Five Year Plan. The approach has evolved from isolated planning of single unit facilities in the
Second and Third Five Year Plans. The Sixth Plan marked the beginning of a new era when
tourism began to be considered a major instrument for social integration and economic
development.

But it was only after the 80’s that tourism activity gained momentum. The Government took
several significant steps. A National Policy on tourism was announced in 1982. Later in 1988,
the National Committee on Tourism formulated a comprehensive plan for achieving a
sustainable growth in tourism. In 1992, a National Action Plan was prepared and in 1996 the
National Strategy for Promotion of Tourism was drafted. In 1997, the New Tourism
Policy recognises the roles of Central and State governments, public sector undertakings and
the private sector in the development of tourism were. The need for involvement of Panchayati
Raj institutions, local bodies, non-governmental organisations and the local youth in the
creation of tourism facilities has also been recognised.
Today tourism is the largest service industry in India, with a contribution of 6.23% to the
national GDP and providing 8.78% of the total employment. India witnesses more than 5
million annual foreign tourist arrivals and 562 million domestic tourism visits. The tourism
industry in India generated about US$100 billion in 2008 and that is expected to increase to
US$275.5 billion by 2018 at a 9.4% annual growth rate. The Ministry of Tourism is the nodal
agency for the development and promotion of tourism in India and maintains the "Incredible
India" campaign.
Pre-1990 1990–2000 2000–05 2015

onwards
• The National Tourism • Various states in • A national policy on • Government
Policy was announced India declared tourism tourism was undertaken various
in 1982 as an industry announced in 2002, marketing initiatives
• The government • The government focusing on to attract tourists
formulated a stressed on private developing a robust • E – tourist visa
comprehensive plan public partnership in infrastructure launched and 1.69
in 1988 to promote the sector • Online travel portals million tourists
tourism • Government policies & low-cost carrier arrived in India in
give a fillip to the airlines gave a boost 2017 through this
hotel industry to domestic tourism facility.
• Travel and Tourism
sector accounted for 8
per cent of total
employment
opportunities in India
in 2017.
• In November 2018,
India attained third
position in world
tourism sector after
China and US.
Figure 2 Evolution of Tourism Sector in India
2.4 Indian Tourism Industry and Economic Growth

Tourism in India is important for the country's economy and is growing rapidly. The sector is
predicted to grow at an annual rate of 6.9% to ₹32.05 lakh crore (US$450 billion) by 2028

(9.9% of GDP). In October 2015, India's medical tourism sector was estimated to be
worth US$3 billion, and it is projected to grow to US$7–8 billion by 2020. In 2014, 184,298
foreign patients traveled to India to seek medical treatment.
Over 10 million foreign tourists arrived in India in 2017 compared to 8.89 million in 2016,
representing a growth of 15.6%.Domestic tourist visits to all states and union
territories numbered 1,036.35 million in 2012, an increase of 16.5% from 2011. In 2014, Tamil
Nadu, Maharashtra and Uttar Pradesh were the most popular states for
tourists. Delhi, Mumbai, Chennai, Agra and Jaipur were the five most visited cities of India by
foreign tourists during the year 2015. The Travel and Tourism Competitiveness Report for the
year 2017, ranked India 40th out of 136 countries overall.
‘Incredible India’ is the marketing slogan that attracts tourists to India from around the globe.
According to the world Travel and Tourism Council, despite a global recession in the year 2010
revenue from Indian Tourism increased by 6.9% to about $42 billion. This compares to a
worldwide tourism industry that remained flat during the same period. As Indians increasingly
visited other areas of their country, the domestic tourism fuelled much of the growth, not only
this international tourist also played an important role in the expansion of tourism industry.
During last three years the number of foreign tourist arrivals has increased gradually reaching
to around 7.46 million during January-December 2014.Foreign exchange earnings from
tourism grew by7.1% in terms of US dollar during Jan-Dec.2014 as compared to 5.9% over the
corresponding period of 2013.The tourist visa on arrival scheme enabled by electronic travel,
authorization launched by the Government of India in 2014 for 43 countries. To attract the
highest Foreign Direct Investment (FDI) the tourism and hospitality sector is among the top 15
sectors in India. According to the data released by department of industrial policy and
promotion, during April 2000-Feb2015, the Indian tourism sector attracted around US$7862.08
million of FDI. For domestic and international tourists India has been recognized as a
destination for spiritual and medical tourism. By 2015, India is expected to receive nearly half
a million medical tourists, indicating an annual growth of about 30%. According to World
Tourism organization(WTO), foreign tourist’s arrivals(FTA)are expected to increase to 13.42
million by 2024.

