Destination India

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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Some of the worst decisions made in history

From the boardroom to the battlefield, bad decisions have been a recipe for disaster

On New Year’s Day, 1962, Dick Rowe, the official talent scout for Decca Records, went to office, little realising that this was to become one of the most notorious days in music history. He and producer Mike Smith had to audition bands and decide if any were good enough to be signed on to the record label. At 11:00 am, either Rowe or Smith, history is not sure who, listened a group of 4 boys who had driven for over 10 hours through a snowstorm from Liverpool, play 15 songs. After a long day spent listening to other bands, the Rowe-Smith duo signed on a local group that would be more cost effective. The band they rejected went on to become one of the greatest acts in musical history – The Beatles. However, in 1962, they were allegedly dismissed with the statement “Guitar groups are on the way out”.

Source: Wikimedia Commons
Source: Wikimedia Commons

Decca’s decision is a classic example of deciding based on biases and poor information. History is full of examples of poor decisions that have had far reaching and often disastrous consequences.

In the world of business, where decisions are usually made after much analysis, bad decisions have wiped out successful giants. Take the example of Kodak – a company that made a devastating wrong decision despite overwhelming evidence to the contrary. Everyone knows that Kodak couldn’t survive as digital photography replaced film. What is so ironic that Alanis Morissette could have sung about it, is that the digital camera was first invented by an engineer at Kodak as early as 1975. In 1981, an extensive study commissioned by Kodak showed that digital was likely to replace Kodak’s film camera business in about 10 years. Astonishingly, Kodak did not use this time to capitalise on their invention of digital cameras – rather they focused on making their film cameras even better. In 1996, they released a combined camera – the Advantix, which let users preview their shots digitally to decide which ones to print. Quite understandably, no one wanted to spend on printing when they could view, store and share photos digitally. The Advantix failed, but the company’s unwillingness to shift focus to digital technology continued. Kodak went from a 90% market share in US camera sales in 1976 to less than 10% in 2012, when it filed for bankruptcy. It sold off many of its biggest businesses and patents and is now a shell of its former self.

Source: Wikimedia Commons
Source: Wikimedia Commons

Few military blunders are as monumental as Napoleon’s decision to invade Russia. The military genius had conquered most of modern day Europe. However, Britain remained out of his grasp and so, he imposed a trade blockade against the island nation. But the Russia’s Czar Alexander I refused to comply due to its effect on Russian trade. To teach the Russians a lesson, Napolean assembled his Grand Armée – one of the largest forces to ever march on war. Estimates put it between 450,000 to 680,000 soldiers. Napoleon had been so successful because his army could live off the land i.e. forage and scavenge extensively to survive. This was successful in agriculture-rich and densely populated central Europe. The vast, barren lands of Russia were a different story altogether. The Russian army kept retreating further and further inland burning crops, cities and other resources in their wake to keep these from falling into French hands. A game of cat and mouse ensued with the French losing soldiers to disease, starvation and exhaustion. The first standoff between armies was the bloody Battle of Borodino which resulted in almost 70,000 casualties. Seven days later Napoleon marched into a Moscow that was a mere shell, burned and stripped of any supplies. No Russian delegation came to formally surrender. Faced with no provisions, diminished troops and a Russian force that refused to play by the rules, Napolean began the long retreat, back to France. His miseries hadn’t ended - his troops were attacked by fresh Russian forces and had to deal with the onset of an early winter. According to some, only 22,000 French troops made it back to France after the disastrous campaign.

Source: Wikimedia Commons
Source: Wikimedia Commons

When it comes to sports, few long time Indian cricket fans can remember the AustralAsia Cup final of 1986 without wincing. The stakes were extremely high – Pakistan had never won a major cricket tournament, the atmosphere at the Sharjah stadium was electric, the India-Pakistan rivalry at its height. Pakistan had one wicket in hand, with four runs required off one ball. And then the unthinkable happened – Chetan Sharma decided to bowl a Yorker. This is an extremely difficult ball to bowl, many of the best bowlers shy away from it especially in high pressure situations. A badly timed Yorker can morph into a full toss ball that can be easily played by the batsman. For Sharma who was then just 18 years old, this was an ambitious plan that went wrong. The ball emerged as a low full toss which Miandad smashed for a six, taking Pakistan to victory. Almost 30 years later, this ball is still the first thing Chetan Sharma is asked about when anyone meets him.

So, what leads to bad decisions? While these examples show the role of personal biases, inertia, imperfect information and overconfidence, bad advice can also lead to bad decisions. One of the worst things you can do when making an important decision is to make it on instinct or merely on someone’s suggestion, without arming yourself with the right information. That’s why Aegon Life puts the power in your hands, so you have all you need when choosing something as important as life insurance. The Aegon Life portal has enough information to help someone unfamiliar with insurance become an expert. So empower yourself with information today and avoid decisions based on bad advice. For more information on the iDecide campaign, see here.

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