TITLE Investment in Tourism Infrastructure: Igniting India’s Growth Engine

YEAR July, 2017

AUTHORS STRATEGIC GOVERNMENT ADVISORY (SGA), YES Global Institute, YES BANK

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FOREWORD India’s Travel & Tourism industry is the 7th largest in the world, contributing to nearly 9.6% of India’s GDP and further estimated to grow by 6.9% p.a. during 2017-27, to become the 4th largest globally. The industry is also a major generator of employment and livelihood in India – accounting for 9.3% of total employment in 2016 and expected to generate nearly 50 million jobs by 2027. Further, India has climbed 12 places to 40th rank globally in the World Economic Forum - Travel and Tourism Competitiveness Index 2017, with 55.3% increase in e-tourist visas and 19.5% growth in Foreign Tourist Arrivals in May 2017. I believe these are very positive developments, triggered by emergence of new tourism products and avenues, key policy initiatives by the Government such as extension of e-Visa to 161 countries, simplification of immigration and customs procedures and creation of Special Tourism Zones, amongst others. Innovative schemes such as PRASAD, HRIDAY and Swadesh Darshan are expected to lead next generation tourism infrastructure development through theme-based circuits and linkages between major tourist destinations. However, to unleash full potential of the sector and lead the next phase of accelerated growth, it is vital to ensure robust on-ground execution of these schemes and initiatives. The significant increase of over 15% in budget allocation for the Ministry of Tourism in FY18, must be accompanied by focused and sustained efforts towards fast-tracking development of world class tourism infrastructure. I am pleased to present this FICCI - YES BANK Knowledge Report ‘Investment in Tourism Infrastructure: Igniting India’s Growth Engine’ which highlights the phenomenal growth potential of the sector and provides key recommendations towards establishing India as a global leader in Travel & Tourism. I am confident that this publication will encourage productive dialogue amongst all stakeholders in the Travel & Tourism value- chain and contribute towards making Tourism a key driver of India’s growth story.

Rana Kapoor Managing Director & CEO Chairman

FOREWORD Tourism sector makes a significant impact on the economy of our country. World Travel and Tourism Council Report 2017 reveals that the total contribution of travel and tourism sector to the country’s GDP was almost ` 14,018.5 Billion, supporting around 40.73 Million jobs in 2016. Further, as per latest Travel and Tourism Competitiveness Index (TTCI) Global ranking published by World Economic Forum (WEF), India is one of the most improved nations retrospectively, gaining 12 places to reach the 40th position globally. Tourism industry thus, today has turned into a key driver of socio- economic progress paving the way for a more sustainable and inclusive future. The Union Government of India realizes the potential of tourism industry in India which is evident from the fact that the Ministry of Tourism has undertaken a slew of initiatives such as extending e-tourist Visas to 161 countries, releasing M-Visa, launch of marketing initiatives like Incredible India 2.0, Swach Paryatan Mobile app, 24*7 Multi-lingual Tourist Helpline among others that have fuelled impressive tourism growth. Going ahead, the challenge lies in creating world class infrastructure to significantly increase tourist arrivals and create a strong, unequivocal ‘Brand India’. The Government and Industry need to join hands to jointly create a policy landscape that can spur the growth momentum. I am pleased to present the FICCI - YES BANK Knowledge Report ‘Investment in Tourism Infrastructure: Igniting India’s Growth Engine’ which highlights the current tourism landscape, potential areas of development and key initiatives for India to rise on the global tourism map. Sincerely,

Dr. Jyotsna Suri Past President, FICCI Chairperson FICCI Tourism Committee and Chairperson & Managing Director - Lalit Suri Hospitality Group Investment in Tourism Infrastructure 8 Igniting India’s Growth Engine Table of Contents

Executive Summary 1 1. Travel & Tourism Outlook 15 1.1. Global Tourism Scenario 16 1.2. Indian Tourism Scenario 18 2. Key Government Initiatives to boost Tourism Infrastructure in India 23 2.1. Ministry of Tourism 24 2.2. Ministry of Civil Aviation 25 2.3. Ministry of Shipping 26 2.4. Ministry of Road Transport & Highways 28 2.5. Ministry of Railways 29 2.6. Ministry of Environment, Forest & Climate Change 31 2.7. Ministry of External Affairs 32 2.8. Ministry of Culture 32 3. Key Initiatives of leading States in promoting Tourism 35 3.1 Madhya Pradesh 36 3.2 Andhra Pradesh 42 3.3 Uttarakhand 45 3.4 Rajasthan 49 3.5 Odisha 54 3.6 Karnataka 57 3.7 Telangana 62 3.8 Maharashtra 65 3.9 Arunachal Pradesh 67 3.10 Himachal Pradesh 70 3.11 Gujarat 73 3.12 West Bengal 76 4. Way Forward - Unleashing Tourism Development 82 through Sustainable Infrastructure Development

Investment in Tourism Infrastructure Igniting India’s Growth Engine 9 Investment in Tourism Infrastructure 10 Igniting India’s Growth Engine Executive Summary

Investment in Tourism Infrastructure Igniting India’s Growth Engine 1 Executive Summary

Background

Globally, the Tourism industry has increasingly been recognized for its important contributions to economic growth and development as well as social, cultural, environmental, and heritage value, with significant contributions being witnessed in recent decades.

The United Nations has designated the year 2017 as the International Year of Sustainable Tourism for Development. While enhancing participation of communities and improving penetration of economic benefits to the last mile remain important considerations in developing sustainable tourism, tourism infrastructure will be the backbone for these inclusive models, and will be an important factor in areas like environmental standards and resource optimization.

Economic Impact (2016)

In 2016, the Tourism industry Tourism Investments accounted supported 9.3% of total for 5.7% of total investments in employment in India 2016

rd Total contribution of Tourism in India ranked 3 among 184 India accounted for 9.6% of the countries in terms of Tourism’s GDP in 2016 total contribution to GDP in 2016

Visitors export generated ` 1,529.3 Bn which is 5.4% of total exports in 2016

Source: WTTC – Travel & Tourism Economic Impact- India 2017

Investment in Tourism Infrastructure 2 Igniting India’s Growth Engine The report ‘Investment in Tourism Infrastructure: Igniting India’s Growth Engine’ focuses upon Global tourism perspective and India’s potential for further attracting investment in tourism industry followed by key initiatives taken by Union Government to promote Indian tourism industry. It aims to give a factual account of the potential of tourism infrastructure across key Indian States which includes, general tourism trends, existing and upcoming tourist circuits, infrastructure assessment of States and various policy initiatives taken by State Governments.

The Government of India has given special focus on promoting ‘Brand India’ to attract larger number of foreign tourists through the Incredible India campaigns, international roadshows, improving accessibility and amenities, and significant increase in budget allocation for the Ministry of Tourism among other key initiatives.

From an economic point of view, Indian tourism sector is a significant source of foreign exchange earnings and job generation; especially helping local and host communities. India can take the advantage of its unmatched tourism potential by providing policy tools and mechanisms to channelize investments in the right direction.

Tourist arrivals in India

Looking at the statistics, Foreign Tourist Arrivals (FTAs) in India increased by 19.5% with 6.30 Lakh people visiting the country in May 2017 as compared to 5.27 lakh in the same period last year. A total of 0.68 Lakh tourists arrived on the e-tourist visa in May 2017 as compared to 0.44 Lakh in May 2016, registering a growth of 55.3%, according to the tourism ministry.

On the back of revisions to the methodology of collecting tourist statistics, India has jumped 16 places in the World Tourism Organization (UNWTO) rankings to move up to 24th for 2014 and 2015. 40th rank in Tourism & Travel Competitiveness Index Domestic Tourist Visits (DTVs) in 2016 have witnessed a year-on-year growth of 12.68% over 2015. During 2016, the 2017 (Jump of 12 positions) number of DTVs to the States/ UTs was 1,613.55 million (p) as compared to 1,432 million in 2015.1

The rising flow of FTAs is clearly a function of the stellar growth performance of emerging tourism niche areas such as like MICE and Medical tourism among others. Furthermore, FTAs have been able to garner considerable resources for the country and have started contributing significantly to the economy. The year wise contribution in terms of Foreign Exchange Earnings (FEE) has been depicted in the figure below:-

Figure 1: Year - wise contribution in terms of FEEs

26000 10 8.89 9 8.02 7.68 21000 8 6.97 6.31 6.58 7 5.78 2 1 0 7 16000 5.08 5.28 5.17 1 9 6 5 7 6 4.45 1 8 3 5 3.92 1 6 5 4 1 7 3 11000 3.46 2 3 1 4 6 4 1 4 9 3 2.65 2.54 2.73 2.38 1 8 3 2 3 1 3 6 1 0 7 2 9

6000 8 6 3 4 2 4 6 3 7 4 9 3 3 4 6 0 3 1 9 8 3 1 0 6 1 7 0 1 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

FEE in USD Million FTAs (Million no.) Source: http://www.indiastat.com/table/tourism/29/tourismreceipts/106/280570/data.aspx

1 http://tourism.gov.in/sites/default/files/Other/Brief%20writeup.pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 3 This growth trend is dependent on many external factors including exchange rate, socio – political scenario among others. FEEs contribute significant share to the GDP of India as FEEs. FEEs from tourism accounted for USD 23.15 billion in 2016, witnessing growth at a CAGR of 10.4 % during 2006–16.2 Indian Tourism Industry is expected to contribute 10% of the GDP and generate 49.87 million jobs by 2027.

Table 1: Forecast of Indian Tourism Industry

India 2016 2027 (p) USD Bn % of total USD Bn % of total (constant prices) (constant prices) Direct Contribution to GDP 71.7 3.3 148.2 3.5 Total Contribution to GDP 208.9 9.6 424.5 10

Total Contribution to Employment 40,343 9.3 49,868 9.6 (000 jobs) Visitor export 22.8 5.3 43.2 6.8 Capital Investment 34 5.7 61.8 5.7

Source: WTTC –Travel & Tourism Economic Impact 2017, India

The Ministry of Tourism (MoT), Government of India is the apex Government nodal agency for the tourism sector in India responsible for introducing various growth oriented policy measures, formulating schemes and programs, coordinating with private and Government agencies, and marketing and promotion of tourism in the country. Other related ministries also support the MoT in its endeavour to establish India as a leading global tourist destination.

Policy Reforms • Extended e-visa scheme to 161 nations • Setting up of Medical Tourism & Wellness Board • National Tourism Policy to be launched Marketing and Promotion • Organized first ever Incredible India Tourism Investors’ Summit 2016 to encourage investments in Tourism • Documentary series “Go North East” launched in partnership with Discovery Channel Ministry of • Launch of marketing initiatives like Incredible India 2.0 3 Tourism • 24*7 Multi-lingual Tourist Helpline • Swachh Paryatan Mobile app • 15.77% hike in Union Budget 2017-18 with an allocation of ` 1,840.77 crore Skill Development • Launched special programe “Hunar Se Rozgar Tak” (HSRT) to impart tourism and hospitality specific skills among youth • Set up the Indian Culinary Institute (ICI) at Tirupati, Andhra Pradesh • Launched infrastructure development schemes like PRASAD and Swadesh Darshan

2 IBEF, Tourism and Hospitality – May 2017 3 http://tourism.gov.in/sites/default/files/annualreports/MoT%20Annual%20Report%202016-17_English.pdf

Investment in Tourism Infrastructure 4 Igniting India’s Growth Engine Infrastructure Development • New initiative – Development of Tourism in J & K State with Central Financial Ministry of Assistance (CFA) of ` 2100 Cr.4 Tourism • Identification of 9 Islands as potential tourism growth zones • Identified few circuits under Swadesh Darshan scheme to be developed as theme - based tourist circuits • New Civil Aviation Policy 2016 • Six airports across major cities are being developed under PPP model • UDAN scheme - MoUs signed between various State Governments and Airport Authority of India (AAI) for enhancing regional connectivity • Launch of dedicated Airline Service to North-East States • Increase in operational airports from 75 to 118 – Impetus to Ministry of Civil regional connectivity 5 Aviation • Encouragement to Foreign Direct Investment (FDI) • International Collaboration - signed its first open skies agreement with Greece, signed an MoU with Spain for cooperation in civil aviation industry • Encouragement to Seaplane operations for tourism in conjunction with Helicopter services • 4 new Greenfield airport projects are coming up in the smaller towns of Andhra Pradesh and Telangana • Railways propose to run tourist trains in various Pilgrim Circuits, like Astha Circuit Tourist Train launched in 2017 • 100% FDI in the railway infrastructure • Rope in private companies to redevelop and modernize 23 stations. PPP for O&M of stations • Launched mobile ticketing services, introduction of e-catering • Launched India’s first semi high - speed trains like Gatimaan Express Ministry of and Tejas Express Railways • Planning to introduce light - weight aluminum coaches by early 2018 basis success of Spanish - made Talgo train • High speed Wi-Fi launched at various stations with a target of 400 stations by 2018 • Introducing toll free 24*7 All India Helpline number • Indian Railways and UNESCO signed an agreement in 2017 for setting up a railway network between neighboring countries • Transport potential of 111 inland waterways to be tapped • Various initiatives implemented like e-landing, minimum rebate of 30% on all cruise vessel related charges and additional rebate of 25% for coastal cruise movement • Development of 78 lighthouses in the country as centers of tourism under Public Private Partnership (PPP) Ministry of • Sagar Mala project to modernize India’s Ports Shipping • Development of mega cruise terminal at 5 major ports - Mumbai, Goa, Cochin, Mangalore and Chennai, while also launching Seaplane services at Mumbai • Plan to set up a world-class Maritime Museum at Lothal, Gujarat • Lighthouse Museum has been constructed at Kannur, Kerala to promote maritime heritage

4 http://pib.nic.in/newsite/pmreleases.aspx?mincode=36 5 http://indiainbusiness.nic.in/newdesign/upload/FICCI-YES-BANK-Tourism-Report.pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 5 • Special Accelerated Road Development Programme for the NE Region • 100% FDI in the road sector is allowed under the automatic route in the Ministry of Road road and highways sector Transport & • Launched infrastructure developmental programmes like ‘Bharat Nirman’, Highways ‘Bharatmala’, ‘Setu Bharatam’ among others • Formulated a 7 phase programme, ‘National Highways Development Project’ for boosting transport infrastructure of the country • Prepared the Integrated Islands Management Plans for the 10 islands of Lakshadweep • Introduced online submission of applications for approval of Environmental, Coastal Regulation Zone (CRZ) and Forest clearances to ensure Ministry of transparency Environment, • Identified 275 Eco-Sensitive zones around National and Wildlife Sanctuaries Forest & Climate across the country Change • International Cooperation Agreement with 21 countries including Norway, Sweden, France, Canada and Russia on various environmental issues of mutual benefits • Launch of Green India Mission with the vision of enhancing India’s tree cover to 33% by 2022 • Ease in e-visa application - window of application for e-visa extended from 30 days to 120 days and duration of stay from 30 days to 60 days with double entry on e-Tourist and e-Business visa and triple entry on e-Medical visa

Ministry of • Pravasi Bhartiya Divas at different parts of India External Affairs • All embassies across the world promote different tourist destinations of the Country • Organization of Kailash Manasarovar Yatra • Flagship publication “India Perspectives” provides an insight into India’s culture and tradition along with elements of contemporary India • ‘Project Mausam’ to establish cross cultural linkages and to revive historic maritime cultural and economic ties with 39 Indian Ocean countries • Plan has been drawn for holding cultural festival namely, ‘Octave’ highlighting rich cultural heritage of the North Eastern States in various Ministry of parts of the country Culture • Festivals of India have been organized in various countries to promote Indian artists abroad and strengthen bilateral exchange • E-Ticketing platform for ASI - ticketed monuments • 100 monuments as ADARSH Smarak for upgradation of tourist related amenities

State Initiatives

1. Madhya Pradesh

• Policy Initiative: Madhya Pradesh has developed Tourism Policy 2016 which focuses primarily on establishing effective institutional mechanism to promote private investment in tourism sector and development of tourism based projects through Public Private Partnership (PPP) mode.

Investment in Tourism Infrastructure 6 Igniting India’s Growth Engine • Ecotourism development: Madhya Pradesh Ecotourism Development Board has started an initiative, Anubhuti 2017, to sensitize students about ecotourism. As a part of this initiative, 53,935 students visited ecotourism zones from December 2016-January 2017. Further, tourism department can offer land on lease or license for eco-adventure tourism activities. In general, period of License granted will not be less than 5 years and more than 15 years.

• Tourism Marketing: Government of Madhya Pradesh has a special focus in developing sustainable tourism, weekend tourism and film tourism.

• Infrastructure: Government of Madhya Pradesh has provided tourism projects with facilities on par with industries department such as power provided at industrial tariff, water resource department shall allow the consumption of water from its sources on industrial rate, local bodies shall charge property tax/development charge on building constructed as per industrial rate. Further, Government of Madhya Pradesh is planning to build high quality tourist amenities on National / State Highways at approximately every 40-50 km under “Wayside Amenities Establishment and Operation Policy, 2016”.

• Employment oriented skill development, education and training for youth: To ensure employment oriented skill development in the tourism sector, youth of Madhya Pradesh will be educated and trained in trades relevant to the tourism industry through State Institute of Hospitality Management (SIHM), Madhya Pradesh Institute of Hospitality Training (MPIHT) and Food Craft Institute (FCI).

2. Andhra Pradesh

• Policy Initiatives: Andhra Pradesh Tourism Policy 2015-20 provides incentives such as Complementary/ Linkage Infrastructure Development Assistance, Waiver of Land Conversion Charges, Reimbursement of Registration and Stamp duty, Rebate in SGST and Industry status for Tourism Infrastructure Projects and more.

• Land Lease Policy: Apart from the incentives and exemptions under the Andhra Pradesh Tourism Policy 2015-20, the state also provides land for Tourism Infrastructure development under PPP mode. A transparent bidding process shall be undertaken to select a developer for the various projects under the PPP mode for allotment of land.

• Skill Development: The Ministry of Tourism has set up the Indian Culinary Institute (ICI) at Tirupati, Andhra Pradesh. The first of its kind in India, the Institute has commenced its academic session from August, 2016.6

• Formation of Andhra Pradesh Tourism Authority7: Andhra Pradesh Tourism, Culture and Heritage Board has been formed to give impetus to the tourism sector in the state. The proposed Board will be chaired by the Chief Minister and cabinet members will be vice- chairmen of the board. It will have a state-level committee and an executive committee.

6 Annual Report 2016-17, Ministry of Tourism, Government of India 7 G.O.MS.No. 26, dated: 6th December 2016 , Government of Andhra Pradesh

Investment in Tourism Infrastructure Igniting India’s Growth Engine 7 3. Uttarakhand

• Policy Initiatives: The state has drafted Uttarakhand Tourism Policy 2016 for stakeholder inputs which offers attractive incentives and institutional support to promote investment in tourism in the state. Additionally, the state has launched Uttarakhand Film Tourism Policy, 2015 to simplify the regulations related to film shootings.

• Product Development: The state is focused to develop unique tourism products offering unmatched experience catering to various tourist segments i.e. Rural Tourism, Homestays for local communities, Film Tourism, Adventure Tourism and Yoga Tourism.

• Marketing: The state has recently launched focused campaign on highlighting Uttrakhand as a favored tourism destination targeting round the year tourism while also focusing on Gramin Paryatan Uthan Yojana which aims to collaborate with villagers in tourism promotion.