3 IMPACTS OF TOURISM ON THE ECONOMY
Tourism can bring many economic and social benefits, particularly in rural areas and
developing countries, but mass tourism is also associated with negative effects. Tourism can
only be sustainable if it is carefully managed so that potential negative effects on the host
community and the environment are not permitted to outweigh the financial benefits. Tourism
industry in India has several positive and negative impacts on the economy and society. These
impacts are highlighted below:
3.1 Positive impacts

1. Generating Income and Employment:
Tourism in India has emerged as an instrument of income and employment generation
poverty alleviation and sustainable human development. It contributes 6.23% to the
national GDP and 8.78% of the total employment in India. Almost 20 million people
are now working in the India’s tourism industry.
2. Source of Foreign Exchange Earnings:
Tourism is an important source of foreign exchange earnings in India. This has
favourable impact on the balance of payment of the country. The tourism industry in
India generated about US$100 billion in 2008 and that is expected to increase to
US$275.5 billion by 2018 at a 9.4% annual growth rate.
3. Preservation of National Heritage and Environment:
Tourism helps preserve several places which are of historical importance by declaring
them as heritage sites. For instance, the Taj Mahal, the Qutab Minar, Ajanta and Ellora
temples, etc. would have been decayed and destroyed had it not been for the efforts
taken by Tourism Department to preserve them.
4. Developing Infrastructure:
Tourism tends to encourage the development of multiple-use infrastructure that benefits
the host community, including various means of transports, health care facilities, and
sports centers, in addition to the hotels and high-end restaurants that cater to foreign
visitors. The development of infrastructure has in turn induced the development of other
directly productive activities.
5. Promoting Peace and Stability:
Tourism industry can also help promote peace and stability in developing country like
India by providing jobs, generating income, diversifying the economy, protecting the

environment, and promoting cross-cultural awareness. However, key challenges like

adoption of regulatory frameworks, mechanisms to reduce crime and corruption, etc,
must be addressed if peace-enhancing benefits from this industry are to be realized.
6. The Multiplier Effect:
The flow of money generated by tourist spending multiplies as it passes through
various sections of the economy.
7. Regional Development:
The underdeveloped regions of the country can greatly benefit from tourism
development. Many of the economically backward regions contain areas of high scenic
beauty and cultural attractions.
8. Economic Value of Cultural Resources:
Tourism provides monetary incentives for the development of many local crafts and
culture, thus it has an effect on the income of the local artisans and artists
9. Promotion of International Understanding:
Tourism can also become an effective tool to develop a better understanding and
interaction amongst people of different countries.
3.2 Negative Impact

1. Undesirable Social and Cultural Change:
Tourism sometimes led to the destruction of the social fabric of a community. The more
tourists coming into a place, the more the perceived risk of that place losing its identity.
A good example is Goa. From the late 60’s to the early 80’s when the Hippy culture
was at its height, Goa was a haven for such hippies. Here they came in thousands and
changed the whole culture of the state leading to a rise in the use of drugs, prostitution
and human trafficking. This had a ripple effect on the country.
2. Increase Tension and Hostility:
Tourism can increase tension, hostility, and suspicion between the tourists and the local
communities when there is no respect and understanding for each other’s culture and
way of life. This may further lead to violence and other crimes committed against the
tourists. The recent crime committed against Russian tourist in Goa is a case in point.
3. Creating a Sense of Antipathy:
Tourism brought little benefit to the local community. In most all-inclusive package
tours more than 80% of travellers’ fees go to the airlines, hotels and other international
companies, not to local businessmen and workers. Moreover, large hotel chain

