Tag Archives: tourism regulation

Indian Tourism Sector: Urgent Need for Competition Policies and Regulatory Framework

This article has just been published in Geography and You, Volume 19, Issue 99, Nov-Dec 2016, IRIS publication.

“Climate change as well as poverty alleviation will remain central issues for the world community. Tourism is an important element in both. Governments and the private sector must place increased importance on these factors in tourism development strategies and in climate and poverty strategies. They are interdependent and must be dealt with in a holistic fashion.” – (Francesco Frangialli, UNWTO Secretary-General, Ministers’ Summit on Tourism and Climate Change in London, United Kingdom, 13 November 2007)

Current Situation in India

Unregulated tourism activities have changed the landscape of large number of tourism destinations in India beyond repair. And, perhaps, we cannot blame only the tourism stakeholders, especially, the business owners for this. Their objective in most cases remained revenue maximization and they tried to reach the same. In the process, the ecological balance of the areas is getting destroyed to a great extent leading towards environmental degradation beyond a critical limit. This situation has arisen to a large extent due to absence of regulatory framework relating to tourism industry. In fact, there is hardly any regulatory framework in place to promote of sustainable tourism as an organized sector. This regulatory framework should make sure the sustainability in terms of environment, economy and culture.

“Tourism in the Third World, as it practised today, does not benefit the majority of the people. Instead it exploits them, pollutes the environment, destroys the ecosystem, bastardises the culture, robs people of their traditional values and ways of life and subjugates women and children in the abject slavery of prostitution. In other words, it epitomises the present unjust world economic order where the few who control wealth and power dictate the terms. As such, tourism is little different from colonialism” (Srisang, 1992). To corroborate this view, the following are the ill effects of unregulated and unplanned tourism.

  • Degradation of heritage sites
  • Commodification of the sacred resources
  • Create a market for prostitution and drugs
  • Reduce biological diversity and environmental degradation
  • Destroy habitats for wildlife
  • Pollute lakes and other water bodies
  • Overuse valuable fresh water resources
  • Contribute significantly to global warming
  • Leads to loss of scenic beauty and as a result loss of tourist attraction in long term

Promoting Sustainable Tourism

To avoid this, the country must promote Sustainable Tourism practices. Butler (1993) defined sustainable tourism as “which is developed and maintained in an area (community, environment) in such a manner and at such a scale that it remains viable over an indefinite period and does not degrade or alter the environment (human or physical) in which it exists to such a degree that it prohibits the successful development and wellbeing of other activities and processes”. Hence sustainable tourism should fulfil the following:

  • Tourism industry must ensure that tourist visits will be maintained and tourism resources will retain their attractiveness indefinitely. The carrying capacity of the area needs to be kept in mind.
  • There must be no (or only minimal) adverse environmental, social and cultural impacts.
  • All these must be achieved through maintaining the principles of sustainable development.

This is crucial keeping in mind importance of tourism industry in the country. Tourism is gaining importance in India over the years in all respects. According to Ministry of Tourism, the sector contributes to 6.88% to India’s income (GDP) in the year 2012-13. In the same year, more than 12% of the country’s employment is engaged in tourism sector. Keeping these in mind, the Draft Tourism Policy document mentioned the following as key mission for the sector.

  1. To achieve a level of 1% share of the international tourists arrivals by 2016-17
  2. 1450 million domestic tourists by 2016-17
  3. Promoting sustainable tourism as priority
  4. Enhancing competitiveness of Indian tourism industry
  5. Creating world class tourism infrastructure
  6. Ensuring greater visibility for tourist facilities
  7. Augmenting human resource base in the sectorIf we look at the current scenario of tourism development, it is more in a fluidic state rather than a concrete planning. The latest Central Government policy still in practice is of 2002. A new policy was drafted in 2015. It was circulated as Draft Tourism Policy 2015 in Tourism Ministry’s official portal. However, after a certain point of time it has disappeared from the portal. There are several boards constituted to develop or promote tourism in the country, especially to attract foreign tourists, but any regulatory authority is yet to be constituted. Another key problem element is tourism is a state as well as Central subject. Apart from Central Government, various State Governments have their own tourism policies with their own perspective to promote tourism in the states. If one carefully looks at the state level policies, many of them are quite contradictory to sustainable tourism development paradigm.
  8. As it is told at the beginning, it is not easy to prepare a regulatory framework for tourism industry. The reason being tourism activities are combination of large number of sectors that cuts across all different domains of activities of common mass. As contrast to other economic sectors, direct stakeholders for tourism activities are host communities also apart from the consumers and producers. Unlike other sectors or industries, tourism directly affects entire community of a region positively as well as adversely, depending on the nature of activities. Even from governance perspective, tourism activities cut across many different departments and hence fluidic in nature. That is one of the prime reason why even being top revenue earner as well as employment generating sector, it is one of the most neglected sectors among all economic activities from policy making perspective