• Development of Tourism Circuits: The state has identified five tourist circuits based on their geography, attractions and coverage by segment tourists. Further, there are key circuits under development of Tourism infrastructure schemes like integrated development of Heritage Circuit in Kumaon Region under Swadesh Darshan scheme and Integrated Development of Badrinath and Kedarnath under PRASAD.

• Encouraging Investment: To increase investment attractiveness of the State, Uttrakhand Government has taken various initiatives to increase its Ease of Doing Business. Further to increase private investment in tourism sector, the State Government has signed various MoUs to increase tourist investments in State during Incredible India Tourism Investors Summit ’2016.

• Infrastructure: State Government recognizes the need for development of infrastructure to boost tourism. Uttarakhand has a strong social and industrial infrastructure, robust connectivity with over 39,000 km of road network, two domestic airports, 345.23 km of rail routes and installed power capacity of 3,177.27 MW of which Hydropower generation capacity is about 2,441.82 MW (upto Nov 2015).

4. Rajasthan

• Policy Initiatives: The state has launched Rajasthan Tourism Unit Policy 2015 which offers attractive incentives and institutional support to promote investment in tourism sector. Additionally, the state has launched Rajasthan Film Shooting Regulations, 2016 - to simplify regulation related to film shooting and Heritage Certificate Guidelines, 2016 - to ease Heritage certification process.

• Product Development: The state is focused to develop themes based tourism products such as Heritage, Spiritual, Cultural, Wildlife, Desert, MICE, Adventure, Heritage and Night Tourism among others to promote Rajasthan as round the year tourist destination.

• Marketing: The state has recently launched a 360 degree marketing campaign ‘Jane Kya Dikh Jaye’ to promote Rajasthan among domestic and international tourists and re-invent brand Rajasthan. The state is also working on providing support to B2B stakeholders who are involved in bringing tourists to Rajasthan.

Investment in Tourism Infrastructure 8 Igniting India’s Growth Engine • Development of Tourism Circuits: Rajasthan is part of established tourist circuit formed by New Delhi, Agra and Jaipur - Golden Triangle Circuit - one of the most travelled circuit. The state has further identified nine tourist circuits based on their geography, attractions and coverage by independent / group tourists which are being developed with assistance from Central Government. Further, there are key circuits bring developed under various Tourism infrastructure schemes such as development of Sambhar Lake Town and Krishna circuit under Swadesh Darshan scheme, Integrated Development of Ajmer - Pushkar region under PRASAD and Ajmer under HRIDAY scheme.

• Encouraging Investment: The Department of Tourism has approved 91 tourism unit projects in the State in the year 2016-17 (till December 2016) with a proposed investment of ` 1,650 crore. Further, to increase private investment in tourism sector, the State Government has signed various Tourism related MoUs during Resurgent Rajasthan-2015 and Incredible India Tourism Investors’ Summit 2016.

• Infrastructure: State Government recognizes the need for development of infrastructure to boost tourism in the State. Department of Tourism has identified projects which can be developed on PPP mode across various themes and destinations in the state.

5. Odisha

• Policy Initiatives: The new tourism policy 2016 was launched with the vision to develop Odisha as the supreme tourist destination and to place it prominently on the domestic and global tourism map.

• Inbound Tourism promotion: The State Government has signed a MoU with Air Asia to operate direct international flights to Malaysia with the objective to promote inbound tourism in Southeast Asia.

• Tourism Marketing: Odisha Tourism organizes a number of festivals such as Kalinga International Buddhist Conclave, Konark Festival, International Sand Art Festival and Muketeswar Dance Festival amongst others.

• Baristha Nagarika Tirtha Yatra Yojana: This scheme was launched in collaboration with IRCTC to promote Religious Tourism amongst Senior Citizens.

• Development of Tourism Circuit: A mega coastal tourism covering Gopalpur-Tampara- Barakul-Satapada would be developed with assistance from Central Government under Swadesh Darshan Scheme.

• Infrastructure: The State Government recognizes the need of infrastructure development in promoting tourism. Odisha has a strong social and industrial infrastructure, over 253,050 km of road network, one international airport, 2,540 km of rail routes and installed power generation capacity of 9,421.52 MW (Upto June 2016).8

8 IBEF, Odisha Presentation

Investment in Tourism Infrastructure Igniting India’s Growth Engine 9 6. Karnataka

• Policy Initiatives: The Tourism Policy 2015-2020 has assigned ‘industry’ status to the tourism sector and hosts numerous incentives and concessions for this sector. It focuses on development of tourism in the state with special emphasis on infrastructure development on PPP mode.

• Vision Group on Tourism: Chaired by Mr. Mohandas Pai, the vision group advises the Government on various strategies and policy initiatives for the development of tourism in Karnataka.

• Karnataka Tourism Trade Facilitation Act 2015: Karnataka Tourism Trade Facilitation Act 2015 was enacted to facilitate tourism activities, promote investments in the sector and strengthen accountability at various tiers of Government.

• Development of Tourism Circuit: A mega coastal tourism covering Dakshin Kannada, Uttar Kannada & Udupi would be developed with assistance from Central Government under Swadesh Darshan Scheme.

• Marketing: The State Government has declared the year 2017 as the ‘Year of the Wild’ to promote ecotourism and adventure tourism.

• Developmental Initiatives: Several initiatives such as Tourist Mitra, Adoption of tourism destinations under CSR, etc. have been taken up by the Tourism Department for development of variety of tourism activities and creation of tourism friendly environment.

7. Telangana

• Policy Initiative: The State Government is coming up with the New Tourism Policy to encourage investments in the Tourism and Hospitality Sector.

• Telangana Samskruthika Sarathi: Creation of “Telangana Samskruthika Sarathi”, a distinct State level body to create awareness regarding the cultural heritage of Telangana & provide information about various schemes & policies launched by the Government of Telangana.

• New Cinema City: Proposal to build a new mega Cinema City to promote the tourism film industry in Telangana. The proposed project is expected to span over 2,000 acres on the Nalgonda-Ranga Reddy border in Rachakonda.

• Cultural Promotion: Proposal to develop “Kaloji Kala Kendram” at Warangal and “Telangana Kalabharathi” at Hyderabad, to promote cultural activities in the state.

• Spiritual Tourism: Allocation of USD 16.59 million for the development of Yadagirigutta Devasthanam. Further, development of Narasimha Abhyaranyam has been planned in 400 acres of land. Meditation centres, Veda pathshalas, marriage halls, parks and cottages would be constructed in additional 1,600 acres of land.

Investment in Tourism Infrastructure 10 Igniting India’s Growth Engine 8. Maharashtra

• Policy Initiative: In 2016, the Government of Maharashtra formulated a new policy on Tourism - ‘Maharashtra Tourism Policy 2016,’ which aims at minimizing delays as well as redundancies of information and enhancing the application process efficiency. An amount of USD 43.53 million was allocated by the government to boost basic amenities across tourist spots.

• Special Tourism Districts: Aurangabad has been affirmed as a tourist district in the State and the Government has decided to offer special attention towards the upliftment of tourism in Verul, Sulibhanjan, Mhaismal and Khultabad.

• Tourism PPP: Formation of Public Private Partnership (PPP) Transaction Advisory Cell which will provide advisory support for private sector participation for PPP Projects.

• Maharashtra Tourism Investor Facilitation Cell: The institution has been set up which will act as a converging body to monitor the sector progress. Steering Committee has been formed under Principal Secretary (Tourism) for facilitating investments into the State.

9. Arunachal Pradesh

• Arunachal Pradesh is one of Asia’s most biologically diverse and intact forest ecosystems. It has been recognized as one of the 18 biodiversity hotspots of the world. The State is known as “Orchid Paradise” accounting for 601 species of orchids.

• Under Swadesh Darshan Scheme, Ministry of Tourism has planned integrated development of Adventure Tourism in Arunachal Pradesh under North East circuit. The amount sanctioned for this project is ` 97.14 crore.

• The State Government has signed an MOU with the Indian Railway Catering and Tourism Corporation for promoting tourism.

• With the objective to make the State tourist friendly, the Government is working on simplifying the process of application & issuance of the Inner Line Permit.

.10. Himachal Pradesh

• Policy Initiatives: Sustainable Tourism Policy, 2013 has been formulated for promoting sustainable tourism without damaging the ecology and environment.

• Investment incentives: The entertainment duty on various entertainment activities was reduced from 100% to 10% including ropeways and cinema-halls to promote these facilities. New cinema-halls will be exempted from entertainment duty for 5 years in the State.

Investment in Tourism Infrastructure Igniting India’s Growth Engine 11 • Development of Tourism Circuits: The state has identified four tourist circuits based on their geography, attractions and coverage by targeted tourists – Beas circuit, Dhauladhar circuit, Satluj circuit and Himalayan Tribal circuit. Further, key circuits under development include formation of Himalayan Tourist circuit under Swadesh Darshan Scheme9 with sanctioned amount of ` 100 crore, which includes work like artificial rock climbing at Manali, beautification of Dal Lake at Dharamshala and Paragliding School at Bir etc.

• Infrastructure: With hydro power potential of 27,436 MW, Himachal Pradesh accounts for 25.9% of the country’s total hydro power potential. As of March 2016, all the villages of Himachal Pradesh have been electrified and the State became second State in India to declare Open Defecation Free (ODF) status under ‘Swachh Bharat Mission’.

11. Gujarat

• Infrastructure: As of June 2016, Gujarat had a total installed power generation capacity of 30,188.75 megawatt (MW). According to the Department of Industrial Policy & Promotion (DIPP), Foreign Direct Investments (FDI) inflows in the state of Gujarat totalled USD 13.28 billion during April 2000-March 2016 .

• Tourism Policy for the state of Gujarat (2015- 2020): Key objectives of the policy include attracting more tourist through MICE tourism and leverage innovative forms of tourism such as adventure, cruise, event-based, inland waterways, medical tourism, creation of adequate tourism related infrastructure – a paradigm shift through granting Industry Status to Tourism Sector.

• Regulation for Hotel and Mixed Use Development 2016: New policy is aimed at encouraging building taller hotels to create world class facilities for tourists and business travellers coming to Gujarat.

12. West Bengal

• Economic Profile: The economy of the State has been largely dominated by the service sector which contributed over 60% to the total GSDP in 2015-16 at current prices and has witnessed rapid growth with a CAGR of 15.55% during 2004-05 to 2015-16.

• Unique Geography: West Bengal is the only state to have both the Himalayas and the coastline within its boundaries. It is also one of the historical cultural hubs of the country with a long tradition of diverse performing arts and cuisines.

• West Bengal Tourism Policy 2016: Six primary tourist circuits have been identified based on the geographical diversity, viz. Darjeeling Himalayas, Dooars, Bengal Heritage, Coastal Bengal, Kolkata and Sunderbans Mangroves.

9 http://www.business-standard.com/article/pti-stories/centre-sanctions-rs-100-crore-for-hp-under-tourism-proj- ect-117021400895_1.html

Investment in Tourism Infrastructure 12 Igniting India’s Growth Engine • Tourism Incentive Scheme 2015: The scheme has been introduced to attract more investments in tourism sector. Salient features of the incentives are:

� Waiver of Electricity Duty for a period of 5 years

� Capital Investment subsidy at a ceiling of ` 175 lakhs

� Incentives for Adventure Tour Operators

� Reimbursement of Stamp Duty and Registration Fee ranging from 50%-70%

� Customized incentives for Mega Projects

Way Forward

• Boost Private Sector Investment: Granting infrastructure status to smaller projects of ` 20- 25 crore as compared to the current norm of ` 200 crore can capture larger segment of projects and develop infrastructure in Tier II and III cities.

• Improve Ease of Doing Business: Fast tracking mechanisms like single window clearance to ensure uniformity and consistency in regulatory processes across states can attract higher investments.

• Private Sector Participation to Mobilize Existing Government Infrastructure: There is a large inventory of tourism infrastructure owned by state governments that is lying idle or has further potential to upscale. Inviting the private sector to partner in operating these units can make them self-sustainable and also boost room inventory.

• Medical and Wellness Tourism: India offers a completive advantage in specialized medical procedures and is a global hub for spiritual and wellness therapies. Channelizing investments to create supporting infrastructure for medical and wellness tourism is the need of the hour.

• Developing MICE Infrastructure: India still has less than 0.5% share of the world meetings and conventions market. Creating more world-class infrastructure can enable India to attract global conventions and meetings in tourism as well as other fields.

• Coastal Area Development: To leverage the large coastline of India, priority can be accorded for identifying a minimum of 100 coastal destinations/ beaches and develop the basic tourism infrastructure at these locations.

• Heritage Destinations: Many heritage monuments lack the basic infrastructure for its maintenance and for tourists, and a concerted effort is needed to develop a pan India model for developing basic upkeep, maintenance, landscaping and tourist amenities.

• Investments in Small and Micro Ventures through MSME funds: Convergence of Government Schemes with organizations like NABARD, SIDBI among others can be channelized into developing infrastructure for smaller tourism enterprises in rural and hinterland areas.

• Niche-Based PPP Interventions: Tourism offers a wide variety of recreational experiences and activities, and each of these areas have unique requirements when it comes to infrastructure development like public amenities for rural tourism or passenger docks for cruise tourism. PPP models can be explored for such specific developments.

Investment in Tourism Infrastructure Igniting India’s Growth Engine 13 Investment in Tourism Infrastructure 14 Igniting India’s Growth Engine 1. Travel & Tourism Outlook

Investment in Tourism Infrastructure Igniting India’s Growth Engine 15 1. Travel & Tourism Outlook

Tourism industry today has evolved into a key driver of socio-economic progress paving the way for a more sustainable and inclusive future. Through creation of jobs, enterprises and infrastructure development globally, over the past six decades, tourism has experienced continued expansion and diversification, to become one of the largest and fastest-growing economic sectors in the world.

The United Nations has designated the year 2017 as the International Year of Sustainable Tourism for Development. While enhancing participation of communities and improving penetration of economic benefits to the last mile remain important considerations in developing sustainbale tourism, tourism infrastructure will be the backbone for these inclusive models, and will be an important factor in areas like environmental standards and resource optimization.

Globally, the Tourism industry has increasingly been recognized for its important contributions to economic growth and development as well as social, cultural, environmental, and heritage value, with significant contributions being witnessed in recent decades.

1.1. Global Tourism Scenario

For the sixth consecutive year, the tourism industry growth has outperformed that of the global economy, showcasing the industry’s resilience in the face of global geopolitical uncertainty and economic volatility. The industry contributed USD 7.6 trillion to the global economy (10.2% of global GDP) and generated 292 million jobs (1 in 10 jobs on the planet) in 2016. The sector accounted for 6.6% of total global exports and almost 30% of total global service exports.10

10 http://www3.weforum.org/docs/WEF_TTCR_2017_web_0401.pdf

Investment in Tourism Infrastructure 16 Igniting India’s Growth Engine The United Total 1/10 of all Visitor Over Next 10 Nations has contribution jobs exports Years, the designated of Tourism worldwide generated Sector is 2017 the industry in are supported 6.6% of total expected to International 2016 was by Tourism exports in Outperform Year of 10.2% of industry in 2016 which is the Global Sustainable World GDP - 2016 - 292 forecasted to Economy as Tourism for $7.6 tn Million Jobs increase by Tourism investments Development comprising of 4.3% p.a from are forecasted 9.6% of Total 2017-2027 to rise by 4.5% Employment p.a over next ten years

Source: WTTC –Travel & Tourism Economic Impact 2017, World11

These figures are expected to keep rising in the coming decade. Direct Travel & Tourism GDP growth is expected to accelerate to 3.8%, up from 3.1% in 2016.12 The tourism sector has emerged as one of the key enabler of growth amongst the services sector worldwide. The sector stimulates engagement & collaboration of different communities including tourists, locals, governments and businesses across the tourism value chain. This coupled with growing affordability of travel has triggered a rapid rise in demand for tourism all over the world.

Figure 2: Total Contribution of Tourism to GDP

14000 0.07

12000 0.06

10000 0.05

3.99% 3.95% 3.60% 8000 3.56% 3.08% 3.50% 0.04

6000 0.03

4000 0.02

2000 0.01 5876 6214 6462 6717 6956 7170 7613 7884 11512 0 0 2010 2011 2012 2013 2014 2015 2016 2017 (E) 2027 (F)

USD Bn Growth Rate

Source: WTTC –Travel & Tourism Economic Impact 2017, World

11 https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2017/world2017.pdf 12 https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2017/world2017.pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 17 Table 2: Forecast of Global Tourism Industry

2016 2027 (p) Global Travel & Tourism USD Bn (constant % of total USD Bn (constant % of total prices) prices) Direct 2,306 3.1 3,537.1 3.5 Contribution to GDP Total 7,613.3 10.2 11,512.9 11. 4 Contribution to GDP Total 292,220 9.6 381,700 11. 1 Contribution to Employment (000 jobs) Visitor export 1,401.5 6.6 2,221 7. 2 Capital 806.5 4.4 1,307.1 5 Investment

Source: Travel & Tourism Economic Impact, 2017, WTTC

The tourism industry is projected to grow faster than the wider economy and many other industries over the next decade.13 Such strong growth will require tourism destinations across the world to provide environment which is conducive to business development. It will require effective coordination between public institutions and the private sector around the world. Over the longer term, growth of the Tourism sector will continue to be strong as long as the tourism related investment and development takes place in a sustainable manner.

1.2. Indian Tourism Scenario

India with its vast geographical and cultural diversity is an emerging hotspot for global tourists as it offers wide range of tourist attractions from Himalayas to oceans, diverse tourism destinations spread across its length and breadth.

Government of India has given special focus on promoting ‘Brand India’ to attract foreign tourists through the Incredible India campaigns, international roadshows, improving accessibility and amenities, and significant increase in budget allocation for the Ministry of Tourism among other key initiatives.

From an economic point of view, Indian tourism sector is a significant source of foreign exchange earner and job generator; especially helping local and host communities. India can take the advantage of its unmatched tourism potential by providing policy tools and mechanisms to channelize investments in the right direction.

Through revisions in the methodology of collecting tourist statistics, India has jumped 16 places in the World Tourism Organization (UNWTO) rankings to move up to 24th for 2014 and 2015.