restaurants often import food to satisfy foreign visitors and rarely employ local staff for
senior management positions, preventing local farmers and workers from reaping the
benefit of their presence. This has often created a sense of antipathy towards the tourists
and the government.
4. Adverse Effects on Environment and Ecology:
One of the most important adverse effects of tourism on the environment is increased
pressure on the carrying capacity of the ecosystem in each tourist locality. Increased
transport and construction activities led to large scale deforestation and destabilization
of natural landforms, while increased tourist flow led to increase in solid waste dumping
as well as depletion of water and fuel resources. Flow of tourists to ecologically
sensitive areas resulted in destruction of rare and endangered species due to trampling,
killing, disturbance of breeding habitats. Noise pollution from vehicles and public
address systems, water pollution, vehicular emissions, untreated sewage, etc. also have
direct effects on bio-diversity, ambient environment and general profile of tourist spots.
5. Import Leakage:
This commonly occurs when tourists demand standards of equipment, food, drinks, and
other products that the host country cannot supply, especially developing countries.
6. Seasonal Character of Job:
The job opportunities related to tourism industry are seasonal in nature as they are
available only during the tourist season.
7. Increase in Prices:
Increasing demand for basic services and goods from tourists will often cause price
hikes that negatively affect local residents whose income does not increase
proportionately.

4 ECONOMIC DEVELOPMENT IN TOURISM
4.1 Economic Contributions of Travel and Tourism

The World Travel and Tourism Council together with Oxford Economics have developed an
approach for measuring the direct, indirect as well as induced contribution of travel and
tourism to GDP and employment:
 the direct contributions of travel and tourism cover the total spending within a
particular country on travel and tourism by residents and non-residents for business
and leisure. It also includes government spending on travel and tourism services
related to visitors (e.g. museums, national parks etc);
 the indirect contributions of travel and tourism refer to investment, purchase of
goods and services by the sectors dealing directly with tourists (e.g. purchases of
cleaning services by hotels) and government spending on travel and tourism
development.; and
 the induced contributions cover the spending by those directly or indirectly
employed in travel and tourism sector.
Figure 3 Economic Contributions of Travel and Tourism

(Source: TRAVEL & TOURISM ECONOMIC IMPACT 2018)
India is a unique destination for domestic and foreign travellers. India is a huge Country with
great values. The saying “Tahiti Devo Bhava” welcomes and pleases the foreign arrivals. The
simplicity, flora and fauna of the villages of India are appreciated by foreign tourists. Huge
number of foreign travelers arrives to India to learn yoga, meditate or spend time at an ashram.
The historical and architectural sites of the Country welcome people from all around the globe.
The handicrafts particularly carpets, jewels, leather goods, ivory, brass work are eye catching.
The sports events, educational facilities, IT industries, world class hotels, cultural events,
festivals, fairs etc grab foreign tourist towards India. The cost of living on basic facilities, cheap
medical treatments and balanced weather conditions also attracts tourists. The wildlife
sanctuaries, historical monuments, pilgrim centers, forts, universities, reservoirs, beaches,
temples, national parks, palaces and many other places of tourist destinations welcomes foreign
tourist in great number towards India.
Figure 4Key Statics about Tourism,2017
(Source: India Tourism Statics,2018)
4.2 Foreign Tourist Arrival(FTA) in India

Foreign Tourist Arrival(FTA) is continued to grow from 2.65 million in 2000, 2.54 million in
2001,5.08 million in 2007 to reach up to 10.04 in 2017.The growth rate of Foreign Tourist
Arrivals in 2000 was 6.7%. In the year 2001, 2002 and 2009 the arrival of foreign tourists saw
a sudden decrease. During the year 2014, India registered growth of 10.2 percent. This clearly
represents the growth of tourism sector in India. The Compound annual growth rate (CAGR)
in FTAs in India during 2001 to 2017 was 8.97 percent. While the years 2003 to

2007,2010,2014 and 2017 saw double –digit positive growth, there was negative growth in the
years 2001,2002 and 2009.
The following table shows the foreign tourist arrivals in India during the year 2000 to 2017.
Table 1 Foreign Tourist Arrival in India
YEAR FTA in India %change

(in millions)
2000 2.65 6.7
2001 2.54 -4.2
2002 2.38 -6.0
2003 2.73 14.3
2004 3.46 26.8
2005 3.92 13.3
2006 4.45 13.5
2007 5.08 14.3
2008 5.28 4.0
2009 5.17 -2.2
2010 5.78 11.8
2011 6.31 9.2
2012 6.58 4.3
2013 6.97 5.9
2014 7.68 10.2
2015 8.03 4.5
2016 8.80 9.7
2017 10.04 14.0
(Source: Bureau of Immigration, Govt. of India)
During 2017, the Delhi airport has maximum number of FTA in India i.e. 28.35% followed by
Mumbai airport 15.72%, Harishdapur land check post 11.69%, Chennai airport 7.16% and etc.

