1. Tourism plays a significant role in India's economy, contributing 6.3% to GDP and supporting over 37 million jobs. International tourist arrivals have grown from 2.37 million in 1997 to over 8 million in 2015. 2. While tourism benefits the economy through foreign exchange earnings, employment, and income generation, it also poses challenges like environmental degradation and loss of cultural identity if not properly managed. 3. Strategies to maximize tourism's economic impact include improving infrastructure, supporting local businesses and artisans, developing tourism in economically backward regions, and diversifying away from mass beach tourism. Proper planning is needed to ensure tourism brings benefits while minimizing negative consequences.

1. The Role of Tourism In Indian Economy
Nitesh Kumar Mishra
M.com (Business Management 2016)
Dayanand College, Ajmer
An Overview
Tourism is a major social phenomenon of modern society. Tourism is now one of the
world’s largest industries and one of its fastest growing economic sectors. Tourism is the
activity of travelling to a place for pleasure and a tourist is a person who is supposed to leave
his/her hometown (permanent place) on temporary, basis for the purpose of seeking new
experiences, having fun & entertaining, doing sports, seeing cultural & historical places
(attractives) etc. On the condition that he/she should stay no less than 1 day and no longer than 12
months, make use of a tourist facility for accommodation and spend his/her own Money through
their holiday. Tourism helps the visitors to get acquainted with the culture, customs and
conventions, language and mode of living of the local people. Tourism thus liberalizes their
mind and helps the people to strengthen the bonds of friendship, international understanding
and co-operation.
Tourism can be :-
(i) International Tourism:
An international tourist crosses the boundaries of many countries, uses different currencies,
1
faces different languages and meets different types of people. Usually international tourism
involves longer distances although crossing small countries or travelling in the
neighbourhood of international borders may involve short distances.
(ii) Domestic Tourism:
It is concerned with travelling within the country. It does not need a passport and visa or
conversion of one currency into another. Domestic tourism has greater scope in countries of
large dimensions such as India as compared to smaller countries. From a geographical
viewpoint, domestic tourism may range from local excursion, regional trips to national level
travels.
1. M.com (Business Administration)
2. MBA(First Year) Vardhman Mahaveer Open University

2. Role Of Tourism In Economy : For many countries tourism is seen as a main instrument for
regional development, as it stimulates new economic activities. Tourism as an industry is the
largest in terms of revenue generation as well as an employer in the world. It plays a very
significant role in accelerating the pace of economic development by generating employment
opportunities, enhancing social progress and strengthening communities, encouraging the
protection of environment and contributing actively to conservation. Tourism may have a
positive economic impact on the balance of payments, on employment, on gross income and
production, but it may also have negative effects, particularly on the environment. Unplanned
and uncontrolled tourism growth can result in such a deterioration of the environment that
tourist growth can be compromised.
Tourism In India
Tourism in India has a strong relevance to economic development, cultural growth and
national integration. As mentioned earlier, India is a vast country of great beauty and
diversity and her tourist potential is equally vast. With her rich cultural heritage as superbly
manifest in many of the architectural wonders (palaces, temples, mosques, forts, etc), caves
and prehistoric wall paintings, her widely varied topography ranging from the monotonous
plains to the loftiest mountains of the world, her large climatic variations ranging from some
of the wettest and the driest as well as from the hottest and the coldest parts of the world,
beautiful long beaches on the sea coast, vast stretches of sands, gregarious tropical forests and
above all, the great variety of the life-style, India offers an unending choice for the tourist.
Tourism is the largest service industry in India, with a contribution of 6.3% to the national
GDP in 2015 and supported 37.315 million jobs, 8.78% of its total employment in India.
India witnesses more than 5 million annual foreign annual tourist arrivals and 562 million
domestic tourism visit.
(a) Currently there are more than 130 preferred tourist destinations in the world.
(b) The Taj Mahal alone as one of the Seven Wonders of the World invites over 3 million
tourists every year.
Foreign tourist arrivals by year
Year Number
(Millions)
% Change
1997 2.37 3.8
1998 2.36 -0.7
1999 2.48 5.2
2000 2.65 6.7
2001 2.54 -4.2
2002 2.38 -6.0
2003 2.73 14.3
2004 3.46 26.8
2005 3.92 13.3
2006 4.45 13.5
2007 5.08 14.3
2008 5.28 4.0
2009 5.17 -2.2
2010 5.78 11.8