13 https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2017/world2017.pdf

Investment in Tourism Infrastructure 18 Igniting India’s Growth Engine Economic Impact (2016)

In 2016, the Tourism industry Tourism Investments accounted supported 9.3% of total for 5.7% of total investments in employment in India 2016

rd Total contribution of Tourism in India ranked 3 among 184 India accounted for 9.6% of the countries in terms of Tourism’s GDP in 2016 total contribution to GDP in 2016

Visitors export generated ` 1,529.3 Bn which is 5.4% of total exports in 2016

Source: WTTC – Travel & Tourism Economic Impact- India 2017

Key Statistics

Tourism’s contribution to capital investment was 5.7% of total investments in Higher 2016 and is projected to grow 5.7% p.a. during 2017–27, higher than the global Investments average of 4.5%. Contribution of visitor exports to total exports is estimated to increase 6.1% p.a. Visitor Exports during 2017–27, compared to the world average of 4.3% p.a.14 FTA has grown with a CAGR of 8.45% against the international growth rate of 4-5%. By 2025, FTAs in India are expected to reach 15.3 million, according to the WTO.15 FTA FTAs during the period January-May 2017 were 42.15 lakh with a growth of 16.4% over the corresponding period during the previous year. Of these, 6.50 lakh tourists arrived on e-Tourist Visa as compared to 4.35 lakh during January- May 2016, registering a growth of 49.4%. FEEs during the period January-May 2017 were ` 74,008 crore with a growth of FEE 19.2%, as compared to the FEE of ` 62,072 crore with a growth of 14.0% in January-May 2016 over January-May 2015.16 India ranked 3rd among 184 countries in terms of travel and tourism’s total Contribution contribution to GDP in 2016. The tourism & hospitality sector’s direct contribution to GDP above to GDP in 2016 was USD71.53 billion. world average During 2006–17E, direct contribution of tourism & hospitality to GDP is expected to register a CAGR of 14.05%. Employment Indian tourism sector is estimated to support 41 million jobs by 2017 which have Generation been further forecasted to reach approx 49.8 million by 2027.17 Domestic travel spending generated 82.5% of direct Travel & Tourism GDP Domestic in 2015 compared with 17.5% for visitor exports. Domestic travel spending is Tourism expected to rise by 7.8% p.a. to ` 13,305.5 billion in 2026 while visitor exports are expected to rise by 7.2% p.a. to ` 2,625.6 billion in 2026.18

14 https://www.ibef.org/download/Tourism-and-Hospitality-February-2017.pdf 15 http://tourism.gov.in/sites/default/files/FTA/Press_release_-_Feb_2017-_FTAs.PDF http://pib.nic.in/newsite/ PrintRelease.aspx?relid=160715 16 http://tourism.gov.in/sites/default/files/Other/Press%20Release%20May%202017.pdf 17 https://www.ibef.org/download/Tourism-and-Hospitality-February-2017.pdf 18 https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2016/india2016.pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 19 As per latest Travel and Tourism Competitiveness Index (TTCI) Global ranking published by World Economic Forum 40th rank in Tourism & (WEF)Part 3: Country/Economy19, Asia-Pacific Profiles consists of some of the economies that Travel Competitiveness have flourished the most in recent years and India is one Index 2017 of the nations, gaining 12 places to reach the 40th position globally.India During 2016-20, India is poised to be the fastest 40th / 136 growing Travel & Tourism economy, closely followed by Vietnam,Travel & Tourism China andCompetitiveness Indonesia. Index 2017 edition

TableKey Indicators3: Improved ranking of India in Travel & TourismSources: Competitiveness World Tourism Organization (UNWTO) Index and World 2017 Travel and Tourism Council (WTTC)

International tourist arrivals 8,027,133 T&T industry GDP US $41,582.4 million Travel & Tourism Competitiveness Edition % of total 2015 20172.0% International tourism inbound receipts US $21,012.7 million Rank T&T industry employment 52/141 23,454,40040/136 jobs Average receipts per arrival US $2,617.7 % of total 5.5% Score (5) 4.0 4.2

Performance Overview Key Score Highest score Figure 3: India’s performance in Travel & Tourism Competitiveness Index 2017 Pillar Rank/136 Pillar Rank/136

International Openness 55th Price competitiveness 10th

Prioritization of Travel & Tourism 104th Environmental sustainability 134th

ICT readiness 112nd Air transport infrastructure 32nd

Human resources and Ground and port labour market 87th infrastructure 29th

Health and hygiene 104th Tourist service infrastructure 110th

Safety and Natural resources 24th security 114th 40th India Business Overall score 4.2 Cultural resources environment 89th and business travel 9th

7 6 5 4 3 2 1 Score 1-7 (best) 1 2 3 4 5 6 7

Source:India has http://www3.weforum.org/docs/WEF_TTCR_2017_web_0401.pdf improved 12 places to reach the 40th position globally. The the country's ground transport infrastructure, which has traditionally country has seen continued growth in international arrivals over the been a challenge (29th). Health conditions are improving, though they past 15 years, reaching the 8 million mark in 2015. India continues to remain inadequate (104th). Similarly, ICT readiness (112th), security Indiacharm continuesinternational tourists to attractwith its vast international cultural and natural tourists resources withconcerns its vast (114th) cultural and human and resources natural (87th) areresources improving, but (ranked 9th(9th and and 24th,24th respectively), respectively and its pricein the competitiveness index), byadvantage protectingremain more weak. cultural While further sites improvements and intangible are needed across expressions these (10th). India continues to enrich its cultural resources, protecting more dimensions, India is taking small but important steps in the right throughcultural sites UNESCO and intangible World expressions Heritage through UNESCO lists, Wandorld increasingdirection. digital The Indian presence. T&T sector presents Its price significant competitiveness opportunities that advantageHeritage lists, (10and viath) amakes greater digital it most presence. preferred International destination areby yet tourists to be reaped, from especially middle in the and provision emerging of tourist se economicrvice countries.openness (55th, International up 14 places), through openness stronger visa (55 policiesth, up by 14 places),infrastructure through (110th), and instronger terms of additional policies accommodation on Visa such implementing both visas on arrival and e-visas, has enabled India to capacity and entertainment facilities. asrise implementing through the ranks. The both T&T sectorvisas benefited on arrival from improvemen and e-visas,ts in has enabled India to rise in tourism rankings. However, in the provision of tourist service infrastructure, India is ranked 110th, and it remains a high potentialPast performance area for domestic and international investors.

TouristTravel & TourismArrivals Competitiveness in India Edition 2015 2017 Rank 52 / 141 40 / 136 Domestic Tourist Visits (DTVs) in 2016 have witnessed a year-on-year growth of 12.68% over 2015. Score 4.0 4.2 During 2016, the number of DTVs to the States/ UTs was 1,613.55 million as compared to 1,432 million in 2015.20

19 http://www3.weforum.org/docs/WEF_TTCR_2017_web_0401.pdf184 | The Travel & Tourism Competitiveness Report 2017 20 http://pib.nic.in/newsite/pmreleases.aspx?mincode=36

Investment in Tourism Infrastructure 20 Igniting India’s Growth Engine Figure 4: Domestic Tourist Visits

1800 1613 1600 1432 1400 1283

1200 1143 1045 i s t ( n m l o )

V 1000 864 800 748

o u r i s t 669 T 563 600 527 462 392 400 D o m e s t i c 200

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (p)

Source: India Tourism Statistics 2015

Similarly, the year 2016 witnessed a growth of 9.7% in Foreign Tourist Arrivals (FTAs) in India. FTAs during 2016 were 88.04 lakh (p) as compared to the FTAs of 80.27 lakh during 2015.21 About 84.5% of the FTAs entered India through air routes followed by 14.8% by land routes and 0.7% by sea routes. Delhi and Mumbai airports accounted for about 47.8% of the total FTAs in India. Foreign tourist arrivals into the country are forecast to increase at a CAGR of 7.1 % during 2005–25.22

The rising flow of FTAs is clearly a function of the stellar growth performance of emerging tourism niches like MICE and Medical tourism among others. Furthermore, it goes without saying that FTAs have been able to garner considerable resources for the country and has started contributing significantly to the economy. The year wise contribution in terms of Foreign Exchange Earnings (FEE) has been depicted in the figure below23:-

Figure 5: Year wise contribution in terms of FEEs

26000 10 8.89 9 8.02 7.68 21000 8 6.97 6.31 6.58 7 5.78 2 1 0 7 16000 5.08 5.28 5.17 1 9 6 5 7 6 4.45 1 8 3 5 3.92 1 6 5 4 1 7 3 11000 3.46 2 3 1 4 6 4 1 4 9 3 2.65 2.54 2.73 2.38 1 8 3 2 3 1 3 6 1 0 7 2 9

6000 8 6 3 4 2 4 6 3 7 4 9 3 3 4 6 0 3 1 9 8 3 1 0 6 1 7 0 1 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

FEE in USD Million FTAs (Million no.)

21 http://tourism.gov.in/sites/default/files/Other/Brief%20writeup.pdf 22 IBEF, Tourism and Hospitality – May 2017 23 http://www.indiastat.com/table/tourism/29/tourismreceipts/106/280570/data.aspx

Investment in Tourism Infrastructure Igniting India’s Growth Engine 21 This growth trend is dependent on many external factors including exchange rate, socio – political scenario, however, FEEs contribute significant share to the GDP of India. FEEs from tourism accounted for USD 23.15 billion in 2016, witnessing growth at a CAGR of 10.4 % during 2006–16.24

State - wise Tourist visits

In terms of domestic tourist visits in various Indian states / UTs, most of them have witnessed growth in the footfall during 2016. The contribution of the top ten States/ UTs during 2016 stands at about 84.2% of the total number of Domestic Tourist Visits as against 83.62% recorded in 2015.

The top ten States in terms of number of DTVs (in millions) during 2016 were Tamil Nadu (343.81), Uttar Pradesh (211.71), Andhra Pradesh (153.6), Madhya Pradesh (150.49), Karnataka (129.76), Maharashtra (116.52), Telangana (95.16), West Bengal (74.46), Gujarat (42.25) and Rajasthan (41.5).25

• Tamil Nadu and Uttar Pradesh have maintained the first and second rank respectively in terms of DTVs in 2016.

• The top three States/UTs in terms of growth rates of domestic tourist visits (in %) during 2016 were Madhya Pradesh (93), Punjab (50.03), Andaman & Nicobar Island (29.62).

During 2016, the number of foreign tourist visits (FTVs) to the States/ UTs was 24.71 million as compared to 23.33 million in 2015 registering a growth of 5.92%. The contribution of top 10 States was about 87.02% to the total number of FTVs in the country during 2016.26

Table 4: Forecast for the Indian Tourism Industry

2016 2027 (p) India USD Bn % of total USD Bn % of total (constant prices) (constant prices) Direct Contribution to GDP 71.7 3.3 148.2 3.5 Total Contribution to GDP 208.9 9.6 424.5 10 Total Contribution to 40,343 9.3 49,868 9.6 Employment (000 jobs) Visitor export 22.8 5.3 43.2 6.8 Capital Investment 34 5.7 61.8 5.7

Source: WTTC –Travel & Tourism Economic Impact 2017, India

24 IBEF, Tourism and Hospitality – May 2017 25 http://tourism.gov.in/sites/default/files/Other/Brief%20writeup.pdf 26 http://tourism.gov.in/sites/default/files/Other/Brief%20writeup.pdf

Investment in Tourism Infrastructure 22 Igniting India’s Growth Engine 2. Key Government Initiatives to Boost Tourism Infrastructure in India

Investment in Tourism Infrastructure Igniting India’s Growth Engine 23 2. Key Government Initiatives to Boost Tourism Infrastructure in India

2.1. Ministry of Tourism

The budget allocation for the Ministry of Tourism is ` 1,840.77 crore for FY18, representing a growth of 15.77% over FY17 which indicates the rising focus of the Government towards tourism sector. As per table below, the budget allocation in the last 5 years increased at a CAGR of 7.24% from ` 1,297.66 crore to ` 1,840.77 crore.

Figure 6: Budget Allocation to Tourism Sector under Union Budget

2000 1840.77 1800 1573.07 1590 1600 1400 1297.66 1182.99 1200 1000 i n c r o e 800 600 400 200 0 FY14 FY15 FY16 FY17 FY18

Source: http://www.indiabudget.nic.in/

The Government of India has embarked on a series of initiatives to boost the tourism sector in the country.27

27 http://tourism.gov.in/; https://www.ibef.org/industry/tourism-hospitality-india.aspx

Investment in Tourism Infrastructure 24 Igniting India’s Growth Engine Policy Reforms Marketing & Infrastructure Skill Development Promotion Development • Extended e-visa • Set up the Indian scheme to 161 • Organized first ever • Indentified few Culinary Institute countries Incredible India circuits under at Tirupati, Andhra Tourism Investors’ Swadesh Darshan Pradesh • National Tourism Summit 2016 to scheme to be Policy to be encourage tourism developed as • Launched ‘Hunar launched investments theme based Se Rozgar Tak’ to • Launched tourist circuits impart tourism • Established documentary series • Identified 25 and hospitality Medical Tourism ‘Go North East’ in sites of religious specific skills & Wellness Board partnership with significance for among youth Discovery Channel development under • Launched Incredible PRASAD scheme India 2.0 • Identification of 9 • Launched ‘Swachh Islands as potential Paryatan Mobile tourism growth App’ for 25 Adarsh zones Smarak Monuments • Development of • 24*7 Multi-lingual Tourism in J&K with Tourist Helpline CFA of ` 2,100 crore

2.2. Ministry of Civil Aviation

India’s civil aviation industry is the 9th largest civil aviation market in the world valued at USD 16 billion. With various key initiatives taken by Government of India, civil aviation market is poised to become the 3rd largest aviation market by 2020 and the largest by 2030.28

Passenger traffic

The total passenger traffic which stood at 190.1 million in FY15, grew to 223.61 million in FY16, witnessing a growth of 17.63%. Passenger traffic experienced a CAGR of 8.77% in the last decade essentially backed by rising income levels, decrease in global crude oil prices and growth in low cost aviation segment. It is estimated that the country’s aviation sector will witness investments worth USD 6 billion in next 5 years.

Figure 7: Trends in growth of passenger traffic

250 50%

40% 200 168.89 30% 139.3 150 116.37 20% 121.51 122.41 10%

( i n m l o ) 100 70.62 0% 77.3 89.39 105.52 50 87.06 -10% 25.87 29.81 31.58 34.37 37.91 40.8 43.03 46.62 50.8 54.72 0 -20% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

International Domestic Growth-International Growth-Domestic Source: IBEF, 2017

28 https://www.ibef.org/industry/indian-aviation.aspx

Investment in Tourism Infrastructure Igniting India’s Growth Engine 25 The Ministry has taken a slew of initiatives29 in the last 5 years to spur investments which includes: � Policy Support through New Civil Aviation Policy 2016 • aims to promote affordable flights • establish an integrated ecosystem which will lead to significant growth of the civil aviation sector promoting tourism, employment and balanced regional growth • enhance regional connectivity through fiscal support and infrastructure development • enhance ease of doing business through deregulation, simplified procedures and e-governance 99 Focus on infrastructure development • Six airports across major cities are being developed under PPP model • Launch of dedicated Airline Service to North Eastern States • 4 new Greenfield airport projects are coming up in the smaller towns of Andhra Pradesh and Telangana • Under regional air connectivity scheme, the Government plan to increase the total number of operational airports in India from 75 to 118 • Planned revival of 50 underserved airports in 2017-18 with an estimated project cost of USD 669.34 million. The initiative is expected to enhance the connectivity of small cities and boost economic development • Encouragement to Seaplane operations for tourism in conjunction with Helicopter services • Launched UDAN scheme in April 2017. Under the scheme various State Governments have signed MoU with Airport Authority of India to increase regional connectivity • Plan to invest USD 1.83 billion for development of airport infrastructure along with air navigation services by 2026 � Encouragement to Foreign Direct Investment • 100% FDI allowed under automatic route for Greenfield projects • 74% FDI is allowed under automatic route for Brownfield projects 99 International Collaborations • India has signed its first open skies agreement with Greece • India has signed an MOU with Spain for cooperation in civil aviation industry. This is expected to drive trade, investment, tourism and cultural exchanges

2.3. Ministry of Shipping

Globally Cruise Tourism is one of the most dynamic and fastest growing sectors in leisure industry. India, with its vast and long coastline, could be a high potential tourist destination for cruise tourists. Sea arrivals constituted about 0.4% of country’s total tourist arrivals in 2014. It is estimated that the Indian cruise tourism market has potential to cater to 700 ships per year as against 158 handled currently. The cruise industry can generate more than 2.5 lakh jobs for 10 lakh cruise passengers. Further, the market has potential to attract 1.2 million tourists by 2030-31.30 The Ministry of Shipping plays a pivotal role to actualize the potential of cruise of tourism and thereby strongly position India’s destinations.

29 http://pib.nic.in/newsite/PrintRelease.aspx?relid=146238;http://www.civilaviation.gov.in/; https://www.ibef.org/ industry/indian-airports-analysis-presentation 30 https://www.maritimeinvest.in/cruise-shipping-and-lighthouse-tourism-cat

Investment in Tourism Infrastructure 26 Igniting India’s Growth Engine Table 5: Opportunities on Cruise Shipping and Lighthouse tourism

Project Cost in USD Project Proponent Project Name million International Cruise Terminal at Cochin 153.8 CoPT Port Modernizing the cruise Terminal at 8.3 MbPT Indira Dock to International Standards Ropeway service between Sewree 23.1 MbPT Fort and Elephanta Island in Mumbai Harbour Operation and Maintenance of Cruise 1. 4 MgPT Terminal at Mormugao Port Development of Marina on DBFOT basis 5.2 VoCPT through PPP mode at VOC Port for a period of 30 years Seaplane operations on Hooghly River 0.9 KoPT Development of mega cruise terminal in 92.30 SDC Mumbai Development of Cruise Tourism on 15.38 IWAI National Waterways Development of Tourism at 78 192.3 DGLL Lighthouses Total 492.68

Source: https://maritimeinvest.in/images/pdf/advantage-india.pdf

The Ministry of Shipping has undertaken the following key initiatives to boost coastal tourism promotion in the country:31

� Vision Plan

Ministry of Shipping has formulated a vision plan for cruise tourism promotion in the country. Following are the key areas were specific interventions have been proposed:

• Development of National as well as International cruise terminals across Indian coastline

• Simplification of process related to immigration

• Effective usage of RFID, APIS and PCS to reduce time required for approvals

• Rationalization of taxes and duties

� Lighthouse Tourism

The Ministry of Shipping through the Directorate General of Lighthouses and Lightships (DGLL) has drawn up an ambitious programme for developing tourism adjacent to 78 lighthouses under PPP model. DGLL has already initiated development of 8 lighthouses at Aguada (Goa), Chandrabhaga (Odisha), Mahabalipuram, KanyaKumari and Muttom (Tamil Nadu), Kadalur Point (Kerala), Kanhoji Angre, Sunk Rock (Maharashtra) and Minicoy (Lakshadweep). A Lighthouse Museum has been constructed at Kannur, Kerala to promote maritime heritage of the country.

31 https://www.maritimeinvest.in/, http://shipping.gov.in/

Investment in Tourism Infrastructure Igniting India’s Growth Engine 27 � Sagarmala Project

The project aims to bring Indian ports at par with the global ports and promote port lead development through setting up new ports, enhance port infrastructure, incorporating appropriate policy and institutional framework. Under the project more than 400 projects have been identified at an estimated investment of ` 7 lakh crore.32

� Collaboration

The Government has signed an agreement on passenger cruise services on the coast and protocol routes between India and Bangladesh to commence regular movement of tourists and passengers in vessels between the two countries.

� Maritime Museum

The Ministry of Shipping has planned to set up a world-class Maritime Museum at Lothal, Gujarat which is one of oldest port in the country.

� Seaplane Services at Mumbai

Mumbai Port Trust has awarded license to Maharashtra Tourism Development Corporation for operation of seaplanes with the objective to facilitate connectivity in the remote areas.

2.4. Ministry of Road Transport & Highways

The growth of tourism is heavily dependent on availability of essential tourism infrastructure. India has the 2nd largest road network in the world, covering a total of 4.87 million kms. Thus, the role of Road Transport & Highways Ministry is imperative in realizing the vision of establishing India as the most preferred tourism destination in the world.

The budget allocation for the Ministry of Road Transport & Highways is ` 64,900 crore for FY18 representing a growth of 18% over FY17. The budget allocation in the last 5 years grew strongly at a CAGR of 22.74% from ` 23,300 crore to ` 64,900 crore.