Figure 5 Top 10 International Check Posts for Foreign Tourist Arrivals (FTAs) in India
Figure 6 Foreign Tourists Arrival in India

4.3 Domestic Tourist Arrival in India

• Domestic tourism also witnessed growth due to increased marketing efforts through
television commercials, tour operators and agents of various states highlighting the best
tourism experiences on offer. Domestic tourism is expected to grow at a CAGR of 11%
in the forecast period in terms of number of trips. The number of holiday takers overall
is expected to increase at a CAGR of 5%, boosting domestic tourism. Additionally,
disposable incomes will rise, enabling locals to take more trips annually. Furthermore,
the weakness of the Indian rupee against the dollar and other currencies will encourage
locals to take trips within the country, where their purchasing power will be stronger.
Table 2 Domestic Tourist Arrival in India
Domestic tourism continues to be an important contributor to the sector. From table, Numbers
of domestic tourist visits to states and UTs during previous years have been registrating an
increasing trend.
As per the data furnished by State/UT Governments and other information available with the
Ministry of Tourism, the domestic tourist visits during the year 2016 were 1613.6 million as
compared to 1432 million in 2015 registering a growth of 12.68% over 2015.
4.4 Foreign Exchange Earnings from Tourism in India

Foreign Exchange earnings from tourism is the result of Consumption expenditure i.e.
payments made for goods and services by foreign visitors in the economy from the foreign

currency brought by them. Even though India is not on top in number of foreign tourist arrivals,
the amount of money spent by foreign tourists on per-capita basis is more than any other
country. The main source for foreign exchange earnings is the large number of business visitors
to India and longer duration of their stay. The investments on hotels, air transport, basic
infrastructures and facilitation systems also contribute to foreign exchange earnings. The
Indian handicraft particularly jewels, carpets, leather goods, ivory and brass works are the main
shopping items of Foreign Tourists. They also spend their earnings on entertainment,
adventurous activities, sports activities etc. Foreign tourists are also attracted by the educational
facilities available in India. The following table shows Foreign exchange earnings in India from
tourism sector for the period of 2000 to 2017.
Table 3 Foreign Exchange Earnings from Tourism in India
Year Earnings % change Earnings % change

(US$ millions) (₹ crores)
2000 3460 15.0 15626 20.7
2001 3198 -7.6 15083 -3.5
2002 3103 -3.0 15064 -0.1
2003 4463 43.8 20729 37.6
2004 6170 38.2 27944 34.8
2005 7493 21.4 33123 18.5
2006 8634 15.2 39025 17.8
2007 10,729 24.3 44,360 13.7
2008 11,832 10.3 51,294 15.6
2009 11,136 -5.9 53,700 4.7
2010 14,193 27.5 64,889 20.8
2011 16,564 16.7 77,591 19.6
2012 17,737 7.1 94,487 21.8
2013 18,445 4.0 107,67 1 14
2014 20,236 9.7 123,32 0 14.5
2015 21,071 4.1 135,19 3 8.8
2016 22,923 9.8 154,14 6 14.0
2017 27,693 20.8 177874 15.4

(Source: (i) Reserve Bank of India, for 2000 -2015

(ii) Ministry of Tourism, Govt. of India, for 2016-2018(Jan- June))
In the year 2000, Foreign Exchange Earnings in India was 15626 cr. Rest. The percentage
change over the previous year was 20.70. The Foreign Earnings saw a decrease in the year
2001 and 2002.As per report prepared by ministry of tourism, FEEs from tourism in India in
2017 in Rs. Terms were Rs. 177874 core as compared to Rs.154146 core in 2016 registering
a growth of 15.4% in 2017 over 2016.
FEEs during the period 2017 were US$ 27.693 billion with a growth of 20.8% over same period
of previous year. The FEEs from tourism in US $ terms during 2016 were US $ 22.92 billion
with a growth rate of 8.8% as compared to FEE of US$ 21.07 billion during 2015 with a growth
of 4.1% over 2014.
4.5 Contribution of Travel and Tourism to GDP in India

