9th Five Year Plan (Vol-2)

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Transport and Communication
Transport || Postal Sector || Telecom Sector || Information and Broadcasting || Information Technology || Tourism


7.6.1 Tourism is a major phenomenon of the modern society with significant socio-economic consequences. Over the years, tourism has emerged as a major segment of Indian economy contributing substantially to the foreign exchange earnings which have increased from Rs.4892 crore in 1991-92 to Rs. 10417 crore in 1996-97. The direct employment in the sector during 1995-96 was about 8.5 million persons, accounting for about 2.4 per cent of the total labour force.

7.6.2 An important feature of the tourism sector, which is of particular significance to India, is its contribution to national integration and creation of a harmonious social and cultural environment. Over 100 million domestic tourists visiting different parts of the country every year return with a better understanding of the people living in the different regions of the country and the geographical, biological and cultural diversity of India. Tourism also encourages respect for, and preservation of, monuments and heritage properties and helps the promotion of art forms, crafts and culture.

Review of the Eighth Plan

7.6.3 There has been a gradual increase in the Central Plan outlay for tourism over the Plan periods from Rs.1.58 crore in the Second Plan to Rs.272.00 crore in the Eighth Plan.

7.6.4 The details of the expenditure during the Eighth Plan period for the Department of Tourism and ITDC are given in the Table 7.6.1

Table 7.6.1
Eighth Plan Expenditure- Tourism

--------------------------------------------------------------------------------------------------------------------------------------------- Sub-head 8th 1992-93 1993-94 1994-95 1995-96 1996-97 8th Plan Exp. Exp. Exp. Exp. Exp. Plan Outlay Exp. (1991-92 (Current Prices) Prices) --------------------------------------------------------------------------------------------------------------------------------------------- Deptt.of 236 73.57 86.48 89.11 97.87 89.66 436.59 Tourism
ITDC 36 5.84 7.28 8.82 14.20 17.69 53.83 (32) (0.84) (2.28) (8.82) (14.20) (17.69) (43.83) --------------------------------------------------------------------------------------------------------------------------------------------- Total 272 79.41 93.76 97.93 112.07 107.35 490.42 (32) (0.8) (2.28) (8.82) (14.20) (17.69) (43.83) --------------------------------------------------------------------------------------------------------------------------------------------- Figure in bracket indicates IEBR.

7.6.5 As against the Eighth Plan outlay of Rs.272 crore (1991-92 prices), the expenditure during the period has been Rs.490.42 crore (current prices). The entire Plan expenditure of ITDC from the year 1994-95 onwards has been met from internal and extra budgetary resources. Bulk of the expenditure of the Department of Tourism was incurred on tourism publicity.

7.6.6 The major schemes of the Department of Tourism relate to Promotion and Publicity, Central Assistance for the Development of Tourist Infrastructure, Human Resource Development and Incentives. The Central Government investment for the improvement and creation of tourist facilities is channelised through State/UT Governments on a cost sharing basis. Under this pattern of funding, the Central Department of Tourism meets almost the entire expenditure, except the cost of land and interior decoration in the case of construction projects.

7.6.7 In order to finance major projects for development of tourist infrastructure, a new pattern of financing was conceived during the Eighth Plan. Apart from the State and the Central Governments contributing towards the funding of projects, the new scheme, known as Equity scheme, envisaged a major role for the financial institutions. As the State Governments could not formulate bankable projects, the scheme could not, however, make much headway in the Eighth Plan.

7.6.8 The Eighth Plan envisaged a growth of 9% to 10% per annum in international tourist arrivals and about 2.75 million tourist arrivals were anticipated by the end of the Eighth Plan. The target, however, could not be achieved due to various reasons such as armed conflict in the Gulf region, reduction in international outbound traffic during the period, law and order problems and health hazards in some parts of the country. The number of tourists who visited India during the Eighth Plan period increased from 1.78 million in 1991-92 to 2.33 million in 1996-97.

7.6.9 The main emphasis in the Eighth Plan for the ITDC was on consolidation rather than on expansion of accommodation. The Corporation, which earned a net profit of Rs.3.11 crore in 1991-92 improved the financial performance during the Eighth Plan period and earned a net profit of Rs. 55.8 crore in 1996-97.

Policy Framework for the Ninth Plan

7.6.10 The policy objective in the Ninth Plan will be to work towards creating a tourism product that provides the persons travelling to various places a pleasant experience on their trips, through an environment of peace, stability, security and an integrated system of physical infrastructure that does not fail. Tourism should become a unifying force nationally and internationally, fostering better understanding through travel. It should also help to preserve, retain and enrich our world-view and life-style, our cultural expressions and heritage in all its manifestations.

7.6.11 It is important to realise that development of tourism has an important indigenous dimension. The number of middle and lower middle class tourists visiting distant places in the country is on the increase. The captive tourism around the places of pilgrimage is also increasing fast. There is a need for creating adequate, hygienic, decent, low-cost facilities for such tourists. The measures for ensuring safety, particularly in difficult places of pilgrimage at high altitudes, should be emphasised. Many of these places of captive tourism are in the regions which are economically poor. Development of tourism in these areas, therefore, will accelerate the economic development of these regions.