Figure 8: Union Budget Allocation for Ministry of Road Transport & Highways

70000 64900 60000 55000 50000 45000 40000 26000

` C r o e 30000 23300 20000 10000 0 FY14 FY15 FY16 FY17 FY18

Source: MoRTH

32 http://pibphoto.nic.in/documents/rlink/2016/nov/p2016111013.pdf

Investment in Tourism Infrastructure 28 Igniting India’s Growth Engine The following highlights key initiatives of the Ministry of Transport and Highways towards boosting tourism infrastructure of the country.33

� Focus on North East Connectivity

The Government has adopted a focused approach to improve road infrastructure in the North Eastern Region of India. In this vein, the Government of Assam is consulting with the Ministry of Road Transport & Highways to draw a roadmap for construction of an international highway connecting India with Bhutan through Bodoland Territorial Autonomous Districts.

� Overseas Investment

• The Government has received funding support from public sector undertakings of Malaysia and Japan for some of the proposed highway projects in India.

• 100% FDI is allowed under automatic route subject to applicable laws and regulations.

� Development of Highways

• The Ministry has launched a 7 phase programme, ‘National Highways Development Project’ vested with National Highway Authority of India for developing transport infrastructure of the country.

� Infrastructure Developmental Initiatives

• The Government has proposed to upgrade 2 lane national highways into 4 lane for which USD 65 billion has been allocated.

• Boost to rural connectivity through programmes like ‘Bharat Nirman’ amongst others.

• Bharat Mala project aims to construct 25,000 km of roads by 2022 along India’s borders, coastal areas, ports, religious and tourist places as well as over 100 district headquarters.

• Plan to set up comprehensive wayside amenities along the National Highways network across the country for both car & bus passengers and heavy vehicle drivers.

2.5. Ministry of Railways

The mammoth Indian Railways is the largest rail network (115,000 km) in Asia and the second largest in the world operated under single management. It operates 12,617 trains to carry over 30 million passenger’s daily connecting more than 7,172 stations. Thus Indian Railways plays a pivotal role in Tourism sector for enhancing tourism connectivity.

The Ministry of Railways has allocated ` 131,000 crore for FY 2017-18, a raise of 8.26% over previous year in the Union Budget. This budget allocation will be mostly spent towards improving customer service, safety, expanding network and achieving financial sustainability. Between FY14 and FY18, the budget allocation witnessed a CAGR of 15.63%.

33 https://www.ibef.org/industry/roads-india.aspx; http://pib.nic.in/newsite/PrintRelease.aspx?relid=155892

Investment in Tourism Infrastructure Igniting India’s Growth Engine 29 Figure 9: Railway Budget Allocation

140000 131000 121000 120000 100011 100000

80000 63363

` C r o e 60000 47650

40000

20000

0 FY14 FY15 FY16 FY17 FY18

Source: http://www.indianrailways.gov.in/

The Ministry of Railways has undertaken a wide range of initiatives designed to encourage investments. Key initiatives that will be instrumental in spurring tourism growth are as follows:

� Solutions for better customer experience34

• Station based e-catering service has been extended to 408 stations

• Free Wi-Fi availability at 100 railway stations

• Utilizing PPP models to redevelop and modernize 23 stations across the country. Railways has also initiated collaboration with private sector for O&M of stations. Rope in private companies to redevelop and modernize 23 stations.

• Introduced 24 hr helpline number 1322 for passengers

• Launched mobile ticketing services, which enable customers to receive tickets on Short Message Service (SMS). Further, work is under progress to launch an integrated mobile application offering all travel related services such as hiring taxis, pre-ordering a meal, porter services and lodging at a retiring room amongst others

� Tourist Trains35

• Launched ‘Astha Circuit Tourist Train’ in 2017 that operates from Guwahati and covers shrines in Odisha and West Bengal to promote religious tourism in the country

• Proposed to operate tourist trains in various Pilgrim circuits like Devi Circuit, Jyotirling Circuit, Jain Circuit, Christian Circuit, Muslim/Sufi Circuit, Sikh Circuit, Buddhist Circuit, Famous Temple Circuit etc.

� High Speed trains36

• Indian Railways is collaborating with Russian Railways to work on a 575km long stretch between Secunderabad and Nagpur which will allow the trains to run at more than 200 Km/ Hr

34 http://pib.nic.in/newsite/PrintRelease.aspx?relid=136764 35 https://www.ibef.org/industry/indian-railways.aspx 36 http://pib.nic.in/newsite/PrintRelease.aspx?relid=161991

Investment in Tourism Infrastructure 30 Igniting India’s Growth Engine • After the successful trial of Spanish made Talgo train, Indian Railways is planning to introduce light - weight aluminum coaches in the railway network by early 2018 to reduce travelling time between metropolises • Semi high - speed trains to be operational along the golden quadrilateral • Indian Railways has launched semi high - speed Tejas Express on May 22, 2017 from Mumbai to Goa. The train is equipped with modern facilities such as CCTV cameras, smoke and fire detection systems, automatic doors, bio-vaccum toilets, water level indicators, tap sensors, and hand dryers amongst others � International Collaboration • Indian Railways and UNESCO signed an agreement in 2017 for setting up a railway network between neighboring countries like Bhutan, Nepal, Bangladesh and Myanmar � Encouragement to Foreign Investment

• Government has allowed 100% FDI in the railway sector

2.6. Ministry of Environment, Forest & Climate Change

While Tourism sector in India is on a high growth trajectory, it is most imperative to work on solutions that will minimize the ecological threats and climate changes associated with direct and indirect impact of tourism. In this vein, the Ministry of Environment, Forest & Climate Change (MoEFCC) plays a pivotal role in sustainable tourism development through various policies and developmental initiatives. Recognizing the importance of Environment & Forest, the Government has provided a budget outlay of ` 2,675.42 crore which is an increase of 18.89% over previous year.

Figure 10: Union Budget Allocation for Ministry of Environment, Forest & Climate Change

3000 2675.42

2500 2250.34 2040 2,043 2000 1681.6

1500 ` c r o e 1000

500

0 FY14 FY15 FY16 FY17 FY18

Source: http://indiabudget.nic.in/

The Ministry with its strong emphasis on environmental sustainability has laid out a number of initiatives37 to transform the tourism sector as highlighted in the section below. � Policy Support • Introduced online submission of applications for approval of Environmental, Coastal Regulation Zone (CRZ) and Forest clearances to ensure transparency • Introduced guidelines for ecotourism projects in forest areas with the objective of preservation and management of forests • Promotion of ecotourism and participatory eco-development model for local communities

37 http://envfor.nic.in/

Investment in Tourism Infrastructure Igniting India’s Growth Engine 31 • Identified 275 Eco-Sensitive zones around National and Wildlife Sanctuaries across the country

� Green India Mission

• More than 130 countries have committed to work together to chart out a pathway for a low carbon economic future at Paris in the 21st Conference of the Parties (COP21). India aims to tackle climate change through Green India Mission with the vision of upping India’s tree cover to 33% by 2022

� Empowerment of States

• The power to decide all cases of reforestation below 40 hectares has been delegated to States which will be decided by Regional Empowered Committees

� Island Management Plan

• Prepared the Integrated Islands Management Plans for 10 islands of Lakshadweep

� International Cooperation

• Agreement with 21 countries including Norway, Sweden, France, Canada, Bangladesh, Brazil and Russia on various environmental issues of mutual benefits.

2.7. Ministry of External Affairs38

� Ministry of External Affairs plays an important role in promoting inbound tourism. Embassies across the world promote various tourist destinations of the Country. The Ministry organizes Pravasi Bhartiya Divas on 9th of January every year at different parts of India to provide a platform to the overseas Indian community to engage with the government and people from the land of their ancestors for mutually beneficial activities.

� Kailash Manasarovar Yatra is known for its religious value, cultural significance, physical beauty and thrilling nature. The Yatra is organized by the Ministry of External Affairs every year between June and September.

� Flagship publication “India Perspectives” provides an insight into India’s culture and tradition along with elements of contemporary India.

� The Ministry has extended the window for application for e-visa from 30 days to 120 days and duration of stay from 30 days to 60 days, with double entry on e-Tourist and e-Business visa and triple entry on e-Medical visa. Further, e-visa will be provided at 5 major Indian Ports to tap the potential of cruise tourism.

2.8. Ministry of Culture39

� Ministry of Culture plays an imperative role in preservation and promotion of Indian cultural heritage. The Ministry has launched ‘Project Mausam’ with the objective to revive lost linkages with nations, creating links to World Heritage Sites, redefining cultural landscapes and achieving transnational nomination under World Heritage.

38 http://www.mea.gov.in/ 39 http://www.indiaculture.nic.in/

Investment in Tourism Infrastructure 32 Igniting India’s Growth Engine The Ministry has organized various cultural festivals, programmes, seminars and workshops in various parts of the country. A plan has been drawn for holding a cultural festival namely, ‘Octave’ highlighting the rich cultural heritage of the North Eastern States in various parts of the country.

Festivals of India have been organized in Mauritius, Myanmar, Hungary, Spain, Italy, Morocco, Australia, Egypt, Kazakhstan, Kyrgyzstan, Kenya, Tanzania, Oman, Senegal, Ghana, Cambodia, Netherlands and Ukraine to promote Indian artists abroad and strengthen bilateral exchange.

The process to have a web based E-Ticketing platform for ASI ticketed monuments has been initiated. Further, the Ministry has introduced Virtual museums, sanskriti mobile app to facilitate tourist engagement.

Archaeological Survey of India has identified 100 monuments as ADARSH Smarak for providing facilities such as toilets, drinking water, Wi-Fi services, cafeteria, and interpretation centers amongst others.

Investment in Tourism Infrastructure Igniting India’s Growth Engine 33 Investment in Tourism Infrastructure 34 Igniting India’s Growth Engine 3. Key Initiatives of Leading States in Promoting Tourism

Investment in Tourism Infrastructure Igniting India’s Growth Engine 35 3. Key Initiatives of Leading States in Promoting Tourism

3.1 Madhya Pradesh

Madhya Pradesh is located in central India covering 308,000 sq.km area. The state is surrounded by Uttar Pradesh in North, Chhattisgarh in East, Maharashtra in South, Gujarat and Rajasthan in west. The state has 72.6 million population with 51 districts. Bhopal, Indore, Gwalior, Jabalpur and Ujjain are some of the major cities in the state. GSDP of Madhya Pradesh grew at a compound annual growth rate (CAGR) of 11.86% during 2005-06 to 2015-16.40

Strategic Advantage Madhya Pradesh

� Location: The state is centrally located in India. Major locations can 6 9 be accessed from all the major cities Tiger reserves National Parks in India such as New Delhi (740 km), Mumbai (780 km), Kolkata (1,350 th km) & Chennai (1,435 km) 5 Rank 382 In EASE OF DOING Tourist sites in MP � Diversified tourism products: BUSINESS Madhya Pradesh boasts of rich ancient cultural & religious heritage. Immense potential Due to a thick forest cover, the state 3 for wild life, adventure & has immense potential for wild life, UNESCO World Heritage Sites ecotourism adventure & ecotourism.

40 Government of Madhya Pradesh website, National Informatics Centre Madhya Pradesh

Investment in Tourism Infrastructure 36 Igniting India’s Growth Engine Tourism profile

Madhya Pradesh (MP) is considered as the heart of “Incredible India”, and is rapidly becoming a preferred tourist destination in India. MP has rich cultural heritage with 9 National Parks, 25 Sanctuaries, 6 project tiger reserves, 2 Shiva Jyotirlingas and 3 UNESCO World Heritage Sites. The State is home to a innumerable monuments, large plateau, mountain ranges, rivers and miles of dense forests offering an unparalleled panorama of wildlife in sylvan surroundings. The state’s Hindu and Jain temples at Khajuraho are renowned for their carvings most prominently Kandariya Mahadeva, a temple with more than 800 sculptures.

Madhya Pradesh has registered 93% growth rate in domestic tourist visits in 2016 from 2015 levels and has contributed 9.2% of the total tourists arrivals in India during 2016. The state has improved its rank from 7th in 2015 to rank 4th in 2016 in terms of domestic tourist visits.41

Figure 11: Foreign and domestic tourist visits in Madhya Pradesh (2012 - 16)

Domestic Tourism Visits (In millions) Foreign Tourist Visits (in Millions)

1600 150.49 1400 1200 i s t

V 77.97 1000 i s t 5 0.42 63.1 63.6 V 0.36 800 53.2 4 0.32 600 u i s t 3 0.28 0.28 o r T D o m e s t i c 400 2 200 1 o r e i g n

0 F 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Year Year

Major tourism circuits

The following four tourist circuits have been identified in the state of Madhya Pradesh: • Gwalior - Shivpuri - Orchha - Khajuraho • Indore - Ujjain - Maheshwar - Omkareshware - Mandu • Jabalpur - Bhedaghat - Mandla - Kanha - Bandhavgarh • Bhopal - Sanchi - Bhojpur - Bhimbetka – Panchmarhi

Mega projects

• The Ministry of Tourism has included Chitrakoot as one of the 35 mega tourist centres sanctioned to be developed. Chitrakoot will be developed as a spiritual & wellness destination. The destination will be developed as a part of the Ramayana Circuit. The government has allocated ` 69.45 crore for development of this circuit.

• Destinations being developed into major tourist spots: Ujjain, Chanderi, Khandwa, Indore (Mega Destination), Jabua, Alirajpur and Gwalior.

41 http://tourism.gov.in/sites/default/files/Other/DTVs_And_FTVs_2015__16.pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 37 Infrastructure assessment

Connectivity

Air Roads Railways

• Madhya Pradesh State • Roads play a vital role • Madhya Pradesh has is well linked through in transportation. As of around 4,954 km of railway flight from major 2015-16, the state had lines and the state is tourist destinations 5,193 km of National connected to different and cities of India like highways, 19,574 km states of the country Delhi, Mumbai, Pune, of major District roads through trains which travel Nagpur, Hyderabad, and 10,859 km of State on daily basis. Presently, Vishakhapatnam, highways. the state of Madhya Bangalore, Srinagar, • Under Prime Minister Pradesh has more than 723 Ahmedabad etc. Graamin Sadak Yojana, major and minor railway during 2016-17, the state stations. • Major airports in Madhya government has set a • The state has 20 major Pradesh state are located target of constructing railway junctions as well as in Bhopal, Indore, around 2,000 km of 18 minor railway junctions. Gwalior, Jabalpur and roads in the state. There are over 86 trains Khajuraho. • Tourist destinations like that connect the state with Gwalior, Indore, Sanchi, the rest of India. 6 new Agra, Jaipur, Khajuraho, trains will be inaugurated Mandu and Nagpur can soon. “Maharaja Express” be easily accessed by is a luxury tourist train road from the state which passes through the capital Bhopal.14 NH7, state connecting Gwalior, NH75, NH12, NH26 Khajuraho and Umaria and NH59 are among (Bandhavgarh). the major highways in • In February 2015, the Madhya Pradesh. state government affirmed the constitution of Madhya Pradesh Metro Rail Company for the advancement of light metro projects in Bhopal and Indore.

Accommodation

State offer adequate accommodation facilities spread across jungles, heritage sites, pilgrim sites and hill stations. All four luxury safari lodges of Taj Group are located with world class facilities in the state. There are 13 heritage hotels with best star ratings in Orchha, Gwalior, Maheshwar and Bhopal.

Investment in Tourism Infrastructure 38 Igniting India’s Growth Engine There are a total of over 1,300 hotels in the State of Madhya Pradesh with 5-star category hotels in Gwalior, Indore and Bhopal. The accommodation profile in the state is given below.

Table 6: Accommodation in Madhya Pradesh

Category of hotels Number of hotels 5 star deluxe 5 5 star 3 4 star 4 3 star 20 2 star 9 1 star 8 Non star hotels 1,142 Dharamshalas 49 Others 89 Total 1,329

Source: Annual Tourism Survey, 2011-12

Government Policy and Initatives

Vision for Tourism sector

“Make the state a world class tourist destination” & “Promote religious, adventure and heritage tourism & attract private”

Madhya Pradesh Vision 2018

Madhya Pradesh has designed its Vision 2018 providing strategy for development of each sector.

Anubhuti 2017

Madhya Pradesh Eco Tourism Development Board has started an initiative, Anubhuti 2017, to senzitise students about eco tourism. As a part of this initiative, 53,935 students visited eco tourism zones from December 2016-January 2017.

Madhya Pradesh Tourism Policy 2016

Madhya Pradesh has developed Tourism Policy 2016 which focuses mainly on

• Establishing effective institutional mechanism to promote private investment in tourism sector and development of tourism based projects through Public Private Partnership (PPP) mode.

• Promoting sustainable tourism with focus on conservation of heritage sites and sensitizing people about environmental conservation through development of eco tourism sites

Madhya Pradesh State Tourism Development Corporation (MPSTDC) is the nodal agency for implementation of tourism policy. They have established investment promotion and planning division in MPSTDC for investor facilitation, providing subsidies and monitoring tourism projects. The highlights of the policy are explained below:

Investment in Tourism Infrastructure Igniting India’s Growth Engine 39 Table 7: Fiscal incentives in Mdhya pradesh tourism policy 2016

1. Fiscal incentives:

Subsidy Scheme Minimum Percentage of Maximum Project Subsidy against ceiling of S.No Expenditure Fixed Capital Subsidy (` in Lakhs) Investment (` in lac) Capital subsidy for Heritage 300 15% 200 1 Hotel under Proprietorship42 Capital Investment subsidy for 1,000 15% 500 establishment of Heritage Hotel 2 where the Heritage Assets are obtained from Tourism Department on Lease43 Capital Investment subsidy 1,000 15% 500 to establish a new Deluxe/Three 3 Star or Higher category new Hotel and Resort44 Capital Investment subsidy for 200 15% 50 4 establishment of new Hotel of Standard category45 Capital Investment subsidy for 500 15% 200 establishment of new Resort and 5 Wellness Centre (Including Resort equipped with Ayurvedic, Yoga and Naturopathic treatment) Capital Investment Subsidy for 100 15% 500 expansion of established Star / 6 Delux /Standard Hotel/ Resort/ Heritage Hotel46 Capital Investment Subsidy for 2,000 15% 1000 establishment of 500 or more 7 seater convention centre as above cum Hotel under MICE47 Capital Investment Subsidy for 300 15% 500 creation of infrastructure along with installation of equipment 8 to establish Film Studio, Film making, Museum, Aquarium, Theme Park

42 Subsidy shall be payable after the operation of constructed Heritage Hotel for one year, subject to submission of Certificate obtained from HRACC (Hotel and Restaurant Approval and Classifications Committee) as a Heritage Hotel 43 Subsidy shall be payable after the operation of constructed Heritage Hotel for one year, subject to submission of Certificate obtained from HRACC (Hotel and Restaurant Approval and Classifications Committee) as a Heritage Hotel 44 Minimum 50 rentable air-conditioned rooms should be available. 45 Minimum 25 rentable air-conditioned rooms should be available. 46 Expansion in terms of minimum 50% increase in staying capacity will only be eligible for subsidy 47 Project must be established in such a way as to conform to the criteria/standards laid down by Government of India for convention centre. Seating capacity of main convention hall taken alone should be 500 or more Investment in Tourism Infrastructure 40 Igniting India’s Growth Engine Capital Investment subsidy for 100 15% 300 creation of infrastructure and installation of permanent facility/ acquisition of equipment/facilities to establish Adventure Tourism, 10 Water Tourism, Water Sports, Cruise/House boat, Navigation infrastructure, Amusement Park, Sound and Light show, Laser show, Camping (including tents)48 Capital Investment subsidy 50% 15% 20 for establishment of wayside 11 Amenities under Green Field/ Franchise Model49 Capital Investment subsidy for 100 25% 300 creation of infrastructure such as power supply, water supply, approach road, sewage and 12 drainage system on land and heritage assets obtained from Tourism Department on lease basis Installation of Ropeway 100 40% 500 infrastructure for transport in 13 inaccessible tourist places/ forest areas.