The major component of GDP is consumption, which is driven by demand for goods and
services. Travel and Tourism industry plays as a very important source of Indian Gross
Domestic Product. Total contribution of Travel and Tourism to Gross Domestic Product is
comprised of direct contribution of Travel and Tourism to Gross Domestic Product, domestic
supply chain, capital investment, government collective spending, imported goods from
indirect spending and induced contribution. Direct contribution of Travel and Tourism to Gross
Domestic Product mainly consists of Gross Domestic Product generated by industries which
includes hotels, travel agents, airlines and other passenger service with directly deal with
tourists. It also comprises of activates of restaurants and leisure industries that deal directly
with tourists. It comprises of internal tourism consumption and purchase by tourism providers
including imported goods. The internal tourism consumption is the total revenue generated
within a country by industries that deal directly with tourists. This does not include spending
abroad by residents. It comprises of visitor exports and domestic expenditure. Visitor’s export
refers to the expenditure of the international tourists within the country for the purpose of both
business and leisure trips. Domestic expenditure refers to expenditure of the residents of the
country, within a country for both business and leisure trips. Purchase by tourism providers
including imported goods refers to the spending of tourists on goods native to that land and
also spending on the goods that are imported to that particular place. Value for money and
quality matters a lot in purchasing of goods. Domestic supply chain refers to purchase made

on domestic goods and services directly by different industries. Capital investment includes
spending of industries which are involved in travel and tourism. This also involves spending
by other industries on certain assets of tourism such as accommodation, passenger transport
equipments, restaurants and leisure facility for specific use of tourism. Government collective
spending refers to expenditure made in support of general tourism activity. It includes visitor’s
information services, administrative services, tourism promotion etc. The broader contribution
to Gross Domestic Product is the expenditure of those who are directly or indirectly employed
by travel and tourism. The following table shows contribution of Travel and Tourism to Indian
Gross Domestic Period for the period of 2000-2017
Table 4 Travel and Tourism Contribution to GDP
(Source: Ministry of Tourism, Govt. of India)
Above table reveals that tourism highly contributes to the Gross Domestic Product of a nation.
The total contribution of Travel and Tourism to Gross Domestic Product in the year 2000 was
1983.66 billion. The real growth rate was 8.6 percent and percentage share in Gross Domestic
Product was 9.2. The total contribution of Travel and Tourism to Gross Domestic Product in
the year 2005 saw a decrease compared to 2004 and was 2499.64 billion. The real growth rate

was -12.5 percent and percentage share in Gross Domestic Product was 7. In the year 2010 the
contribution of Travel and Tourism to Gross Domestic Product was 4768.45 billion. The real
growth rate was 5.6percent and percentage share in Gross Domestic Product was 6.5. In the
year 2015, the total contribution of Travel and Tourism to Gross Domestic Product was seen
to have a constant growth and was 8309.4 billion. The real growth rate was 7.4 percent and
percentage share in GDP was 7 percent. In year 2017, it saw decrease compared to 2015 i.e.
Rs.5141.1 billion and % share in GDP is 6.7.
4.6 Contribution of Travel and Tourism to Employment in India

Travel and tourism industry can help in poverty elimination by generating jobs and other
economic opportunities. Tourism is labour-intensive compared to other sectors, has high
female and youth employment ratios, and it is not necessarily import intensive. Travel and
tourism sector has low barriers to entry, and encompasses a range of enterprises that provide
development opportunities to the local economy.
In India tourism sector has very strong linkage with socio-economic prosperity. The
employment potential of tourism sector in India is higher than any other Sector. UNWTO
studies shows that tourism volumes and related receipts like GDP, employment and export
earnings are expected to move away from the developed countries and towards the less
developed countries as a result of favourable economic, motivational, technological and policy
factors. The following table shows number of employment in travel and tourism sector and
share in total employment from 2000 to 2015 in India.

Table 5 Travel and Tourism Contribution to Employment
(Source: Ministry of Tourism, Govt. of India)
Above table shows that in the year 2000 around 48313.3 thousands of people were employed
due to travel and tourism. The real growth rate was 0.5 percent and percentage share in total
employment was 11.8 percent. There was an increase in the employment growth up to the year
2004.But in the year 2005 employment growth decreased to 42439 thousand with a rate of real
growth of -13.1 percent and percentage share in employment being 9.3 percent. In the year
2000, 2009 and 2010 the decrease in employment rate due to travel and tourism was noticed.
Steady increase in the employment growth was registered since 2011.In the year 2015, the
number of people employed in travel and tourism industry was found to be 37315 thousand
and real growth rate was 1.7 percent. Percentage share in total employment was 8.7 percent.
The Fast growing tourism sector highly influences the employment opportunities.