As can be understood easily from the above situation, there is hardly any policy that talks of regulatory and competition explicitly regarding tourism sector. Perhaps the only significant paper available on tourism legislation in India was prepared by the Indian Institute of Tourism and Travel management (IITTM) sometime in 1990s. The focus was to identify the legislative part of the tourism sector. The complexities in framing regulatory process regarding tourism industry can be well understood. A partial list of 31 legislative acts encompasses tourism industry is presented in Appendix.

However, at the Central or the state level, several schemes are available to promote tourism activities that enhances competition. But, there is no document that talks of a regulatory aspects which is extremely crucial for tourism sector. Unregulated tourism activities have severe adverse impact on welfare of a larger section of the host communities from biodiversity, economic and cultural point of view, while it increases welfare of the tourists (consumers) and direct service providers (sellers/producers). Therefore, a balanced competition policy with appropriate regulatory measures are needed immediately to promote tourism activities that can be win-win for every stakeholder.

Requirements within a Competition and Regulatory Framework

  1. Identifying key industries/sectors that are directly linked to tourism activities and less with day to day life of common man, for instance:
    • Hospitality sector
    • Tour operators
    • Other tourism service providers etc.
  1. To look into issues that are pro- or anti-competitive
    • Policy distortions/conflicts affecting competition (national and/or state level policies)
    • Prevailing anti-competitive practices in the tourism sector
    • Possible impacts of such policies and practices on welfare issues
      • For tourists (consumers)
      • Service providers (producers)
      • Host community
  1. Suggested measures towards regulatory and competition framework on selected sectors that are directly linked to tourism activities exclusively

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Appendix

List of Legislative Acts that covers tourism industry

As adopted from an unpublished research paper of Indian Institute of Tourism and Travel management (IITTM)

  1. The essential commodities act, 1955
  2. Code of criminal procedure, 1973,
  3. The airport authority of India act, 1994,
  4. The child labour (prohibition and regulation) act, 1986,
  5. The motor vehicle act, 1988,
  6. Foreign exchange regulation act, 1973,
  7. Consumer protection act, 1986,
  8. The environment (protection) act, 1986,
  9. The prevention of cruelty to animals act, 1960,
  10. The public liability insurance act, 1991,
  11. The railways act, 1989,
  12. The sarais act, 1867,
  13. The immoral traffic (prevention) act, 1956,
  14. The employers liability act, 1938,
  15. The passport act, 1967,
  16. The wild life (protection) act, 1972,
  17. The prevention of food adulteration act, 1954,
  18. The monopolies and restrictive trade practices act, 1969,
  19. Forest conservation act, 1980,
  20. The road transport corporation act, 1950,
  21. The central excise and sale act, 1950,
  22. The Indian partnership act, 1932,
  23. The urban land ceiling act, 1976,
  24. The industries (development and regulation) act, 1951,
  25. The explosives act, 1884,
  26. The Indian penal code, 1860,
  27. The water (prevention and control of pollution) act, 1974 & the air (prevention) and control of pollution act, 1981,
  28. The Indian contract act, 1872,
  29. Development authority act,
  30. Municipal act,
  31. Ancient monument (site and remains) act, 1951.

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References:

Butler, R., 1993. ‘Tourism – an evolutionary perspective’, in Nelson, J., Butler, R., and Wall, G., (eds) Tourism and Sustainable Development: Monitoring, Planning and Managing, Department of Geography, University of Waterloo, Ontario.

Srisang K. (1992) ‘Third World Tourism: The New Colonialism”, Focus, Volume 4.

Ministry of Tourism (2015): “India Tourism Statistics 2015 At A Glance”, Government of India.

UNWTO (2008): “Climate Change and Tourism – Responding to Global Challenges”, World Tourism Organization, Madrid, Spain.

WTTC (2013): “Travel and Tourism Economic Impact – India”, World Travel and Tourism Council.

Ramachandra T. V. and Shwetmala (2013): “Decentralised Carbon Footprint Analysis for Opting Climate Change Mitigation Strategies in India”, Research Paper Indian Institute of Sciences, Bangalore.

Ministry of Tourism (2011): “Sustainable Tourism Criteria for India”, Government of India.