2. Promotion of tourism infrastructure: Government of Madhya Pradesh has provided tourism projects with facilities on par with industries department such as:

• Power provided at industrial tariff

• Water Resource department shall allow the consumption of water from its sources on industrial rate; local bodies shall charge property tax/development charge on building constructed as per industrial rate

Apart from above, Government of Madhya Pradesh is planning to build high quality tourist facilities on National / State Highways at approximately every 40-50 km distance under “Wayside Amenities Establishment and Operation Policy, 2016”

For heritage hotels: To promote heritage hotels across Madhya Pradesh the following benefits are provided to developers:

• Exemption of registration and stamp duties for Heritage hotels for built up area and for appurtenant land less than 1 hectare

• Disposal of Government land/lands with heritage assets to private investor for establishment of tourism projects, shall be made by Madhya Pradesh State Tourism Development Corporation through an open bidding process

For Eco-Adventure Tourism: Tourism Department can offer land on lease or license. In general, period of License granted will not be less than 5 years and more than 15 years

48 Installation of permanent facility/ infrastructure shall mean creating/ installing platform/ Jetty/ equipments, parking sites/ electricity facility/ water supply etc. and public amenities. 49 Units established and operated as per Departments way side Amenities Policy 2016 only will be eligible

Investment in Tourism Infrastructure Igniting India’s Growth Engine 41 For water based tourism: Tourism department shall have the authority to undertake tourism activities in the water bodies under jurisdiction of Narmada Valley Development Authority, Water resources Department and State Government. Tourism department shall take necessary steps for comprehensive tourism planning and infrastructure development of areas suitable for water based tourism.

3. Investor facilitation: For Investment Promotion in Tourism, MPSTDC shall work in tandem with MPTRIFAC (Madhya Pradesh Trade & Investment Facilitation Corporation). Further, Tourism Department shall co-ordinate with these all the relevant Departments of the State to obtain the legal mandatory permissions needed for film producers for local level shooting.

4. Tourism marketing and promotion: Government of Madhya Pradesh has a special focus in developing sustainable tourism, week end tourism and film based tourism. These special incentives are explained below

• Sustainable Tourism: The development and management of tourism destinations shall be done by Government in a manner that effective conservation of environment, natural resources, local traditions, culture and products is taken care.

• Week-end Tourism: To attract domestic tourists from other states and to encourage weekend tourism, resources will be given to District Tourism Promotion Councils for enhancing and upgrading the tourist facilities as per the expectations of tourists.

• Film Tourism: In order to promote film shooting in Madhya Pradesh and to ease out the approval process Tourism Department shall co-ordinate with all the relevant Departments of the State to obtain the legal mandatory permissions required for film producers for shooting at local location.

Further, the Government has instituted special framework for tourism promotion at state level by establishing State Tourism Promotion Council (STPC) and at district level by District Tourism Promotion Council (DTPC). The state level tourism promotion council will play a crucial role of attracting private investors and managing destinations at local level. DTPC shall promote cultural and tourism centric events at District level.

5. Employment oriented skill development, education and training for youth: To ensure employment oriented skill development in the tourism sector youth of Madhya Pradesh will be educated and trained in trades relevant to the tourism industry through State Institute of Hospitality Management (SIHM), Madhya Pradesh Institute of Hospitality Training (MPIHT) and Food Craft Institute (FCI).

3.2 Andhra Pradesh

Economic Profile

With a geographical area of 1,62,970 sq km, Andhra Pradesh ranks as the 8th largest State in the country. Situated in a tropical region, the state has the 2nd longest coastline in the country with a length of 974 km. The state has 13 districts with population of 49.58 Million. The major cities in the state are Amaravati (Capital), Vijayawada, Guntur, Vishakhapatnam, Tirupati.

Investment in Tourism Infrastructure 42 Igniting India’s Growth Engine State Tourism Profile

Andhra Pradesh has been one of the highest visited states in the country. In 2016, the new state of Andhra Pradesh AP was the ranked 3rd most visited state in the country by domestic tourists and accounting for 9.4% share to total domestic arrivals in India. Andhra Pradesh registered a growth of about 25.97% in domestic tourist visits and 43.69% increase in foreign tourist visits in 2016.

Figure 12: Foreign and domestic tourist visits in Andhra Pradesh (2014-16)

Domestic Tourists Visits Foreign Tourists Visits

200.00 4 0.342 153.16 150.00 3 121.59 0.238 100.00 93.30 2 i n M l o s I n M i l o s 50.00 1 0.066

0.00 0 2014 2015 2016 2014 2015 2016 Year Year

Strategic Advantage

• Andhra Pradesh is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine and hospitable people

• Longest coast line of 974 km with a lot of potential for development of tourism products such as beach resorts, water sports etc

State Government plans for 60 Tourism projects 974 km – 20 hotels, 7 resorts, 10 wayside amenities, Longest coast line with potential for 13 beach front projects, 4 Family entertainment development of beach resorts, water centers and 5 MICE convention centers. sports etc

26% 2nd Ranked 1st in Increase in domestic tourist Largest stretch of mangroves Ease of Doing Business arrivals i.e. 153 Million in 2016 in India - Coringa wild life ranking by World Bank’s EoDB sanctuary 2016

Investment in Tourism Infrastructure Igniting India’s Growth Engine 43 Infrastructure Assessment Accessibility

Air Road Rail The state currently Roads play a vital role The state is well connected through has one international in tourism sector. As of the rail network i.e. 2,660 km. airport at Vizag and other 2015-16, the state had Visakhapatnam, the largest city in operational airports at 5293 km of National the state, has rail accessibility to Vijayawada, Tirupati, highways, 31,596 km nine district headquarters out of 13 Kadapa, Rajamundry and of major District roads in the new state. The city is also well Donakonda. and 15,406 km of State connected to the neighbouring states highways. of Odisha and Chhattisgarh.

State Government Initiatives

• Policy Initiatives: Andhra Pradesh Government provides incentives to encourage investments for Tourism sector in the State such as Complementary/ Linkage Infrastructure Development Assistance, Waiver of Land Conversion Charges, Reimbursement of Registration and Stamp duty, Rebate in SGST, Industry status for Tourism Infrastructure Projects and more.

• Land Lease Policy: Apart from the incentives and exemptions under the Andhra Pradesh Tourism Policy 2015-20, the state also provides assistance for provision of land for Tourism Infrastructure development under PPP mode. A transparent bidding process shall be undertaken to select a developer for the various projects under the PPP mode for allotment of land.

• Indian Culinary Institute, Tirupati: The Ministry of Tourism has set up the Indian Culinary Institute (ICI) at Tirupati, Andhra Pradesh. The first of its kind in India, the Institute has commenced its academic session from August, 2016.50

• Formation of Andhra Pradesh Tourism Authority: Andhra Pradesh Tourism, Culture and Heritage Board has been formed to give impetus to the tourism sector in the state. The proposed Board will be chaired by the Chief Minister and cabinet members will be vice-chairmen of the board. It will have a state-level committee and an executive committee.51

50 Annual Report 2016-17, Ministry of Tourism, Government of India 51 G.O.MS.No. 26, dated: 6th December 2016, Government of Andhra Pradesh

Investment in Tourism Infrastructure 44 Igniting India’s Growth Engine 3.3 Uttarakhand

State Economic Profile

Uttarakhand, the 27th state of India, also known as ‘Dev Bhoomi’ has a total area of 53,483 sq km of which around 86% area is mountainous and 68.4% is covered under forest.52 The State has a total population of 10,116,752 (Census 2011) with a density of 189 persons/sq.km. The economy of the State has been largely dominated by the services sector including Tourism which contributed over 40.44% to the total GSDP in 2015-16.

State Tourism Profile

The state is situated in the foothills of Himalayas. The presence of several hill stations, wildlife parks, pilgrimage places & trekking routes makes Uttarakhand an attractive tourist destination. Inflow of foreign tourists visits into the state increased by 10.6% from 0.106 mn in 2015 to 0.117 mn in 2016. It’s been forecast that tourist visits to increase by 2.5 times in next 10 years to 66 million in 2026.

Figure 13: Tourism Trends in Uttarakhand from 2005-16

35.0 40% 34% 33% 3.5% 30.0 30% 30.6 19% 29.6 25.0 31.1 28.4 20% 14% 26.8 10% 23.3 10% 20.0 22.3 23.2 6% 22.1 19.5 4% 0% 20.0 0% 15.0 16.4 -10% -14% 10.0 -20% 5.0 -30% -30% 0.0 -40% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Tourist Visits (Million) Growth Rate Source: Ministry of Tourism, YES BANK Analysis

52 uttarakhandtourism.gov.in

Investment in Tourism Infrastructure Igniting India’s Growth Engine 45 The negative growth trend in graph is subject to fact that the State witnessed devastating floods and landslides that resulted in a significant decline in tourist arrivals. However since then, the state has regained its momentum and witnessed positive growth in total tourist arrivals.

Existing Under Development

• Haridwar - Rishikesh - Muni- Ki- Reti • Ministry of Tourism has sanctioned 01 project under • Dehradun – Musoorie – Dhanaulti – Kanatal – the Swadesh Darshan Rishikesh – Haridwar - Dehradun scheme for integrated development of Heritage • Corbett – Nainital - Corbett Circuit in Kumaon Region – Katarmal – Jogeshwar – • AdiBadri – Simli – Karyprayag – Chamoli – Baijnath - Devidhura with Pipalkoti –Urgam – VradhBadri – Joshimath - sanctioned amount of ` 81.94 Bhavishya Badri - Yogdhyan Badri (Pandukeshwar) crore. – Tapovan – Malari - Niti village • Integrated Development of • Nankmatta – Tanakpur – Purnagiri – Champawat Badrinath and Kedarnath has – Lohaghat – AbbotMount – Pithoragarh - Jaul been selected for tourism Jibi - Madkot – Munsiyari – Shyama – Kamkot – infrastructure development Bageshwar –Takula - Almora under PRASAD scheme.

Infrastructure assessment Uttarakhand has a strong social and industrial infrastructure, virtual connectivity with over 39,000 km of road network, two domestic airports, 345.23 km of rail routes and an installed power capacity of 3,177.27 MW of which Hydropower generation capacity is about 2,441.82 MW (upto Nov 2015).

Air Rail Road • At present, Dehradun • As of 2015-16, • Uttrakhand has 39,000+ and Pantnagar have Uttarakhand had Km of roads domestic scheduled flight 345.23 km of rail • Recently central operations. Dehradun routes. Government has has a Domestic Terminal • The state is focusing announced Chardham with regular and on increasing the share Mahamarg Vikas good air connectivity of railways in cargo and Pariyojna which aims while Pantnagar has passenger transport at improving the limited Domestic while initiatives have connectivity to the Char air connectivity. It is been undertaken to Dham pilgrimage centres proposed to enhance start monorails at in Uttrakhand including the number of flights to Dehradun, Haridwar developent 900 km of Pantnagar airport. and Rishikesh, on national highways at a • With Uttarakhand the inter-city linkage total cost of ` 12,000 emerging as a hot tourist routes. crore. and industrial destination, • In 2016, the • Further to reduce the the state government is Government of distance between focusing on upgrading Uttarakhand inked a Kumaon & Garhwal, the the Jolly Grant airport as pact with the Delhi Kandi road project was an international airport, Metro Rail Corporation announced in March and has proposed the for introducing metro 2017 which will pass construction of at least rail in the state. through the famous one helipad per district. Corbett National Park.

Source: IBEF – Uttrakhand May 2017 and http://pib.nic.in/newsite/PrintRelease.aspx?relid=155788

Investment in Tourism Infrastructure 46 Igniting India’s Growth Engine Accommodation

The State offers various categories of accommodation facilities for different types of tourists ranging from Luxury to budget hotels. As per Ministry of Tourism, there are 3 approved hotels in the state namely a 3 star hotel, Hotel 1589 Le Castle in Rudrapur, a 4 star hotel, Hotel Pacific in Dehradun and a 5 star deluxe hotel, Jaypee Residency Manor in Mussourie. In addition to this the Ministry of Tourism recognizes 14 bread and breakfast units in the state.53 Three additional 5 star hotels at Dhanaulti, Narendra-nagar and Almora have been approved by the Ministry. A 3 star hotel at Nainital has also been approved recently by the Ministry of Tourism.54 The list of other accommodation facilities available in Uttarakhand is shown in the table below.

Table 8: Accommodation in Uttarakhand

Category No.of Hotels Hotels & Paying Guest Houses 4,220 Dharamshala 877 Tourist Rest Houses 159 Rain Basera (Night Shelters) 32

Source: http://www.ibef.org/download/Uttarakhand-May-2017.pdf

Initiatives by the State Government: Dynamic Business Environment

Various initiatives taken by state government to mobilize investment in Uttrakhand are:

• MSME Policy, 2015: The Government of Uttarakhand announced the implementation of single window clearance system in the MSME (medium, small and micro enterprises) policy introduced in 2015.

• Uttarakhand Film Policy-2015: The Uttarakhand state government introduced Uttarakhand Film Policy in October 2015, which aims at offering single window clearance or hassle free clearance to the requests or applications for shooting, tourism promotion, etc. For instance, the policy along with implementation of such mechanisms is expected to offer ease to the citizens and also generate employment opportunities.

• Mega Industrial and Investment Policy 2015

o To provide assistance to dairy and textile processing units in the state of Uttarakhand

o To promote the textile industry of Uttarakhand through provision of subsidies and rebates on power bills

• Ease of Doing Business Initiatives: To increase investment attractiveness of the State, Uttrakhand Government has taken various initiatives to improve its Ease of Doing Business position and is lead state in following parameters:

o Rank 1 in Availability of Land

o Rank 2 in Environmental registration enablers

o Rank 3 in Online tax return filling and in Access to information and Transparency enablers

o Rank 4 in labor regulation enablers

53 Ministry of Tourism – India Tourism Statistics 2015 54 http://tourismpmis.nic.in/Scripts/InterfaceReport/Hotel/ApprovedHotelsList.aspx

Investment in Tourism Infrastructure Igniting India’s Growth Engine 47 • Tourism Policy: Uttarakhand Tourism Policy, is being drafted by State Government, with vision ‘To create a world class tourist destination which is safe, sustainable and inclusive leaving a mark of peace and tranquillity’

Table 9: Incentives offered under draft Uttarakhand Tourism Policy 2016

• Aggressive Incentives and Subsidies to attract investments

Fiscal • It is being proposed that all fiscal benefits as provided in Mega Industrial Incentives and Investment Policy, 2015 and MSME Policy, 2015 for the Tourism Sector Enterprises shall be available to the eligible Tourism Units • Human resource development to ensure higher employability of youth and women in the tourism sector Skill • All registered Tourism Units will directly become training partners under the Development Employment Linked Skill Training Program

• To ascertain skill and capacity building for tourism sector workforce • Focused campaign on highlighting Uttrakhand as a favored tourism destination targeting round the year tourism

Marketing & • Promote awareness about the lesser known destinations of the State Branding • Promotion of Tourism oriented Handicrafts Industry and Cuisine

• Focus on Gramin Paryatan Uthan Yojana • To create and develop unique tourism products offering unmatched experience Product catering to various tourist segments Development • Promotion of theme based tourism: Rural Tourism, Homestays for local communities, Film Tourism, Adventure Tourism, Yoga Tourism • Development of new tourism circuits

• Augmentation of Pilgrimage (Yatra) infrastructure Tourism • Star Category Accommodation Infrastructure Development • World Class Yoga and Wellness Centres facilities

• Suitable land parcels to be developed with PPP projects for tourism on new theme based criterion • The Single Window Clearance System was formed as a consequence to ‘The Uttarakhand Enterprises Single Window Facilitation and Clearance Act 2012’ to provide necessary time bound license, permissions and sanctions for the establishment of industry in the State of Uttarakhand Single Window Clearance • Investor friendly PPP approval process

• Ease of Doing business - Transparent short and easy sanctioning of projects

• In April 2017, UTDB became 1st e-office • Follow sustainable tourism development principles and adhere to carrying Responsible capacity of destinations Tourism • Promote Inclusive Tourism strategies through community based tourism ensuring equitable sharing of benefits to the local communities

Source: Draft Uttrakhand Tourism Policy

Investment in Tourism Infrastructure 48 Igniting India’s Growth Engine 3.4 Rajasthan

State Economic Profile

Covering 342,239 sq. km, Rajasthan is the largest state in India which boasts of having the only desert of the subcontinent, namely the Great Indian Desert in combination with the Aravali mountain range. Rajasthan has population of 68.6 million and geographical area divided into 33 districts with Jaipur as capital city. The economy of the State has been largely dominated by the services sector which contributed over 48% to the total GSDP of 2015-16 at current prices and has reported fastest growth with CAGR of 17.3% between 2004-05 to 2015-16.

Strategic Advantage

• Diverse Tourism Offerings – The state offers diverse themes, products and experiences for tourists from across the globe, which include:

Table 10: Monuments & 1 Natural Site listed as UNESCO World Heritage Sites

16+ Renowned Forts 9+ Wildlife Sanctuaries 60+ Popular Religious Sites 30+ Palaces and Painted 15+ Museums 18+ Lakes Havelis Heritage Stay Luxury Trains Desert & Adventure tourism Vibrant Fairs & Festivals Colorful Art & Crafts Intriguing Folk Dance & Music

• Focus on Tourism in State budget – ` 163.51 crore has been allocated for tourism development in the State Budget 2017-1855 of which ` 88 crore earmarked for aggressive marketing, and ` 36 crore allocated for basic infra, conservation, beautification and renovation works at various tourist places in the State.56

Strategic Location 13.4% Best Cultural Destination (State is located in the Tourism contribution to State Lonely Planet Magazine India elementary location of Golden GSDP in 2015 Travel Awards in 2016 Triangle circuit)

5th 73% 6th Rank among global Luxury of India’s Heritage Hotels are World Bank’s EoDB 2016 trains (Readers’ Travel Award located in Rajasthan57 ranking59 58 2015) Excellent Tourism Ease of Doing Business Excellent Connectivity Infrastructure

55 Budget at Glance 2017-18, Finance Department, Government of Rajasthan (http://finance.rajasthan.gov.in/) 56 Press Note on Budget 2017-18, Finance Department, Government of Rajasthan (http://finance.rajasthan.gov.in/) 57 https://www.indianembassy.ru/downloads/economic/Rajasthan_is_Ready.pdf 58 https://www.indianembassy.ru/downloads/economic/Rajasthan_is_Ready.pdf 59 http://eodb.dipp.gov.in/

Investment in Tourism Infrastructure Igniting India’s Growth Engine 49 State Tourism Profile Figure 13: Percentage of Domestic tourists visiting Rajasthan and other states (2016) Tourism has been one of the biggest revenue Rajasthan generators for the state for a long time. According 6.12% to the Ministry of Tourism, Rajasthan accounted for 6.12% of total foreign tourists’ arrival in India in 2016. Foreign tourist visits in Rajasthan were India recorded at 1.51 million in 2016 with an increase 93.88% of 2.6% over 1.47 million in 2015.