3. 2011 6.31 9.2
2012 6.58 4.3
2013 6.97 5.9
2014 7.68 10.2
2015 8.03 4.5
Obstacles faced by India in tourism :
Our people, who do not have empathy for tourists . They charge exorbitantly for all
merchandise and memoirs. Our people, who do not understand importance of maintaining
historical monuments in good condition. They litter and they inscribe everywhere at will.
Lack of facilities like guides, good hotels (not costly ones), hygienic food and water,
information boards etc. Lack of publicity for good tourist destinations among the travellers
and also lack of good education to the locals on receiving guests and hosting them. also, lack
of publicity on cuisines and cultures.
How can we improve:
Create awareness of the places of importance, its history or ecological or cultural
sensitivity etc among locals as well as tourists. Some kinds of festivals / activities like food
festivals, cultural fests, exhibitions etc will help in this front.
Train the locals on how to behave with the visitors and how to keep away from places of
tourist importance. Provide basic amenities like food, water and shelter. This should be
affordable to all and shall be hygienic. Provide good information on the places. Conduct
international cultural conventions etc.
Objectives of study :
1. Explain the three major economic impacts of tourism on destination areas and how these
impacts are measured :-
(i) Increasing foreign earnings.
(ii) Increasing income
(iii) Increasing employment.
2. Describe the strategies to maximize the economic impact of tourism and how tourism’s role
in economic development can be analyzed.
Research Methodology :
Tourism has traditionally acted as major source of income within many developing
countries. The huge amounts of investment put into this sector points to the important role it
plays in the growth of the economy and the development of economic potential. The primary
data has been collected from various journals and articles and the secondary data has been
collected from Wikipedia and Ministry of Tourism website.
Economic importance of tourism in India :-
The economic importance of tourism in India can by no means be underestimated. It benefits
the people living in and around tourist centres financially. Fortunately for India, the Ministry of

4. Tourism of the central Government and the departments of Tourism of the different State
Governments are jointly trying to make all possible attempts to attract the tourists to this country.
The Government of India understands the importance of promoting Tourism. Tourist hotels, tourist
lodges, dormitories and rest houses are made and maintained by various state Governments to look to
the comforts of the tourists. The money spent by the Foreign tourists at hotels and other places helps
the local economy.
The Natural Tourism Board and the Tourism Finance Corporation of India have been working in full
swing to bring about the improvement of tourist centres in India. This will immensely economic
benefits to the the regional people.
IMPACT OF TOURISM ON ECONOMY:
Tourism industry in India has several positive and negative impacts on the economy and
society. These impacts are highlighted below.
POSITIVE IMPACTS:
1. Generating Income and Employment: Tourism in India has emerged as an instrument
of income and employment generation, poverty alleviation and sustainable human
development. It contributes 6.77% to the national GDP and 8.78% of the total
employment in India. Almost 20 million people are now working in the India’s
tourism industry.
2. Preservation of National Heritage and Environment: Tourism helps preserve several places
which are of historical importance by declaring them as heritage sites.
3. Developing Infrastructure: Tourism tends to encourage the development of multiple-use of
infrastructure that benefits the host community, including various means of transports, health
care facilities, and sports centers.
4. Promoting Peace and Stability: Tourism industry can also help promote peace and stability in
developing country like India by providing jobs, generating income & diversifying the
economy.
5. The Multiplier Effect: The flow of money generated by tourist spending multiplies as it
passes through various sections of the economy.
6. Regional Development: The under developed regions of the country can greatly benefit from
tourism development. Many of the economically backward regions contain areas of high
scenic beauty and cultural attractions.
7. Economic Value Of Cultural Resources: Tourism provides monetary incentives for the
development of many local crafts and culture, thus it has an effect on the income of the local
artisans and artists.
8. Source of Foreign Exchange Earnings: Tourism is an important source of foreign exchange
earnings in India. This has favourable impact on the balance of payment of the country. The
tourism industry in India generated about US$100 billion in 2008 and that is expected to
increase to US$275.5 billion by 2018 at a 9.4% annual growth rate.
Foreign exchange earnings by year