5 GOVERNMENT INTITATIVES
Ministry of Tourism has undertaken several initiatives to provide a further boost to the sector
such as launch of new schemes like Swadesh Darshan and PRASAD, revamping of existing
schemes such as Hunar se Rozgar tak, extending e-Tourist Visas to more countries, developing
a Mobile Application for Tourists, introducing an Incredible India Tourist Helpline, and
undertaking various skill development initiatives such as setting up of Indian Culinary Institute,
approval of new Institutes of Hotel Management etc,
 Hunar se rozgar’ programme:

A special initiative was launched in 2009-10 for the create ion of employable skills
among youth belonging to economically weaker sections of the society in the age group
of 18- 25 years with the basic objective to reduce the skill gap affecting the hospitality
and tourism sector and to ensure the spread of economic benefit of tourism to the poor.
The programme offers short duration courses of 6 to 8 weeks which are fully funded by
the Ministry of Tourism.
 Visa on arrival:
 Considering the importance of Visa facilities in enhancing tourist inflow, the facility of
“Long Term Tourist Visas” of five years’ duration with multiple entries, carrying a
stipulation of 90 days for each visit, has been introduced on a pilot basis for the
nationals of the 18 selected countries.
 The findings of an evaluation study conducted by this Ministry has reinforced the belief
that the presence of the facility of “Visa on Arrival” (VoA) significantly influences the
tourists”travel plans to any country.
 During 2012, a total number of 16,084 VoAs (Visa on Arrival) were issued as compared
to 12,761 VoAs during the corresponding period of 2011, thereby showing a growth of
26%. Efforts are on to extend the VoA facility for the nationals of more countries.
 Swadesh Darshan Scheme:
 Based on specific themes, government has identified 15 circuits which includes
Krishna Circuit, Buddhist Circuit, HimalayanCircuit, North East Circuit,
Coastal Circuit, wildlifecircuit & tribal circuit.
 So far 73 projects have been sanctioned under the Swadesh Darshan Scheme
since FY15. During 2018-19, a total of six projects worth Rs 304.3 crore (US$
42.18 million) were sanctioned under the Swadesh Darshan scheme. Four new

projects for Rs 190.46 Crores are sanctioned under the tourism infrastructure
development schemes, Swadesh Darshan and PRASHAD in the states of
Meghalaya, Gujarat and Uttar Pradesh recently.
 Under Interim Budget 2018-19, the Government of India allotted Rs 1,160
crore (US$ 160.78 million) for development of tourist circuits under Swadesh
Darshan.
 Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive
(PRASHAD):
 National Mission on Pilgrimage Rejuvenation & Spiritual Augmentation was
implemented by the Ministry for enhancing the facilities provided& infrastructure
at pilgrimage centres of all cities
 Under Interim Budget 2018-19, the Government of India allotted Rs 160.50 crore
(US$ 22.25 million) for development of tourist circuits under PRASHAD.
 Safety and Security Initiatives
 Ministry of Tourism launched a 24x7 Toll Free Multilingual Tourist Inform-
Helpline in 12 languages which will provideinformationrelatingto traveling India
 Ministry of Tourism issued guidelines on Safety and Security for States/UT along
with tips for travelers
 Launched Social Media Awareness Campaign in the spirit of ‘Atithidevo Bhava’ to
develop importance of good conduct and behaviour towards tourists
 Initiative to conduct constant dialogue with State/UTs for drawing ideas for
development and promotion of tourism
 E-Tourist Visa
 On 27 November 2014, the Electronic Travel Authorisation (ETA) facility became
operational for citizens of over 40 eligible countries, including those who are
eligible for visa on arrival.
 ETA is issued for tourism, visiting friends and family, short duration medical
treatment and business visits. The scheme was renamed to e-Tourist Visa (eTV) on
15 April2015.
 E-Tourist Visa allows arrival at the 16 airports all over India.
 In January 2016 it was announced that the multiple entries will become available
and that e-Tourist Visa holders will receive a gift pack on arrival.
 The eTV list was extended for tourists from 37 more countries on 26 February 2016.