Further, Rajasthan has registered a growth of 17.9% in domestic tourist visits with around 41.5 million domestic tourists visiting Rajasthan in 201660 while 35.18 million domestic tourists visited Rajasthan in 2015.61

Figure 14: Foreign and domestic tourist visits in Rajasthan (2010-16)

Foreign Tourist Visits Domestic Tourism Visits 41.49 1.51 1.5 1.47 40 35.18 1.45 30 1.4 25.54 1.35 20 1.3 1.28 I n M i l o s I n M i l o s 1.25 10 1.2 1.15 0 2010 2015 2016 2010 2015 2016

Development of Tourist Circuits Key Circuits under Development Under various schemes of Government of India following circuits are under development in the State, which include: • Ministry of Tourism has sanctioned 01 project under the Swadesh Darshan scheme for development of Sambhar Lake Town and other Destinations under Desert Circuit “Jaipur- Ajmer-Sambhar” with sanctioned amount of ` 63.96 crore. • Ajmer has been selected under HRIDAY scheme with sanctioned outlay of ` 40.04 crore to preserve and rejuvenate the rich cultural heritage of the city. • Integrated Development of Ajmer - Pushkar region has been selected for tourism infrastructure development under PRASAD scheme with sanctioned amount of ` 40.44 crore. • Krishna Circuit – Integrated Development of Govind Dev Ji temple (Jaipur), Khatu Shyam Ji (Sikar) and Nathdwara (Rajsamand) in Rajasthan for ` 91.45 crore under Swadesh Darshan scheme.62 Existing Circuits

Table 11: Tourist destination in various circuits in Rajasthan

Circuit Main tourist Locations Main Attractions/ Tourism Experience Jodhpur, Jaisalmer, Bikaner Sand dunes and desert experience, two unique Desert Circuit forts, palaces and carved Havelis Udaipur, Chittaurgarh, Leisure, history and Pilgrim centers Mewar Circuit Nathdwara, Kumbhalgarh Lakes, few forts and palaces

60 http://pib.nic.in/newsite/pmreleases.aspx?mincode=36 61 http://tourism.gov.in/sites/default/files/Other/India%20Tourism%20Book%20English.pdf 62 http://tourism.gov.in/annual-report-2016-17 Investment in Tourism Infrastructure 50 Igniting India’s Growth Engine Circuit Main tourist Locations Main Attractions/ Tourism Experience Dungarpur, Banswara Tribal culture, fairs and festivals, forts and palaces Vagad Circuit and nature tourism Mount Abu Leisure: Mount Abu, the only hill station in Ranakpur Rajasthan Godwar Circuit Pilgrim: Ranakpur, one of the five holy Jain places

Delwara temples, Nakki lake Jaipur Forts, palaces, havelis, gardens, Jantar Mantar Dhundhar Circuit Observatory Brij Bharatpur Nature/ Wild life tourism Mewat Circuit Sawai Madhopur Few forts, palaces and lakes Alwar Sariska Ajmer Pilgrimage (Dargah Sharif and Pushkar Lake) Merwara-Marwar Pushkar Shekhawati Sikar Frescos and painted havelis Circuit Jhunjhunu Kota Natural beauty, Hadoti Circuit Bundi Few forts, palaces and temples Jhalawar Source: Final Report on Perspective Plan for Tourism in Rajasthan, Ministry of Tourism, Art and Culture-Department of Tourism, Government of India

Infrastructure assessment Connectivity

Air Road Rail • One International Airport - • The state, as of 2015 • As of March 2016, Sanganer Airport located at has 208,341.8 km Rajasthan has a total Jaipur, connects Rajasthan of well-developed railway network spanning with major cities across network of roads that 5,870.38 km, of which globe. facilitate access to the 4,868.06 km was covered • Four operational Domestic main tourist hubs from under broad gauge, Airports located at within and outside 915.56 km under meter Jodhpur, Udaipur, Kota and the state and ease gauge and 86.76 km Jaisalmer while one airport movement within the under narrow gauge (km). at Bikaner is operational circuits. • The Government of under defense authorities. • Hubs such as Jaipur, Rajasthan has undertaken • AAI further plans to Jodhpur and Udaipur the development of open an airport at Sawai are connected to other a Metro Rail Urban Madhopur. An air cargo tourist places in the Transport Project in complex at Jaipur, and state through a well- Jaipur. Inland Container Depots developed network of (ICDs) at Jaipur, Jodhpur, roads. Bhilwara and Bhiwadi facilitate trade within and outside India.

Source: Rajasthan February 2017, IBEF

Investment in Tourism Infrastructure Igniting India’s Growth Engine 51 Accommodation

The state of Rajasthan offers wide variety of accommodation facilities to choose from including heritage hotels, Star hotels, budget hotels, hostels and guesthouses. Domestic and international hotel chains are also present in the state and offer accommodation primarily in the luxury category.

Table 12: Accommodation facilities in Rajasthan

Hotel Category No. of Hotels No. of Rooms 5 Star Deluxe 11 1,019 5 Star 6 612 4 Star 2 143 3 Star 22 1,369 2 Star 3 255 Heritage 21 797 B&B Establishment 12 60 Total 75 4,112

Source: Ministry of Tourism, Government of India

Thousands of new hotel rooms across categories and price points are needed to cater to the ever growing tourist influx. Looking at the increasing trend, it is estimated that foreign tourist arrival will increase to 2.5 million in next 3 years. With an estimated shortfall of 36,000 rooms by the year 2021, estimated additional number of hotels required by 202063 hence there is huge potential in development of tourist accommodation infrastructure in the State.

MICE (Meetings, Incentive, Conferencing & Exhibitions)

Meetings, Incentives, Conventions and Exhibitions (MICE) is one of the most exciting and fastest growing segment in travel trade. Trends indicate that travel agents, tour operators, hotel companies, cruise companies are all eyeing Rajasthan MICE market as one with great potential for future growth. The sheer size of this market and its tremendous capacity makes it both significant and lucrative. The princely state is best known destination for Wedding Tourism.

Initiatives by the State Government: Dynamic Business Environment

Rajasthan is one of the best ranked States in the Ease of Doing Business initiative of Government of India. The State has undertaken following key initiatives to facilitate investment in tourism sector.

• Tourism Unit Policy, 2015 - Attractive incentives for Tourism Sector development

• Rajasthan Film Tourism Regulation Rules, 2016 - Simplified Film Shooting Regulation

• Heritage Certificate Guidelines, 2016 - Eased Heritage Certification Process

• Investment promotion in Tourism Sector

The Rajasthan Tourism Unit Policy, 2015 offers attractive incentives and institutional support to promote tourism sector.

63 http://resurgent.rajasthan.gov.in/focus-sectors/tourism

Investment in Tourism Infrastructure 52 Igniting India’s Growth Engine • Exemption from land conversion charges and development charges • 50% Investment Subsidy of VAT and CST • 50% exemption from Entertainment Tax for 7 years • 100% exemption from payment of Luxury Tax for 7 years Fiscal Incentives • Land allotment in urban and rural areas at DLC rates • 25% additional exemption from payment of stamp duty chargeable on purchase or lease of more than 100 years old heritage property

• 50% additional exemption from payment of conversion charges for heritage property converted into a heritage hotel • All registered Tourism Units will directly become training partners under the Employment Linked Skill Training Program

Skill • During 2015-16, in-principle approval has been accorded for setting up of Development two new State Institute of Hotel Management with CFA of ` 16.50 crore. In addition, in-principle approval accorded for setting up of two Food Craft Institutes (FCIs) with CFA of ` 7.50 crore64 • Focused campaign on highlighting Rajasthan as a favored tourism destination Marketing & not just during peak periods but throughout the year Branding • Promote awareness about the lesser known destinations of the State Product • Promotion of theme based tourism: Heritage, Spiritual, Cultural, Wildlife, Development Desert, MICE, Adventure, Heritage, Night Tourism Tourism • Development of mega tourism circuits: Mega Desert Circuit, Mewar Complex Infrastructure • Planned development of specialized circuits for birding, handicrafts and Development spiritual • A single window clearance system (SWCS) for investment approvals is Single Window operational in the state and the Bureau of Investment Promotion (BIP) was set Clearance up to focus on investments above ` 13 crore

Source: Rajasthan Tourism Unit Policy- 2015

Rajasthan Film Tourism Regulation Rules, 2016

• To incentivize film tourism in the State, the Department of Tourism has issued amended Rajasthan Film Shooting Regulations, 2016,

• Film Makers have been exempted from paying security deposits of ` 50 lakh, per day processing charges of ` 15,000 and application fee of ` 1,000,

• The Tourism Commissioner shall act nodal agency for all departments of the State and Single window clearance system shall be operated by the Tourism Commissioner,

• Various movies have been shot in Rajasthan both from Bollywood and Hollywood. Heritage Certificate Guidelines, 201665

• Heritage Properties Guidelines, 2016 has been implemented for issuing of heritage certificates to heritage properties,

• Heritage property has been defined as a fort, a fortress.

64 http://tourism.gov.in/annual-report-2016-17 65 Heritage Certificate Guidelines 2016, Department of Tourism, Government of Rajasthan http://tourism. rajasthan.gov.in/assets/pdf/acts-and-policy/Heritage-Certificate-Guidelines-2016.pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 53 Investment promotion in Tourism Sector66

• Given its high potential, the State is aggressively marketing tourism opportunities for investment and development. The Department of Tourism has approved 91 tourism unit projects in the State in the year 2016-17 till December, 2016, involving proposed investment of ` 1,650 crore.

• To increase private investment in tourism sector of the State, the Department of Tourism signed 221 MOUs the investors during Resurgent Rajasthan-2015 involving investment of ` 10,442 crore and employment generation for over 40,000 persons.

• At the “Incredible India Tourism Investors’ Summit 2016” held in September 2016, the Department of Tourism signed 45 MOUs with the private sector investors involving investment of ` 847.7 crore and proposing employment to over 4,000 persons.67

3.5 Odisha

State Economic Profile

Odisha is situated in the eastern region of India with a geographical area of 155, 707 sq km. The State has population of 41.97 million spread across 30 disctricts. The economy of the State has been largely dominated by the service sector which contributed over 52.3% to GSDP in 2015-16 at current prices and recorded the highest CAGR of 12.38% during 2004-05 to 2015-16.68

Strategic Advantage • Diverse Tourism Offerings - Odisha - the soul of Incredible India, a land of quintessential charm, is a multi-faceted tourism destination offering rich culture, heritage and beauty. The natural beauty coupled with enduring architecture rightly captures the essence of India. Odisha is known for its rich culture, heritage and wildlife with 2 national parks, 18 sanctuaries,69 1 project tiger reserves, turtle sanctuary, 1 UNESCO World Heritage Site70 and third largest concentration of tribals in India.

• Focus on Tourism in State budget: ` 293 crore has been allocated for tourism development in the State Budget 2017-18 of which ` 86 crore earmarked for development and management of tourist infrastructure, ` 55 crore for tourism promotion and ` 6.50 crore for Barishtha Nagarika Tirtha Yatra Yojana.71

3rd Rank – Intensity of 13% Best Heritage State in India overnight domestic Tourism contribution to State PATWA International Award, tourism GSDP in 2015 2012

500 11 th 200 Temples at Bhubaneswar World Bank’s EoDB 2016 Buddhist heritage sites (known as temple city of ranking India) Ease of Doing Business

66 Rajasthan Economic Review 2016-17, Department of Planning, Government of Rajasthan (http://plan.rajasthan. gov.in/) 67 http://tourism.gov.in/annual-report-2016-17 68 Odisha Presentaion, IBEF, April 2017 69 Natureconservation.in 70 Whc.unesco.org 71 http://www.odisha.gov.in/ Investment in Tourism Infrastructure 54 Igniting India’s Growth Engine • Domestic Tourist Visits in Odisha were recorded at 9.29 million in 2012 which has increased to 12.84 million in 2016 with a CAGR of 6.69% (2012-16). The Foreign Tourist Visits in Odisha were recorded at 0.066 million in 2012 and it has increased to 0.076 million in 2016 with a CAGR of 3.11% for the period.72

Figure 15: Domestic & Foreign Tourist Visits in Odisha

Domestic Tourists Foreign Tourists 140.00 0.80 0.072 12.07 0.067 0.067 120.00 11.05 0.70 0.063 0.066 10.64 100.00 9.29 0.60 0.053 8.47 80.00 7.77 0.50 60.00 0.40

I n M i l o s 0.30 40.00 I n M i l o s 0.20 20.00 0.10 0.00 0.00 1 2 3 4 5 6 1 2 3 4 5 6 1 1 1 -1 1 -1 -1 -1 - - 0-1 1 2- 3 4 5-1 10-1 11 2-1 3 4 5- 1 1 1 1 1 1 0 1 1 1 1 0 0 20 2 0 0 20 20 20 20 2 2 20 20 2 2 Source: http://www.odishatourism.gov.in/

Key Circuits under Development73 • Development of Tourism Circuits: – Koraput - Deomali - Sunabeda - Gupteswar Circuit – Harishankar – Nrusinghnath - Patara Circuit – Infrastructure Development at Puri, Shree Jagannath Dham Ramachandi Prachi River front at Deuli Dhauli under Mega Circuit – Puri has been identified by the Ministry of Tourism under the Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD) scheme. The amount sanctioned for this project is ` 50 Crore – Under Swadesh Darshan Scheme, Ministry of Tourism has identified Gopalpur-Tampara- Barakul-Satapada for development of Coastal Tourism Circuit. The amount sanctioned for this project is ` 76.5 Crore

Infrastructure assessment Connectivity

Air Road Rail Port • Odisha is well • Odisha has around • The State is well • Total length of connected through 253,050.8 km of connected with Odisha’s coastline is flight from major roads including railway network of 480 Kms cities like New Delhi, 4.644.52 km of 2,540 km • Paradeep is the Kolkata, Chennai, national highways • The major railways major port in Nagpur, Mumbai and and 5,086.1 km of divisions are Khurda Odisha connected Hyderabad. state highways Road, Sambalpur, with East-Coast • International • The State had a Waltair and Railway and National Airport Biju Patnaik road density of Bhubaneswar Highway-5A Airport is located at 161.1 km per 100 Bhubaneswar square km of area

Source: Odisha State Profile, IBEF, 2017

72 http://www.odishatourism.gov.in/ 73https://www.ibef.org/download/Odisha-APRIL-2017.pdf, http://www.odishatourism.gov.in/

Investment in Tourism Infrastructure Igniting India’s Growth Engine 55 Accommodation

Odisha offers variety of accommodation facilities spread across the tourist destinations. There are few heritage hotels with low budget in Puri and Chilka. As on 2014, there are a total of over 1,689 hotels in Odisha with different categories. The State is home to two five star hotels both based in Bhubaneswar and four three star hotels based in Bhubaneswar, Rourkela, Jharsuguda and Gopalpur. The accommodation profile of the State is as under.

Table 13: Accommodation Infrastructure

Year Number of Hotels74 Total Number of Number of High Spending Middle Spending Low Spending Rooms Group (HSG) Group (MSG) Group (LSG) Hotels 2010 114 263 942 1,319 26,531 2011 150 245 933 1,328 27,291 2012 251 288 918 1,457 30,770 2013 306 356 923 1,585 33,349 2014 334 399 956 1,689 35,373 2015 383 455 921 1,759 36,386

Source: Odisha Tourism Statistical Bulletin, 2015

MICE (Meetings, Incentive, Conferencing & Exhibitions)

The State has been conducting B2B meets, conferences, exhibitions and conventions, both Government - related as well as private in the state capital Bhubaneswar, Cuttack and Puri amongst others. The State has further planned to develop an International Convention Center in Bhubaneswar at an estimated project cost of ` 480 crore.75

Initiatives by the State Government

• Tourism Policy 2016: The new policy was launched with the vision to develop Odisha as the supreme tourist destination and to place it prominently on the domestic and global tourism map. The present policy envisages an aggressive, dynamic and long term approach to achieve the growth potential in tourism by initiating identified policy measures, framing the required statutory framework, ensuring large scale investment support through professional management and private participation, establishing the required synergies among various sectors through appropriate institutional arrangements and focused intervention for improvement of value and quality in tourism sector. Salient features of the policy are:

• Capital investment subsidy ranging from 20%-30% subject to a limit of ` 15 crore • Interest subsidy of 5% p.a. subject to maximum of ` 1 crore for the entire period of 5 years Fiscal Incentives • 100% exemption of Stamp Duty on purchase of land for the project • 100% reimbursement of the land conversion charges • 100% reimbursement of VAT paid for a period of 7 years • 100% reimbursement of Entertainment Tax for a period of 5 years

74 LSG- Average tariff/room/day-upto ` 500/- MSH- Average tariff/room/day-` 501/- -` 999/- HSG-` 1000 & above 75 https://infrastructureindia.gov.in/

Investment in Tourism Infrastructure 56 Igniting India’s Growth Engine • Exemption from payment of electricity duty up to a contract demand of 5 MVA for a period of 5 years • 75% reimbursement of expenditure incurred on accommodation in Fiscal Incentives hotels of Odisha during film shooting subject to a limit of ` 10 lakh • 100% reimbursement of entry tax on acquisition of plant & machinery and raw materials • Facilitating improvement of infrastructure, tourism products and services • Positioning Odisha as a preferred tourism destination at national and Strategic Intervention international levels Areas • Creating instituinal structure for effective implementation of the policy • Streamlining process for obtaining clearances • Prioritizing Capacity Development Land • The committee advices allotment of land parcels from the Land Bank Recommendation Committee • State Tourism Council will identify and notify some regions as Special Special Tourism Zone Tourism Zones

Investment Promotion76 • In February 2017, the State Government signed a MoU with Air Asia to operate direct international flights to Malaysia with the objective to promote inbound tourism in Southeast Asia. For this purpose various packaged tours have been introduced such as Coastal Trek, Jagannath Trail, Weekend Gateways, Cycle Tours amongst others • 350 places have been identified as Tourist Centers • With the objective to attract more tourists in the State, Odisha Tourism organized a number of festivals including organized Kalinga International Buddhist Conclave, Konark Festival, International Sand Art Festival, Muketeswar Dance Festival amongst others • State Government has launched a new scheme ‘Baristha Nagarika Tirtha Yatra Yojana’, 2016 in collaboration with IRCTC to promote Religious Tourism amongst Senior Citizens • The State Govt. approved plans to develop 30 eco tourism places in the State at an estimated cost of ` 21 crore

3.6 Karnataka

State Economic Profile

Situated in the southern part of India, the province of Karnataka spreads over 192,000 sq km (8th largest state in India) across 30 districts with a population of 61.1 million. The economy of the Stat is largely dominated by the service sector with contribution of 64.05% to the GSDP at current prices in 2015-16. The sector has witnessed at a CAGR of 16.31% from 2004-05 to 2015-16.77

76http://www.odishatourism.gov.in/ 77IBEF, Karnataka State Presentation, 2017

Investment in Tourism Infrastructure Igniting India’s Growth Engine 57 Strategic Advantage

• Diverse Tourism Offerings: The state is home to three World Heritage Sites. Hampi, Pattadakal and the Western Ghats of Karnataka are the ones and three more popular groups of monuments have entered the UNESCO’s World Heritage tentative list. These include monuments and forts of the Decan Sultanate at Gulbarga, Bidar and Bijapur, monuments of Srirangapatna island town and sacred ensemble of the Hoysalas series including Belur and Halebid. Further the State is bestowed with five 5 national parks, 26 wildlife sanctuaries, pelicanries, heronries and elephant camps.

