India’s tourism sector faces challenges in fund utilisation. The Parliamentary Standing Committee has expressed concern over chronic underutilisation by the Union Tourism Ministry. In the fiscal year 2023-24, only 33.4% of the allocated ₹2,400 crore was used. This trend continued into 2024-25, with merely ₹396.82 crore of ₹2,479.62 crore utilised. Such statistics reveal systemic inefficiencies that hinder the growth of India’s tourism potential.
Current Context
The underutilisation of funds is not a new issue. The Ministry of Tourism has struggled with administrative bottlenecks and procedural delays. The Standing Committee found the Ministry’s explanations inadequate. It called for immediate reforms to address entrenched operational weaknesses. The tourism sector is critical to India’s economy, and these inefficiencies represent missed opportunities for growth.
Digital Initiatives
The committee has proposed implementing an Integrated Digital Project Management System (IDPMS). This system aims to streamline project management from proposal submission to fund disbursal. It is modelled after successful initiatives in Tamil Nadu. The IDPMS would feature real-time dashboards for transparency. Stakeholders, including Ministry officials and State tourism departments, would have access to project statuses and fund utilisation metrics.
Incentives for States
To improve fund utilisation, the committee suggested developing a Tourism Implementation Rating System (TIRS). This system would evaluate and rank States based on their efficiency in implementing tourism projects. States demonstrating superior performance would receive incentives. These could include priority funding for new projects and relaxed procedural requirements. The aim is to encourage healthy competition among States.
Recommendations for Reform
The Standing Committee’s report calls for comprehensive structural reforms. These reforms should address the root causes of underutilisation. The focus should be on enhancing coordination with implementing agencies. Additionally, there is a need for better tracking of visitor footfalls and project outcomes. The proposed reforms aim to create a more efficient and transparent tourism funding framework.
Impact on Tourism Growth
The inefficiencies in fund utilisation have broader implications for India’s tourism growth. With a projected market growth to $34.1 billion by 2029, addressing these issues is crucial. Improved fund utilisation can unlock economic potential. It can enhance infrastructure, promote cultural heritage, and boost local economies.
Future Prospects
If reforms are successfully implemented, the tourism sector could see substantial benefits. Enhanced efficiency in fund utilisation would likely lead to increased visitor numbers and revenue generation. The success of the proposed IDPMS and TIRS will be critical in shaping the future of India’s tourism landscape.
Questions for UPSC:
- Discuss the impact of underfunding on the growth of India’s tourism sector.
- Critically examine the effectiveness of digital project management systems in improving governmental fund utilisation.
- Explain the significance of implementing a Tourism Implementation Rating System for State tourism departments.
- With suitable examples, discuss the role of tourism in economic development and cultural preservation in India.
Answer Hints:
1. Discuss the impact of underfunding on the growth of India’s tourism sector.
- Underfunding leads to inadequate infrastructure development, limiting tourist access and experiences.
- It hampers promotional activities, reducing awareness and interest in India’s tourist destinations.
- Chronic underutilisation reflects systemic inefficiencies that deter private investment in the tourism sector.
- Limited funds restrict the ability to enhance services and amenities, affecting visitor satisfaction.
- Ultimately, underfunding stifles job creation and economic growth in regions reliant on tourism.
2. Critically examine the effectiveness of digital project management systems in improving governmental fund utilisation.
- Digital systems streamline project management, reducing administrative bottlenecks and procedural delays.
- Real-time dashboards enhance transparency and accountability among stakeholders, promoting timely actions.
- Centralised data collection aids in tracking fund utilisation and project outcomes effectively.
- However, successful implementation requires training and adaptation by governmental staff and agencies.
- Challenges include potential resistance to change and the need for robust IT infrastructure.
3. Explain the significance of implementing a Tourism Implementation Rating System for State tourism departments.
- The TIRS promotes competition among states, encouraging efficient fund utilisation and project execution.
- It provides objective metrics for evaluating state performance, guiding resource allocation decisions.
- High-performing states receive incentives, encouraging a culture of excellence and accountability.
- It helps identify best practices that can be shared across states to improve overall tourism effectiveness.
- Ultimately, TIRS can enhance the visibility and attractiveness of states as tourist destinations.
4. With suitable examples, discuss the role of tourism in economic development and cultural preservation in India.
- Tourism generates employment opportunities, as seen in states like Rajasthan with its heritage tourism.
- It contributes to GDP growth, with sectors like hospitality and travel benefiting from increased visitor numbers.
- Cultural tourism initiatives, such as promoting local crafts and festivals, help preserve traditional practices.
- Regions like Kerala leverage eco-tourism to protect natural resources while boosting local economies.
- Tourism encourages cross-cultural exchanges, enhancing global understanding and appreciation of India’s diversity.
