Covid-hit Tourism Sector needs Soothing Balm

With the second wave hitting India badly, the tourism industry has completely been paralyzed.


The travel and tourism sector continues to bear the burn of Covid-19. An estimated loss of up to 15 lakh crores has been suffered by this sector. 70% of people employed (directly or indirectly) in tourism industry have been affected in the face of the Covid-19 pandemic. The Covid-19 is here to stay for a while, until the majority of population gets vaccinated; so this industry needs to adjust with new normal and adopt flexible policy solutions.

The government needs to begin to address the recovery process. Domestic tourism can help mitigate losses but the real recovery depends upon international tourism which also adds to foreign exchange reserves of the country.

Despite being the worst affected industry the budget allocation in 2021-22 was slashed by 19% for this sector. The budgetary allocation for flagship schemes like Swadesh Darshan has been reduced. The budget allocation for the theme-based circuits under the Swadesh Darshan scheme has been decreasing since 2019. Sufi Circuit was identified one of the circuits under Swadesh Darshan scheme but there hasn’t been a single project sanctioned for this circuit.

The ministry is also trying to restrict four-five circuits per state which could potentially impact the development of various other tourist destinations in the state. The tourism sector has huge potential in this country because of its’ rich and diversified culture.

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Prior to Covid-19 Odisha had seen significant increase in the Domestic Tourist Arrivals as well as Foreign Tourist arrival. The Pilgrimage Rejuvenation And Spirituality Augmentation Drive (PRASHAD) is another other major scheme to boost tourism. The development of Puri Shree Jagannath Dham has been identified under this scheme. In the year 2014-15 the scheme was launched and Rs 50 crores was allocated for this project. Odisha has received Rs 10 crore since the launch of the scheme. Another centrally sponsored scheme “Iconic tourist destination” was announced in 2019. Under this scheme 19 tourist destinations have been identified for development of heritage sites. The Sun Temple from Odisha was identified one of them but the funds allocated in 2021-22 budget is Rs 3 lakhs overall which won’t cater to the development of these destinations.

The Federation of Associations in Indian Tourism & Hospitality (FAITH) showed some disappointment with the union budget 2021-22 as they didn’t receive any direct benefit.  They were looking forward for immediate assistance for the revival of this sector. Umbrella schemes like Champion Service sectors won’t be that effective to revive this sector. Direct benefit transfer would help provide support for short term. Countries like Thailand and Vanuatu have been providing financial support either directly or indirectly through soft loans and guarantees.

The employment rate of India was very low prior to the Covid-19 and now it is worse. With the second wave hitting India badly, the tourism industry has completely been paralyzed. Tourism has huge potential to generate employability in future. An intervention of technology will be crucial for this industry to grow. Confederation of Hospitality Technology and Tourism Industry (CHATT) formation can be a key driver to empower the voices of small operators among the travel and hospitality tech players.

Diversifying and shifting to sustainable models with the help of technology will help in recovery process. Few places in other countries like the southern Italian island of Sicily Italy trying improve international tourism through various schemes like paying half of visitors’ flight costs or Southeast Mexico is providing two free nights of accommodation for every two nights paid.

The government needs to promote tourism at international level to improve global outreach. Hopefully the center comes up with robust stimulus package which would directly benefit this sector for short term and also long-term sustainable plans.

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