• Focus on Tourism in State Budget: ` 390 crores has been allocated for tourism development in the State Budget 2017-18.78 The focus for development will include skill development, integrated development of Heritage Tourism infrastructure, construction of an Aero Sports Hub in Mysuru, development of 16 world class tourist centres and wayside amenities amongst others.

14.8% Golden Chariot Train 5th rank Tourism contribution to State Ranked amongst the top Tourist arrivals in India (2016) GSDP in 2015-16 seven train journeys in the world by Vanity Fair, UK

Medical Tourism Hub 13th 320 km of India World Bank’s EoDB 2016 Natural Coastline Highest number of approved ranking health systems and alternative Ease of Doing Business health therapies in India

State Tourism Profile

The state ranked 5th in domestic tourist footfalls contributing to about 129.7 million and 11th in foreign tourist footfalls contributing 0.46 million during the year 2016. During 2005–15, tourist arrivals in the State witnessed a CAGR 16.9%.79

Figure 16: Percentage of Domestic Tourists Visiting Karnataka and Rest of India (2016)

Karnataka 7.95

Rest of India 92.05

Source: Ministry of Tourism, Government of India

78http://www.finance.kar.nic.in/Bud2017/BHeng2017-18.pdf 79http://www.karnatakatourism.org/

Investment in Tourism Infrastructure 58 Igniting India’s Growth Engine Figure 17: Domestic and Foreign tourist visits in Karnataka (2012-16)

Domestic Tourists Foreign Tourists 150.00 129.76 0.80 119.90 118.28 0.64 0.64 0.60 0.56 94.05 98.01 0.60 100.00 0.46 0.40 i n M l o 50.00 i n M l o 0.20

0.00 0.00 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Source: Ministry of Tourism, Government of India

Key Circuits under Development

• Under Swadesh Darshan Scheme, Ministry of Tourism has identified Dakshin Kannada, Uttar Kannada and Udupi for development of Coastal Tourism Circuit. The amount sanctioned for this project is ` 9,567.38 lakhs80

• Ramayana Circuit: The Ministry of Tourism has proposed to include the world heritage site Hampi and Anegundi under Ramayana Circuit development

• Ministry of Tourism has identified Hampi world heritage site to be developed as mega tourist destination

• With the objective to attract high end travelers the State Government has planned to launch ‘golf tourism circuit’ covering Bangalore, Mysore, Belgaum, Chikmagalur and Madikeri81

Existing Circuit

• Northern Circuit - The Northern Circuit consists of Northern Districts of Karnataka namely Belgaum, Bijapur, Dharwar, Bidar, Gulbarga, Raichur, Bellary and Chitradurga. This circuit has the presence of historically important heritage and pilgrim centres, temples, monuments and forts.

• Southern Circuit - The Southern Circuit consists of Districts of Bangalore, Mysore, Mandya, Hassan, Kolar, Shimoga, Chickmagalur, and Tumkur. This circuit has the presence of lakes, gardens, wildlife, museums, monuments, culture, leisure, palaces, pilgrim, sanctuaries and monuments.

• Coastal Circuit - The coastal circuit consists of the coastal districts of Uttar Kannada and Dakshin Kannada.

• Wildlife Circuit - The wild life circuit consists of Wild Life Sanctuaries, National Parks and Bird Sanctuaries. There are 5 National Parks, around 22 Sanctuaries and around 3 Jungle Lodges and Camps

• Hill Resort Circuit - The Hill circuit covers the Hill stations of Mercara, Kemmannagundi, Kudremukh, Male, Mahadeshwara Hills, BR Hills, Sandur, Nandi Hills and Jog Falls

80http://pib.nic.in/ 81http://www.business-standard.com/article/companies/karnataka-to-launch-39-golf-tourism-39- circuit-109061500014_1.html

Investment in Tourism Infrastructure Igniting India’s Growth Engine 59 Infrastructure assessment Connectivity82

Air Road Rail • Karnataka has a total of • Karnataka is well • Total Rail track Length in six airports which includes connected with five Karnataka is 3250 km two international airports in neigbouring states and Bengaluru and Mangaluru other parts of India • Karnataka stands third in rail and four domestic airports in through 15 national density (km of rail length / Mysuru, Belgaum, Hubli and highways 1000 sq.km of area) among Hassan all the southern states after • During 2015-16, the Tamil Nadu and Kerala • Minor airports at Shimoga, State Govt. completed Kalaburagi, Vijayapura, Hassan • During 2015-16, Karnataka’s development of major and Bellary are being developed metro network of 27km was districts roads of 5573km under PPP mode operational

Accommodation

Karnataka offers adequate accommodation facilities spread across the State and is mostly dominated by the budget hotel. There are nearly 2500 hotels in Karnataka with 5-star category hotels in Bengaluru, Myosre, Mangalore and Coorg. Notable hotel chains include Taj Hotel, The Leela Palace, Marriott Group and the Oberoi Group amongst others.

MICE (Meetings, Incentive, Conferencing & Exhibitions)

Bangalore International Exhibition Centre, Bangalore Palace and Dr. TMA Pai International Convention Centre in Mangalore are the most popular convention and exhibition centre in the Karnataka. Other centers include UVA Meridian Banquets & Conventions in Udupi and Esteem Convention Centre in Banaglore. The State Government has also planned for developing convention centers on PPP mode in Pilikula (Mangalore) and Mysore.

Initiatives by the State Government

• Tourism Policy

New Tourism Policy 2015-20 was launched with 20 tourism products to encourage private investments in tourism sector. The policy aims to develop Karnataka as a dynamic, sustainable and most-favoured tourism destination - by increasing domestic & international visitations, offering high quality experience to visitors, facilitating and accelerating investments and improving livelihood opportunities at the local level. Salient features of the policy are:

• Exemption of stamp duty to be in paid of (i) loan agreements, credit deeds, mortgage and hypothecation deeds availed for availing loans from State Government and (ii) for lease deeds, lease-cum-sale and absolute sale deeds executed in respect of tourism projects • The registration charges shall be at the concessional rate of ` 1 per ` Fiscal Incentives 1000 for all loan documents and sale deeds as specified under the head ‘Exemption on Stamp Duty’ • Reimbursement of land conversion fee for converting the agricultural land into non-agricultural land for the development of tourism projects • For Mega Projects, Ultra Mega Projects and Super Mega Projects, loan to the extent of 100% of VAT shall be sanctioned as interest free loan

82IBEF State Presentation on Karnataka, 2017

Investment in Tourism Infrastructure 60 Igniting India’s Growth Engine • Entry tax on plant & machinery and capital goods for development of tourism projects shall be 100% exempted for an initial period of 3 years from the date of commencement of project implementation • Reimbursement of Entertainment Tax for Entertainment Parks that are classified as Ultra Mega Project and Super Mega Projects for the first 5 Fiscal Incentives years from the date of commencement of operations • Exemption on luxury tax on actual room charges of ` 5000 or below per day (Homestays, Yatri Niwas, Youth Hostels / Dormitories) for upto 10 years from the date of commencement of operations • Exemption on Motor Vehicle Tax for the tourism vehicles purchased for carrying out tourism related activities • Facilitating improvement of Infrastructure, Tourism Products and Services • Positioning Karnataka as a preferred tourism destination at state, national and international levels Strategic • Creating institutional structures for effective implementation of the policy Intervention Areas • Streamlining processes for obtaining clearances • Offering attractive incentives for various tourism products and services • Prioritizing human resources development & capacity enhancement Enactment of the • Karnataka Tourism Trade Facilitation Act 2015 was enacted to facilitate Facilitation Act tourism activities According • Focusing on development of tourism in the state with a special emphasis ‘Industry’ Status to on infrastructure development on PPP mode Tourism Sector Vision Group on • The Vision Group advises the government on various strategies and policy Tourism initiatives for the development of tourism in Karnataka

Investment Promotion83

• Golden Chariot, the only luxury train of southern India is from Karnataka. It is rated by Vanity Fair, UK as amongst the top seven train journeys in the world

• Mega tourism projects being undertaken on PPP mode

• Jungle Lodges & Resorts - Joint Venture of Tourism and Forest Departments of Govt. of Karnataka to develop resorts for promoting eco-tourism

• The State Govt. coming up with separate policies for Film Tourism, Adventure Tourism and Homestay Tourism

• Separate Karnataka Ecotourism Development Board (KEDB) coming up with ecotourism policy

• Rating agencies empanelled to rate Tourism Facilities/Products

• Mandatory empanelment and rating of homestays

• The State Government has declared 2017 as the ‘Year of the Wild’ to promote ecotourism and adventure tourism

• Several initiatives like Tourist Mitra, Adoption of tourism destinations under CSR, etc have been taken up by the Tourism Department for development of variety of tourism activities and creation of tourism friendly environment

83http://www.karnatakatourism.org/, http://www.kstdc.co/, Ibef Presentation on Karnataka, 2017

Investment in Tourism Infrastructure Igniting India’s Growth Engine 61 3.7 Telangana

Economic Profile84 85 86

Telangana is the 29th State has a geographical area of 1.12 lakh sq. kms. The state has a 31 districts and population of 35.2 Million. Telangana’s GSDP at constant (2011-12) prices is estimated at ` 5.11 lakh crore in 2016-17, compared to the previous year estimates of ` 4.64 lakh crore, thereby registering a growth rate of 10.1 per cent.The share of Telangana’s economy in National GDP is 4.28 percent in 2016-17, as against 4.21 percent in 2015-16.

Advantage – Telangana

Presence of rich painting and folk Ranked 1st in Ease of Doing arts such as Burrakatha, Shadow Business rankings Puppet Show, and Perini Shiva Tandavam

Presence of Persian Traditions Hyderabad has the potential embedded during Moghuls, Qutub to emerge as a global medical Shahis and Nizams rule tourism hub

Tourism profile

The state of Telangana is diversified and is one of the preferred destinations for domestic and foreign tourists as it is home for famous heritage monuments, natural spots, and divine shrines. It is endowed with heritage sites, natural beauty, divine spots and adventure destinations. The tourist arrivals (including domestic and foreign) in Telangana stood at about 95.3 million for 2016, with Domestic Tourist arrivals increasing by 0.68% and Foreign tourist arrivals increasing by 32.12% over 2015.87

Figure 18: Domestic and Foreign tourist visits in Telangana (2014-16)

Domestic Tourists Visits Foreign Tourists Visits 120.00 1.8 0.167 1.6 95.16 94.52 1.4 90.00 0.126 72.39 1.2 1 60.00 0.8 0.075 i n M l o i n M l o 0.6 30.00 0.4 0.2 0.00 0 2014 2015 2016 2014 2015 2016 Year Year

84Socio Economic Outlook 2017, Planning Department, Government of Telangana 85Socio Economic Outlook 2017, Planning Department, Government of Telangana 86Socio Economic Outlook 2017, Planning Department, Government of Telangana 87India Tourism Statistics 2015

Investment in Tourism Infrastructure 62 Igniting India’s Growth Engine Popular Tourism Circuits / Destinations

1. Swadesh Darshan Circuit88

a. Integrated Development of Eco Tourism Circuit in Mahaboobnagar district, Telangana was sanctioned by Ministry of Tourism, Government of India with an estimated cost of ` 91. 62 crore

b. In 2016-17, Ministry of Tourism has sanctioned Integrated Development of Mulugu - Laknavaram - Medavaram - Tadvai - Damaravi – Mallur – Bogatha - Waterfalls as Tribal Circuit in Telangana with an estimated cost of ` 84.4 crore89

2. State Government is planning to develop the following circuits:90

a. Tribal & Eco tourism Circuit in Adilabad, Nirmal and Kumarambheem-Asifabad Districts

b. Hyderabad Heritage Circuit covering Qutub shahi heritage park, paigah tombs, Hayat Bakshi Begum Mosque, Raymond’s tomb

Source: Statistical Year Book of Telangana 2016

88Annual Report 2016-17 of Ministry of Tourism, Government of India and http://pib.nic.in/newsite/PrintRelease. aspx?relid=124422 89Ministry of Tourism, Government of India 90Statistical Year Book of Telangana 2016

Investment in Tourism Infrastructure Igniting India’s Growth Engine 63 Infrastructure assessment

Air Road Rail

• Rajiv Gandhi International • Telangana is well- • Roads play a vital role in Airport, located at Shamshabad connected to other parts transportation. As of 2015- near Hyderabad is the only of the country through 16, the state had 2,635 international airport in the the rail network. During km of National highways, state. It connects Hyderabad 2014-15, the state had a 12,079 km of major District with various other national and railway network of 1,753 roads and 3,512 km of State international cities and capitals. km having 228 railway highways. The airport offers visa-on-arrival stations. The Government facility for citizens from more is planning to build rapid than 140 countries, which is a rail connectivity in the boon for overseas tourists. The state. The rapid rail line State also has other airports will connect the capital connecting Telangana to various of Telangana to the new cities in the country. capital of Andhra Pradesh. For construction of new railway lines in the state, the government proposed an investment of USD 7.08 million in 2015-16.

Key Government Initatives91

• The State Government is coming up with the New Tourism Policy to encourage investments in the Tourism and Hospitality Sector.

• Creation of “Telangana Samskruthika Sarathi”, a distinct state level body to create awareness regarding the cultural heritage of Telangana & provide information about various schemes launched by the Government of Telangana & development of different policies.

• Proposal to build a new mega Cinema City to promote the tourism film industry in Telangana. The proposed project is expected to span over 2,000 acres on the Nalgonda-Ranga Reddy border in Rachakonda.

• Proposal to develop “Kaloji Kala Kendram” at Warangal and “Telangana Kala Bharati” at Hyderabad, to promote cultural activities in the state.

• Allocation of USD 16.59 million for the development of Yadagirigutta Devasthanam. Further, development of Narasimha Abhyaranyam has been planned in 400 acres of land. Meditation centres, Veda pathshalas, marriage halls, parks and cottages would be constructed in additional 1,600 acres of land.

• Telangana Tourism Development Corporation, Government of Telangana has conducted Buddhist International Conference in February 2017.

• Telangana Tourism Development Corporation, Government of Telangana has organised “Helicopter Joy rides” in June 2017.

91 Telangana State Statistical Year Book, 2015

Investment in Tourism Infrastructure 64 Igniting India’s Growth Engine 3.8 Maharashtra

State Economic Profile

Maharashtra is the second largest state in India in terms of population and has geographical area about 3.08 lakh sq. km. It has a population of 11.24 crore (Census 2011) which is 9.3% of the total population of India and is highly urbanised with 45.2 per cent people residing in urban areas. The Gross State Domestic Product (GSDP) at current prices for 2013-14 is estimated at ` 15,10,132 crore. Industry and Services sector both together contribute 88.7% to the GSDP while the contribution of Agriculture & Allied Activities sector is 11.3%.92 Tourism Profile

Over 2011-16, the overall tourist arrivals in Maharashtra has grown at the CAGR of 16.05%. In 2016, DTVs increased by 12.65% and FTAs increased by 5.92% over 2015. The state is blessed with rich history, tradition and culture, which is evident through its world class ancient forts and monuments, cave temples and pilgrimage centers. Most visited tourist destination in the State is Ellora at Aurangabad. A historic Buddhist Cave at Ellora is very famous and it is a part of Buddhist circuit in the State.

Strategic Advantage

• Over the past five years the overall tourist arrivals in Maharashtra has grown at the CAGR 13.32% and the leader in the country with respect to foreign tourist arrivals of 20.8% into India.

• The state is also blessed withrich history, tradition and culture, which is evident through its world class ancient forts and monuments, ancient cave temples and pilgrimage centers.

2nd 15% 10.01% Highest foreign tourist Tourism contribution to State Tourist Visit Growth for the inflow in 2016 GSDP year 2014-15

Nagpur, Aurangabad and 2nd 10th Sindhudurg earmarked as Highest foreign tourist World Bank’s EoDB 2016 special tourism districts visits in 2016 ranking Ease of Doing Business

92https://www.maharashtra.gov.in/Site/upload/WhatsNew/Economic%20Survey%20of%20Maharashtra...pdf

Investment in Tourism Infrastructure Igniting India’s Growth Engine 65 Infrastructure assessment

Air Road Rail

• Air connectivity is the key driver • The state is well connected • The rail transport for attracting the domestic to its 6 neighbouring states & system of Maharashtra and international tourists. other parts of India through 18 is very well developed. There are seven domestic national highways. The state is well- and four international airports connected to other functioning in Maharashtra. • The 94.5 km long Mumbai- parts of the country Domestic flights operate Pune expressway is India’s 1st with a railway network from Mumbai, Pune, Nagpur, 6-lane, concrete, high speed, spanning 6,103 km Aurangabad, Juhu and Nanded, tolled expressway, which (including 378 km of whereas international flights connects the state capital & Konkan Railway). operate from Mumbai, Nagpur, financial hub, Mumbai, with Pune and Aurangabad. Mumbai the neighbouring industrial airport is one of the busiest hub, Pune. airports in India. To reduce congestion at the Mumbai • The state government plans International Airport, an idea to construct a new proposed for a new airport has been 8-lane highway, between proposed at Navi Mumbai. Mumbai & Nagpur, in which concept of land pooling will come into play.

Accommodation Infrastructure

According to study by MIDC, as of June 2015 Maharashtra has total bed capacity of 2.44 lakh (classified/non - classified) with average annual occupancy of 45%. Occupancy pertains not merely to hotels but also Guesthouses and Dharamshalas. In Maharashtra Tourism Policy 2016, an amount of USD 43.53 million was allocated by the Government to boost basic amenities being provided across tourist spots • The overall occupancy, during 2014-15, was 45.2%.

• Total 96 hotels and MTDC Resorts across Maharashtra.

Theme Based Tourism Development 1. Heritage Tourism – Marathwada 2. Wildlife Tourism – Vidarbha 3. Golden Coast of India – Konkan 4. Religious Tourism 5. Film Tourism 6. Wellness Tourism

Investment in Tourism Infrastructure 66 Igniting India’s Growth Engine Initiatives by the State Government

• Tourism Policy 2016: In 2016, the Government of Maharashtra formulated a new policy on Tourism - ‘Maharashtra Tourism Policy 2016,’ which aims at minimizing delays as well as replication of redundancies & information and enhancing the application process efficiency. An amount of USD 43.53 million was allocated by the government to boost basic amenities being provided across tourist spots.

• Special Tourism Districts: Aurangabad has been affirmed as a tourist district in the state and the Government has decided to offer special attention towards the uplifting of tourism in Verul, Sulibhanjan, Mhaismal and Khultabad.

• Tourism PPP: Public Private Partnership Transaction Advisory Cell will provide advisory services for private sector participation for PPP Projects.

• Maharashtra Tourism Investor Facilitation Cell: The institution has been set up which will act as a converging body to monitor the sector progress. Steering Committee has been formed under Principal Secretary (Tourism) for facilitating investments into the State.

3.9 Arunachal Pradesh

State Economic Profile

Covering an area of 83,743 sq km, Arunachal Pradesh is the largest State in the North East of India. It has a long international border with Bhutan, China, and Myanmar. The state stretches from snow capped mountains in the north to the plains of Brahmaputra in the south. It has a population of 1.47 million spread across 17 districts. Economy of Arunachal Pradesh is dominated by primary and tertiary sectors with contribution of 46.33% and 29.75% respectively to the GSDP of 2015-16 at current prices. The tertiary sector witnessed a CAGR of 14.79% between 2004-05 and 2015-16.

