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Tourism earns India more than the mining sector despite severely underperforming

A study estimates that tourism contributes almost as much to India's GDP as the IT-BPO sector. But India still only gets one-fourth the visitors that Thailand does.

India might not have much to write home about when it comes to tourist arrivals when compared to the rest of the world, but the industry is nevertheless tremendously important for the country. Despite its size and the wealth of sites to visit, India counted as only the 38th-most visited nation according the United Nations. Despite this, data from the Ministry of Tourism suggests that the sector has a significant impact on the country’s economy.

According to estimates prepared by the National Council for Applied Economic Research, tourism contributes as much as 6.77% to India’s total Gross Domestic Product through direct and indirect impact. To put this in context, this is nearly as much as India’s much touted Information Technology-Business Process Outsourcing industry, which contributes around 7.5% to the economy according to industry body NASSCOM.

Even if you discount the indirect impact, the numbers are impressive. The NCAER study estimated a direct impact of 3.8% towards the overall GDP, as compared to just 2% for India’s mining sector, according to industry body FICCI.

The sector is no slacker when it comes to employment either, according to the study, entitled the Tourism Satellite Account. “In terms of employment, this TSA showed that direct share of employment in tourism service industries is 4.4% and if indirect share is also included, this goes up to 10.2%,” the study reported. “This implies almost every 4th to 5th person employed in non-agricultural activities is directly or indirectly engaged in tourism activities.”

But simply because tourism is having a big impact on the economy shouldn’t be a reason to rejoice. The tourism ministry’s data also shows another, much more problematic trend. Although foreign tourist arrivals in India have continued to grow for the last few years, reaching nearly 6.9 million people in 2013, the relative growth has dipped sharply.

From 26% in 2004 to just 5.9% in 2013, growth of foreign tourist arrivals is a serious cause of concern. Although some of this is due to an international slowdown in tourism in the aftermath of the economic crisis of 2008, which meant India actually received 2.2% fewer tourists in 2009 as compared to the year before, there are plenty of homegrown factors to blame for the plateauing.

Visa and paperwork problems as well as inadequate infrastructure are among the most serious problems that foreigners often complain about, while concerns about safety have risen in the last few years.

This is made evident by a comparison with a few other smaller nations that receive far more tourists than India does. Thailand, for example, got four times the number of visitors in 2013 that India did — a clear suggestion that even in a bad economy, India’s tourism sector is still badly underperforming.

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What to look for when buying your first car in India

Hint: It doesn’t have to be a small car.

When it comes to buying their first car, more Indians are making unconventional choices. Indian car buyers in 2016 are looking for an automobile that is a symbol of their aspirations and sets them apart from the herd. Here are a few things you should consider when buying your first car:

Look beyond small cars

According to the JD Power India Escaped Study (2015), the percentage of new-vehicle shoppers who considered a small car reduced by 20% over three years—from 65% to 45%. Buyers are now looking at bigger, affordable cars and luckily for them, there are more choices available. Known as compact sedans, these cars offer the features of a sedan, are larger than hatchbacks and contain a boot. These sedans offer the comfort and features that once only belonged to expensive luxury cars but at a price that’s within the reach of a first-time car buyer.

Design and styling is important but don’t forget utility.

It’s a good idea to have a car that has been designed over the past three years and doesn’t look outdated. Features like alloy wheels and dual beam headlamps add to the style quotient of your vehicle so consider those. Additionally, look for a car with a sturdy build quality since Indian urban conditions may not always be kind to your car and may furnish it with scrapes and dents along the way.

Image Credit: Volkswagen
Image Credit: Volkswagen

Does it test-drive well?

In 2014, 35% of new-vehicle buyers researched vehicles when they were buying but by 2015, this number had risen to nearly 41% according to the JD Power study. While the internet is the primary source of research in India, the best source of information about a car is always a test drive. Listen to the sales person and read all online reviews, but test every feature to your satisfaction.

Where do you plan to drive?

Look for a car that’s spacious and comfortable while being easy to drive or park on our crowded city roads. Compact sedans are perfectly suited for Indian driving conditions. Some of them come with parking assistance and rear view cameras, rain sensors and front fog lights with static cornering that are excellent driving aids. If you plan to use the car for long drives, compact sedans that provide cruise control, a tilt and telescopic adjustable steering wheel and a front centre armrest would be perfect. On road trips with family members who usually pack more than necessary, extra elbow room inside and good boot-space is a blessing.

Is the model about to be discontinued?

Never buy a model that is going to be discontinued because it could result in difficulty finding spare parts. Buying an old model will also affect your resale value later. In 2015, according to the same report, 10% of shoppers considered newly launched car models as against 7% in 2013—a strong indication that newer models are being preferred to old ones.

Diesel or petrol?

Diesel and petrol cars have different advantages, and it’s best to take a decision based on the distance you plan to drive on a regular basis. While petrol cars are usually priced lower and are more cost effective when it comes to service and maintenance, diesel cars typically have better mileage due to higher efficiency and provide a smoother drive due to higher torque. Additionally, diesel is the cheaper fuel. So it makes more economic sense to buy a diesel car if you are driving long distances every day.

Most importantly, safety always comes first.

Look for a car that is built sturdy and pays extra attention to safety features like Anti-lock Braking Systems (ABS), side impact bars and dual front airbags. Safety is also a function of the design and features such as a galvanized steel body add to the strength of the build. It’s important to remember not to make trade-offs on safety for less important features when choosing variants.

Buying your first car is an important milestone in life. And the new Volkswagen Ameo has been designed with several first-in-segment features to cater to all the needs of a first-time car buyer in India. Its bold design and elegant styling along with state-of-the-art features like cruise control, reverse parking camera and sensors, and intelligent rain sensors set it apart from other cars in its class. Its safety features are also a notch above, with dual front airbags that are standard in every variant and side impact bars. A sturdy galvanized steel body and laser welded roof cocoon its passengers from harm, and its modern ABS, that is also standard in all variants, prevents the wheels from locking when you brake hard. A six-year perforation warranty and a three-year paint warranty ensure that the car body is protected from scratches and dents. The Ameo comes in both petrol and diesel variants. Check out all the features of the Ameo here. Also hear the experience of two first time car buyers in the video below.


This article was produced by the Scroll marketing team on behalf of Volkswagen and not by the Scroll editorial team.

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