7.6.12 The diversity of the tourism product in India makes it imperative that the development of tourism has to be a joint effort of all the infrastructural Departments, public sector undertakings, State Governments and the private sector. The approach to tourism development in the Ninth Plan will accordingly be on coordinated efforts by the public and private sector and the major thrust will be on selected areas of tourism.


The approach in the Ninth Plan will be to concentrate on the development of selected centres and circuits through effective coordination of public and private efforts so as to achieve synergy in the development of this sector. The Government will focus on the development of basic infrastructure such as transport facilities and civic amenities and play a facilitating role in the provision of accommodation and other facilities for all classes of tourists, both domestic and international. A mechanism will be developed for effective coordination of all the relevant agencies concerned with promotion of tourism. In developing tourism, it will be ensured that the sites are conserved and the environment is not degraded. The major thrust areas in the Ninth Plan will be

  1. Indigenous and Natural Health Tourism
  2. Rural and Village Tourism
  3. Pilgrim Tourism
  4. Adventure Tourism
  5. Heritage Tourism
  6. Youth and Senior Citizens Packagers.

7.6.13 People's participation in tourism development including Panchayati Raj institutions, local bodies, non-governmental organisations and enterprising local youth will be encouraged to create public awareness and to achieve a wider spread of tourist facilities

7.6.14 The infrastructure projects which are commercially viable, will be funded by the Govt. under the Equity Scheme except in the North Eastern States and selected hill districts in the country. The existing pattern of funding would generally be applicable only to purely promotional and product development projects and in the North East Region and selected hill districts where the equity funding pattern is not insisted upon.

7.6.15 The main schemes of the Department of Tourism, namely Central Assistance for Development of Tourism Infrastructure and Promotion and Marketing would continue in the Ninth Plan. Efforts would be made to make them more effective.

7.6.16 In order to give boost to foreign exchange earnings, employment and income generation through tourism activities, Export House Status will be granted to tourism units.


The Govt. will grant Export House Status to Tourism units in the Ninth Plan. The threshold limit for eligibility of such status for tourism units will also be revised downwards. The grant of Export House Status will entitle the tourism units to get all the benefits that are available to recognised export houses including the entitlement of

1. Special Import Licence (SIL)
2. Free Trading of these SILs
3. Import of several equipments under these SILs
4. Waiver of Bank guarantee for imports
5. Import of cars against foreign exchange earnings.

7.6.17 ITDC will consolidate its existing activities. The performance of ITDC will be improved through restructuring of the existing properties and improving the quality of service. No project relating to construction of new hotels is envisaged during the Ninth Plan period

Tourism Promotion in North East

7.6.18 The availability of a diverse tourism product in the North East offers tremendous scope for development of tourism in the region. Efforts will be made to exploit the potential through schemes to be specially designed for the purpose during the Ninth Plan period.

7.6.19 In line with the recommendation of a high level Commission which has identified, among other things, the infrastructural needs of the North East Region, the development activities would be selective and aimed at promoting eco-tourism and adventure tourism. The programme of development of tourism of State and Central Government would be co-ordinated. Local residents will be encouraged through suitable schemes to provide low-cost, decent guest room facilities for the tourists. Special emphasis will be laid on production of tourist brochures and other literature and on training of local guides

Intersectoral Coordination

7.6.20 Availability of basic infrastructural components like airports, railways, roads, waterways etc. is a critical requirement for the development of tourism. Inadequate airline capacity and limited passenger handling capacity of airports is a major bottleneck in the expansion of tourism. The development programme of Civil Aviation sector particularly that of Airports Authority of India would aid in promotion of tourism. In order to facilitate movement of tourists, particularly where the road segments are in poor condition, it will be important to develop water transport systems like cruises, catamarans, hydroplanes etc. in the private sector and the necessary berthing facilities at the respective ports.

7.6.21 Foreign tourists have a special fascination for rail transportation. The Ministry of Railways has introduced two Special Tourist Trains and the introduction of more of such trains is being considered with private sector participation. Besides making efforts at providing railway platforms and linkages to all the international airports for boarding a train straight to connect important tourist centres, hygienic conditions, environment and passenger facilities in and around the main railway stations near the identified tourist centres will be improved.

7.6.22 The road segments connecting tourist centres and the road transport system require improvement as about 80% of the foreign and domestic tourists make use of the road transport system for visiting different destinations. It is necessary to produce good quality road maps and provide adequate road signs in all the tourist routes


7.6.23 Availability of trained manpower is essential for the development of a service sector like tourism. At present, there are 20 Institutes of Hotel Management and Catering Technology and 13 Foodcraft Institutions functioning in the country. A number of institutes have also started coming up in private sector since it can find adequate number of trainees with the required paying capacity.

7.6.24 During the Ninth Plan period, the Government will consider the setting up of new institutes only at such places where the demand for trained manpower far exceeds the availability and the private sector is not interested or cannot be motivated in providing adequate training facilities to fill the gap. Development of training facilities will be encouraged in the private sector and the Government will gradually withdraw from providing budgetary support for the setting up and running of training institutes.

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