India’s domestic tourism is growing rapidly. The homestay market is expanding at an 11% compound annual growth rate from 2024 to 2031. This growth has exposed regulatory challenges. The NITI Aayog report ‘Rethinking Homestays – Navigating Policy Pathways’ marks the need for simplified and uniform regulations to support this sector.
Current Regulatory Landscape
Homestay regulations vary widely across states. For example, Uttarakhand, Uttar Pradesh, and Kerala require five to six steps for registration. Goa has only three steps. Certificate validity also differs – Uttarakhand issues two-year certificates, Kerala and Uttar Pradesh three years, while Goa varies from one to five years. This inconsistency complicates compliance for operators.
Challenges Faced by Homestay Operators
Operators face a complex and lengthy registration process. They must visit multiple offices and submit many documents. Approval can take from two to six months. This delays operations and deters new entrants. Awareness about fiscal incentives is low. A survey found 70% of operators unaware or unable to access available benefits.
Recommendations for Policy Reform
NITI Aayog suggests adopting best practices from various states to create a comprehensive model policy. Simplifying registration and compliance is key. Proposals include a centralised digital portal for registration, renewals, and compliance tracking. This portal would help operators submit documents online, track applications, and receive updates and reminders.
Promoting Sustainable Tourism Growth
The report recommends tier-based incentive schemes. Tier-1 areas with immediate tourism potential get priority support. Tier-2 areas with long-term potential receive phased incentives and marketing aid. State governments should launch targeted campaigns to show unique local offerings. This would encourage wider participation and sustainable growth.
Economic Impact of Domestic Tourism
Domestic tourist spending rose 28% from 2019 to Rs 16 lakh crore in 2023-24. It is expected to reach Rs 28.7 lakh crore by 2033-34. International tourist spending also surpassed pre-pandemic levels, reaching Rs 2.85 lakh crore in 2023-24 and projected to grow to Rs 4.07 lakh crore by 2033-34. The homestay sector is contributor to this growth.
Digitalisation and Future Prospects
Digital tools can reduce bureaucratic delays and improve transparency. A centralised portal would ease compliance and encourage more operators to enter the market. This will help India maintain its position as a top homestay destination globally. The sector’s growth aligns with the government’s vision of boosting rural and local tourism.
Questions for UPSC:
- Point out the challenges faced by the homestay sector in India and suggest how digitalisation can address these issues.
- Critically analyse the impact of inconsistent state-level regulations on the growth of domestic tourism in India with suitable examples.
- Estimate the role of fiscal incentives in promoting sustainable tourism and how awareness among stakeholders can be improved.
- Underline the significance of tier-based incentive schemes in regional tourism development and how they can be implemented effectively.