6 CONCLUSION
Tourism sector is one of the fast growing service sectors in the World. It acts as a powerful
instrument for economic growth. India is a unique and perfect destination for both domestic
and foreign visitors. India’s wide variety of flora, fauna, tourist destinations, health and
wellness centers, eco-tourism spots, adventure activities, culture, heritage, educational
institution etc attract both domestic as well as foreign tourists towards it. The increase in the
tourist arrivals have resulted in the rapid growth of tourism sector in India. The growth of
tourism sector has resulted in employment generation, foreign exchange earnings, expansion
of infrastructure facilities, capital investment, socio-economic growth, increasing in the
contribution to GDP and so on. India has evidenced sustainable and inclusive economic growth
due to the wide expansion of tourism sector.

7 REFERENCES
 Ohlin, Rahul. (2017). Tourism and economic growth in India. Future Business Journal.
3. 1-12. 10.1016
 TRAVEL & TOURISM ECONOMIC IMPACT 2018
 Auroubindo Ganesh and Dr. Madhavi, C. 2007. Jan-June, “Impact of Tourism on Indian
Economy - A Snapshot” Journal of Contemporary Research in Management, Volume-
1, No.1, 2 PP. 235-240.
 Ministry of Tourism, India
 Smite Chand., “Growth of Tourism in India: Its impact on Employment and Economic
Development”
 Market Research Division, Ministry of tourism, GOI, 2018“Tourism Statistics 2018”

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SARVAJANIK EDUCATION SOCIETY

SARVAJANIK COLLEGE OF ENGINEERING & TECHNOLOGY

Gujarat Technological University

FACULTY OF CIVIL ENGINEERING

“TOURISM AS A DRIVER OF ECONOMIC GROWTH AND

In the partial fulfilment of the requirement for the award of degree of

TOURISM PLANNING AND DEVELOPMENT

JARIWALA POOJA BIPINCHANDRA (180420748006)

SARVAJANIK COLLEGE OF ENGINEERING AND TECHNOLOGY, SURAT.

Faculty of Civil Engineering

(JARIWALA POOJA BIPINCHANDRA)

(Enrollment No: 180420748006)

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 2

SARVAJANIK COLLEGE OF ENGINEERING AND TECHNOLOGY, SURAT

______________________ ____________________ ______________________

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 3

Table 1 Foreign Tourist Arrival in India.................................................................................. 17

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 4

Tourism is a significant driver of economic and social development. It stimulates economic

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 5

2.1 What is Tourism?

2.2 Types of Tourism in India

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 6

Figure 1 Types of Tourism in India

(Source: Dun and Bradstreet’s Report on Tourism in India)

(a) Trading for goods to be resold on a wholesale basis.

(b) Conduct business transactions e.g. visiting a client, contract negotiations.

(c) Attending a conference, exhibition or event associated with their business.

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 7

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 8

2.3 Evolution of the Indian Tourism Sector

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 9

Pre-1990 1990–2000 2000–05 2015

Figure 2 Evolution of Tourism Sector in India

2.4 Indian Tourism Industry and Economic Growth

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 10

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 11

3 IMPACTS OF TOURISM ON THE ECONOMY

3.1 Positive impacts

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 12

environment, and promoting cross-cultural awareness. However, key challenges like

3.2 Negative Impact

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 13

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 14

4 ECONOMIC DEVELOPMENT IN TOURISM

4.1 Economic Contributions of Travel and Tourism

Figure 3 Economic Contributions of Travel and Tourism

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 15

(Source: TRAVEL & TOURISM ECONOMIC IMPACT 2018)

Figure 4Key Statics about Tourism,2017

(Source: India Tourism Statics,2018)

4.2 Foreign Tourist Arrival(FTA) in India

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 16

Table 1 Foreign Tourist Arrival in India

YEAR FTA in India %change

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 17

(Source: Bureau of Immigration, Govt. of India)

Figure 6 Foreign Tourists Arrival in India

(Source: Bureau of Immigration, Govt. of India)

TOURISM AS A DRIVER OF ECONOMIC GROWTH AND DEVELOPMENT 18

4.3 Domestic Tourist Arrival in India

Table 2 Domestic Tourist Arrival in India