5. The Foreign Exchange Earnings (FEEs) from tourism in the country have grown by 23.6% year-on-year during
the month of May 2015. FEEs during the month of May 2015 were Rs 8,877 crore as compared to Rs 7,184
crore in May 2014, according to tourism ministry data
FEEs from tourism during the period of January- May 2015 were Rs 51,351 crore as compared to Rs 48,302
crore during the same period last year.
9. Promotion Of International Understanding : Tourism can also become an effective
tool to develop a better understanding and interaction amongst people of different
countries.
NEGATIVE IMPACTS:
1. Undesirable Social and Cultural Change: Tourism sometimes led to the destruction of the
social fabric of a community. The more tourists coming into a place, the more the perceived
risk of that place losing its identity.
2. Increase Tension and Hostility: Tourism can increase tension, hostility, and suspicion
between the tourists and the local communities when there is no respect and understanding for
each other’s culture and way of life.
3. Creating a Sense of Antipathy: Tourism brought little benefit to the local community. In
mostall- inclusive package tours more than 80% of travelers’ fees go to the airlines, hotels
and other international companies, not to local businessmen and workers.
4. Adverse Effects on Environment and Ecology: One of the most important adverse effects of
tourism on the environment is increased pressure on the carrying capacity of the ecosystem in
each tourist locality.
5. Import Leakage: This commonly occurs when tourists demand standards of equipment, food,
drinks, and other products that the host country cannot supply, specially developing
countries.
Year Amount (US $Millions) %
Change
Amount (₹
Crores)
% Change
1997 2889 2.0 10511 4.6
1998 2948 2.0 12150 15.6
1999 3009 2.1 12951 6.6
2000 3460 15 15626 20.7
2001 3198 -7.6 15083 -3.5
2002 3103 -3.0 15064 -0.1
2003 4463 43.8 20729 37.6
2004 6170 38.2 27944 34.8
2005 7493 21.4 33123 18.5
2006 8634 15.2 39025 17.8
2007 10729 24.3 44360 13.7
2008 11832 10.3 51294 15.6
2009 11136 -5.9 53700 4.7
2010 14193 27.5 64889 20.8
2011 16564 16.7 77591 19.6
2012 17737 7.1 94487 21.8
2013 18445 4.0 107671 14
2014 20236 9.7 123320 14.5
2015 21071 4.1 135193 9.6

6. 6. Seasonal Character Of Job: The job opportunities related to tourism industry are seasonal in
nature as they are available only during the tourist season.
7. Increase In Prices: Increasing demand for basic services and goods from tourists will often
cause price hikes that negatively affect local residents whose income does not increase
proportionately.
Strategies which can maximize the Economic Effect of Tourism
1. Improve access to handicrafts by auditing existing local products, training producers,
supporting enterprise formation and expansion; supporting retailing through a craft
market and cooperative outlet.
2. Support local tourism enterprise by:
3. encouraging hotels to audit and link with local suppliers;
4. supporting production communities if feasible;
5. strengthening links between handicraft sellers and hotels;
6. Strengthen informal tourism service provision by:
7. supporting guide association, upgrading quality of cheaper hotels and food outlets,
providing cultural events and services in town;
8. Replace begging with a system for philanthropy, combined with support to former-
beggars and skills training
9. Dealing with Multinational Tourism Companies Hotel and restaurant chains, travel
agencies and tour operators
Criticized for operating to benefit their own profitability at the expense of destination
areas May engage in policies that run counter to national tourism plans
Limited opportunities for locals to take management positions
Strategies to boost total tourist expenditure and boost the existing financial flows
include:
Restoring profitability of accommodation sector
Balancing demand and supply
Continuing diversification out of beach package tourism into higher spending and
less-enslaved tourism.
Conclusion
Tourism industry in India is growing and it has vast potential for generating
employment and earning large amount of foreign exchange besides giving a fillip to the
country’s overall economic and social development. But much more remains to be done. Eco-
tourism needs to be promoted so that tourism in India helps in preserving and sustaining the
diversity of the India's natural and cultural environments. Tourism in India should be
developed in such a way that it accommodates and entertains visitors in a way that is
minimally intrusive or destructive to the environment and sustains & supports the native
cultures in the locations it is operating in. Moreover, since tourism is a multi-dimensional
activity, and basically a service industry, it would be necessary that all wings of the Central
and State governments, private sector and voluntary organisations become active partners in

7. the endeavour to attain sustainable growth in tourism if India is to become a world player in
the tourism industry.
References :
1. Various Journals and Newspapers
2. Website of Indian Ministry Of Tourism.
3. Data collection : www.en.wikipedia.orgs
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