Strategic Advantage

• Natural Resources – Arunachal Pradesh is one of Asia’s most biologically diverse and intact forest ecosystems. It has been recognized as one of the 18 biodiversity hotspots of the world. The State is known as “Orchid Paradise” accounting for 601 species of orchids or 52% of species known in India.

• Cultural Heritage: Around two third of Arunachal Pradesh’s population belongs to 26 major tribes and more than 100 sub tribes. Their repository of culture and heritage is reflected through exquisite arts on bamboo wood and cane handicrafts, carpets, traditional ornaments and paintings.

Strategic Location Best Eco-Tourism Destination Shares international borders with Bhutan, Today’s Traveler Award 2015 China and Myanmar

Tawang Monastry Orchid Paradise Founded in 1680-81, it is the largest 601 species of orchids monastery in India

Investment in Tourism Infrastructure Igniting India’s Growth Engine 67 Tourism Profile

Tourism has grown rapidly in recent years with eco and adventure tourism, cultural tourism, religious tourism being the major areas of interest amongst tourists. Foreign tourist visits in Arunachal Pradesh were recorded at 0.007 million in 2016 with a CAGR of 6.78% over 0.005 million in 2011.

Further, Arunachal has registered a growth of 9.60% in domestic tourist arrivals with over 0.39 million domestic tourists visiting Arunachal Pradesh in 2016 while 0.35 million domestic tourists visited in 2015.

Figure 19: Foreign and domestic tourist visits in Arunachal Pradesh (2011-16)

Foreign Tourist Visits Domestic Tourist Visits 0.50 0.39 0.40 0.008 0.007 0.30 0.006 0.005 0.23

i n M l o 0.20 0.004 i n M l o 0.002 0.10

0 0.00 2011 2016 2011 2016

Source: http://tourism.gov.in/

Key Circuits under Development

• Under Swadesh Darshan Scheme, Ministry of Tourism has planned integrated development of Adventure Tourism in Arunachal Pradesh under North East Circuit. The amount sanctioned for this project is ` 97.14 Crore.

Infrastructure assessment

Connectivity

Air Road Rail

• The first airport in Tezu will • The state capital Itanagar • Arunachal has around soon be operational connected to the New Delhi 20,137km of roads via bi-weekly train including 2,513 km of • Six new airport and several national highways and helipads to be developed in the • Plans to extend the existing 12,169 km of major state railway connectivity and district roads connect the Upper Assam areas with Arunachal Pradesh

Source: IBEF Arunachal Pradesh, 2017

Accommodation

Arunachal Pradesh offers variety of accommodation facilities spread across the tourist destinations. The State is home to over 75 with different categories. The accommodation profile of the State is as under.

Investment in Tourism Infrastructure 68 Igniting India’s Growth Engine Table 14: Accommodation Infrastructure

To w n No. of Hotels/lodges No. of Rooms Itanagar 17 273 Ziro 5 74 Tawang +20 +165 Bomdila +20 +100 Bhalukpong +13 +120 Dirang 2 8 Total +75 +740

Source: Ministry of Development of North Eastern Region

MICE (Meetings, Incentive, Conferencing & Exhibitions)

Arunachal Pradesh is an emerging MICE destination and its promotional activities are targeted towards attracting MICE tourists. Itanagar, Tawang and Bombdila are the major towns for MICE tourism destination.

Initiatives by the State Government

• Tourism Policy: The tourism policy was launched with the vision to develop the tourism industry as an Engine of Growth in Arunachal Pradesh. Salient features of the policy are:

• Suitable planning for sustainable development of tourism

• Protection of its heritage

• Reduction of poverty

• Capacity building and creation of mechanisms in support of small and medium enterprises Objectives • Formulation of strategies that will exploit opportunities and potential of the State

• Ensuring development policies including public works and transportation that support and promote the various attractions of the State

• Securing involvement of the largest number of stakeholders in decision- making, resource allocation and utilization • Plan to procure equipment for adventure sports and conduct more programmes

• Create tourism awareness to promote tourism in the State by way of conducting various awareness trainings at different places involving service Strategies providers, tour operators, unemployed youths, officials and other stak holder, besides deputing officials for in-service trainings

• Construction of Tourist Lodge and infrastructure development in districts

• Capacity building of Women SHG & NGO under Rural Ecotourism

Investment in Tourism Infrastructure Igniting India’s Growth Engine 69 Investment Promotion • A project has been launched under ‘Chief Minister Paryatan Vikaas Yojana’ to provide subsidized tourist cabs to educated unemployed youth across districts. • The State Government has signed an MOU with the Indian Railway Catering and Tourism Corporation for promoting tourism. • With the objective to make the State tourist friendly, the Government is working on simplifying the process of application & issuance of the Inner Line Permit.

3.10 Himachal Pradesh

State Economic Profile

Himachal Pradesh is one of the fastest growing States in India. Being a sub- Himalayan state, Himachal Pradesh has a varied climate that changes with altitude. Agriculture contributes nearly 45% to the NSDP and is the main source of income. Further, the GSDP of the State grew at CAGR of 10.51% between 2005-06 and 2015-1693. With hydro power potential of 27,436 MW, Himachal Pradesh accounts for 25.9% of the country’s total hydro power potential. As of March 2016, all the villages of Himachal Pradesh have been electrified and the State became the second State in India to declare ‘Open Defecation Free’ (ODF) status under ‘Swachh Bharat Mission’.

Strategic Advantage

Ideal Tourist Destination 7.2% 5 State is located in sub Tourism contribution to State Number of National Parks Himalayan region and is part GSDP in 2015-16 along with 30 Wildlife of Himalayan Circuit Sanctuaries in the State

82.8% 17th 2nd Literacy rate compared with State to declare ODF status World Bank’s EoDB 2016 National average of 73% ranking Swachh Himachal Educated Skill Force Ease of Doing Business

Focus on Tourism in State budget – In the 2016-17 budget, tourism department has proposed an investment of USD 15.28 million under Himalayan Circuit project for development of tourist destinations in the state, further the state plans to set up a golf course and improve connectivity by increasing the number of helipads to boost tourism.

State Tourism Profile

Himachal Pradesh is famous for its Himalayan landscapes, hill stations and temples. Tourism sector’s contribution to GSDP of Himachal Pradesh state was 7.2% by 2015-16 which is projected to rise to 18% by 2021-22. In 2016, the state witnessed a total of 18.44 million tourists of which 17.99 million were domestic tourists while 0.45 million were foreign tourists. Domestic tourist inflows in the state increased from 11.04 million in 2009 to 17.99 million in 2016.

93IBEF Himachal April 2017

Investment in Tourism Infrastructure 70 Igniting India’s Growth Engine Development of Tourist Circuits

Key Circuits under Development includes formation of Himalayan Tourist Circuit under Swadesh Darshan Scheme with sanctioned amount of ` 100 crore.94 The State Government had proposed 14 sub-projects under the scheme including convention centre at Kiarighat in Solan district, heliport at Shimla, water sports centre at Sunni in Shimla Rural constituency, redevelopment of Shimla ice skating rink, wayside amenities at Tipra in Solan district, recreation centre at Manali, artificial rock climbing work at Manali, beautification of Dal lake at Dharamshala, Paragliding School at Bir, rafting centre at Naduan in Hamirpur district, beautification of Sourabh Kalia Van Vihar, Palampur, Cultural Centre at Kangra & art and culture centre at Bhalei Mata in Chamba.

Existing Circuits

Himachal Pradesh Tourism Development Corporation has divided the State into four interesting circuits:

Circuit Main Tourist Locations Main Attractions/ Tourism Experience Delhi - Swarghat - Bilaspur - Mandi Well-defined snow capped peaks, - Rewalsar - Kullu - Manali - Rohtang - deodar and pine trees, and rocky slopes Beas Circuit Naggar - Manikaran. amid grassy meadows carpeted with wild flowers and fruit orchards, and the sparkling Beas river. Delhi - Chintpurni - Jwalamukhi - The circuit passes in the shadow of the Kangra - Dalhousie - Khajjiar - Chamba mighty and majestic snow clad Dhauldhar Dhauladhar - Dharamsala - Chamunda - Palampur ranges - outer Himalayas, dotted by flower Circuit - Jogindernagar. filled meadows, temples, tea gardens and flocks of sheep. Delhi - Parwanoo - Kasauli- Barog It starts from the foot hills of Shivalik - Solan - Chail - Hatkoti - Rampur Mountains, the southernmost and - Sarahan - Narkanda - Naldehra - geologically youngest foothills, and Tattapani - Shimla - Kiarighat. This extends towards the higher hills. The Satluj Circuit circuit also includes Renuka, Paonta stone and apple fruit orchards, pine Sahib and Nahan. forests, deodars, majestic mountains, snow covered ski slopes and the furious Satluj river make this region a must see for visitors. Delhi - Shimla - Sarahan - Sangla - The cold desert mountains, mighty Kalpa - Nako - Tabo - Dhankar - Pin Vally glaciers, icy frozen lakes, high passes, - Kaza - Losar - Kunzum - Koksar - Sissu snow capped peaks, spectacular - Tandi - Udaipur - Trilokpur - Rohtang monasteries, lamas and yaks - this exotic Himalayan Pass - Manali. tribal region is marked by rich cultural Tribal Circuit traditions. The breathtaking adventurous terrain remains the prime destination for all nature and adventure lovers all over the world.

94http://www.business-standard.com/article/pti-stories/centre-sanctions-rs-100-crore-for-hp-under-tourism- project-117021400895_1.html

Investment in Tourism Infrastructure Igniting India’s Growth Engine 71 Infrastructure assessment Connectivity

Air Road Rail

• There are three airports in • Since much of the state is • The Kalka Shimla Himachal Pradesh – at Kullu hilly, roads play a vital role in Himalayan railway (Bhuntar), Kangra (Gaggal) and transportation. As of 2015-16, route an UNESCO Shimla (Jubbar Hatti). the state had 2622.48 km of world heritage passes • 63 operational helipads, with National highways, 2,544.91 through 103 tunnels; plans for a few more helipads km of major District roads and amid the lush green in the pipeline. 1,466.3 km of State highways. valley embellished with pine and oak trees • A new international airport is • An outlay of ` 50 Crore connects Kalka with also proposed in Sunder Nagar was allocated for the newly Shimla. district. launched scheme”Mukhya Mantri Sadak Yojna” which • Further there are • The State government has would provide last mile 2 more rail lines in taken an initiative to introduce connectivity to villages. the State. The State heli-taxi services, which Government will are expected to improve • By the end of December bear 50% cost of the connectivity and open up 2015, the State Government railway expansion remote areas for tourists. approved financial assistance project (Chandigarh- Presently, these services are of USD 835.31 million Baddi Broad Gauge Rail being operated in the Mani- under Rural Infrastructure Line) and 25% in the Mahesh sector, Chamba Development Fund (RIDF) ‘Bhanupali-Bilaspur-Beri district, during the Mani- for the execution of 5,238 Broad Gauge Rail Line’. Mahesh Yatra. projects in the state.

Initiatives by the State Government: Dynamic Business Environment

Sustainable Tourism Policy, 2013 has been formulated for promoting sustainable tourism without damaging the ecology and environment. Key initiatives taken by State Government to promote tourism are:

• In order to increase the duration of stay of the tourists, special emphasis will be laid on the development of activities based tourism while framing adventure safety guidelines.

• Increase in the Floor Area Ratio (FAR) and number of storeys of Hotels under the Town and Country Planning Act and Rules.

• The entertainment duty on various entertainments was reduced from 100% to 10% including ropeways and cinema-halls to promote these facilities. New cinema-halls will be exempted from entertainment duty for 5 years in the State.

• Proposal to develop various ropeway projects in the State, such as; Dharamkot to Triund in Kangra District, Toba to Shri Naina Devi Ji in Bilaspur District, Shahtalai to Deotsidh in Bilaspur/Hamipur District, Bashal Kanda in Shimla/Kinnaur District, Neugal (Palampur) in District Kangra & Bhunter to Bijli Mahadev in Kullu District on PPP.

• Proposal to set up a helipad near Sanjauli where private helicopters would be allowed to land, to boost tourism in Shimla.

• Five sites at Shoja, Jhatingri, Bilaspur, Suketi and Baddi will be offered to the private sector on long - term lease basis for developing tourism activities like resorts, amusement/water parks, golf courses etc. Way side amenities will be developed for providing tourists facilities.

Investment in Tourism Infrastructure 72 Igniting India’s Growth Engine Infrastructure development initiatives

• Urban Infrastructure: Dharamsala has been selected to be developed as a smart city under the smart city scheme of the Central Government. Under the smart city scheme, 24 hours persistent water and power supply would be provided to the city. Alongside, Shimla has been selected under AMRUT mission and Shimla Smart city plan has been submitted to MoUD for consideration in Smart city scheme.

• Externally Aided Projects (EAPs) have always been very useful to the economy of a Special Category State like Himachal Pradesh to supplement the State resources. At present, various EAPs in the sectors of public works, forestry, power, tourism, horticulture, skills and agriculture are being implemented in the State.

• In order to boost tourism in the state, Asian Development Bank (ADB) has sanctioned a loan of USD 95 million. Under this assistance, apart from carrying out infrastructure related works, a community based tourism project is being implemented in few districts of Himachal Pradesh under the Infrastructure Development Investment Program for Tourism (IDIPT) with objective to create ecosystem of sustainable community based tourism.

3.11 Gujarat

State Economic Profile

Gujarat is one of the leading industrialised states in India. At current prices, Gujarat’s Gross State Domestic Product (GSDP) was about USD 158.2 billion over 2015-16. Average annual GSDP growth rate from 2004-05 to 2015-16 was about 12.02 %. As of June 2016, Gujarat had a total installed power generation capacity of 30,188.75 megawatt (MW). According to the Department of Industrial Policy & Promotion (DIPP), Foreign Direct Investments (FDI) inflows in the state of Gujarat totalled USD 13.28 billion during April 2000-March 2016.95

Strategic Advantage

9th rank 2.7% 16.94% Domestic Tourist Visits Tourism contribution to State Tourism Growth in FY17 over (2016) GSDP in 2015-16 the previous year

1600 km 3rd Kutch Natural Coastline Largest White Desert in the World Bank’s EoDB 2016 world ranking Ease of Doing Business

State Tourism Profile

Gujarat has over 3,500 years of history, natural & cultural delights, beaches, fairs & festivals, temples, spiritual sites coupled with the warmth & hospitality of its people. It is the 7th largest state in the country, boasts of the longest (1,600 kms) and one of the most unique coastlines in the country,

95https://www.ibef.org/states/gujarat.aspx

Investment in Tourism Infrastructure Igniting India’s Growth Engine 73 apart from being home to one of the most important place of worship for the Hindus - Dwarka and the only place where the Asiatic Lion can still be spotted in the wild.

Gujarat has been witnessing significant growth in tourist arrivals, both domestic and international. This increase due to increase in industrial activities as number of business travelers has increased which constitutes 59% of the total tourist traffic.

Figure 20: Tourist Arrivals in Gujarat

500 CAGR 15.84% 38.3 400 32.7 28.8 25.4 300 22.4 19.8 17.0 200 14.1 15.8 a l s i n M o 10.7 12.3 7.6

r v i 100 A r 0 5 0 1 2 3 4 5 6 -0 -06 -07 -08 -09 -1 -1 -1 -1 -1 4 5 6 8 9 0-1 1 2 3-1 4 5 0 0 0 07 0 0 1 1 1 1 1 1 20 20 20 20 20 20 20 20 20 20 20 20

Source: Tourist Flow Information System (TFIS, 2014-15) by GITCO, YES BANK Analysis

Upcoming Tourism Circuits on PPP Mode:

1. Sardar Circuit

2. Yoga Circuit

3. Rama Trail

4. Krishna Circuit

5. Parsi Circuit

6. Sufi Circuit

7. Jain Circuit

8. Coastal Circuit

Investment in Tourism Infrastructure 74 Igniting India’s Growth Engine Infrastructure assessment Connectivity

Air Road Rail • Gujarat has 12 domestic • Extensive road network of • Gujarat rail network is airports (highest in the around 1.59 lakh km including of 5,108 Kms covering country), 3 state owned air National Highways and State major cities like strips and 2 international Highways Ahmadabad, Surat, airport. Vadodara and Rajkot. • Vadodara (International • Roads in Gujarat account for Airport), Surat, Jamnagar, 4.12% of India’s total road • 8.2% of total rail Rajkot, Bhavnagar, network. network of India. Porbandar, Bhuj, Pipavav, Mandvi, Mundra, Kandla, • East-West Corridor starts • 4 Western Railway Palanpur and Ahmadabad at Porbandar in Gujarat and divisions in Gujarat. (International Airport). connects to Silchar in Asam. • In 2013-14, there were 57,914 aircraft departures including international departures of 7,542 (from Ahmedabad).

Accommodation

According to study by GITCO, presently Gujarat has total bed capacity of 2.09 lakh (classified/non classified) with average annual occupancy of 45%. Occupancy pertains not merely to hotels but also Guesthouses and Dharamshalas.

• The overall occupancy, during 2014-15, was 45.2%.

• At 24 business destinations, overall occupancy was 54.4%.

• Occupancy at 10 spiritual destinations was 36.9%.

• Occupancy at leisure destinations was 44.3%.

• Leisure segment destinations having impressive occupancy were: Sasan (60.9%), Saputara (58.6%) and Tithal (51.7%).

Initiatives by the State Government

• Tourism Policy for the State of Gujarat (2015-2020): Key objectives of the policy include

– To make Gujarat one amongst the top five States of India in tourist footfalls by 2025

– Attract more tourist through MICE tourism and leverage innovative forms of tourism such as adventure, cruise, event-based, inland waterways, medical etc

– Creation of adequate tourism related infrastructure – a paradigm shift through granting Industry Status to Tourism Sector

– Encouraging new tourism concepts like medical, religious tourism etc

– Innovative marketing and promotion of Gujarat Tourism

– Facilitation of Private Participation in Tourism

Investment in Tourism Infrastructure Igniting India’s Growth Engine 75 – Human Resource Development and employment opportunities for additional 2 million people by 2025

• Gujarat Ecotourism Policy: The diverse landscapes and rich natural assets with bio-diversity provide extremely good potential of ecotourism in Gujarat. Gujarat has envisaged focused efforts for promotion and development of ecotourism in the state. Towards this effort, Department of Forest & Environment, Government of Gujarat has developed an Ecotourism policy which was approved by the Government in 2007.

• Homestay Policy 2014: Key objectives of the policy include

– Extra income to locals by allowing them to rent their rooms to tourists

– It will facilitate tourists stay at home of rural people, who will be trained, assisted and equipped to host tourists from the country and abroad

– It will give tourists a chance to experience the Gujarati and Indian traditions besides the culture including food, by putting in with local families instead of staying in hotels

– The policy offers incentives including tax breaks, assistance for equipping the rooms and training to host the visitors to places like Mandvi beach, Dhordo desert in Kutch and Dwarka

• Regulation for Hotel and Mixed Use Development 2016

– The new policy is aimed at encouraging building taller hotels to create world class facilities for tourists and business travellers coming to Gujarat

– This policy will also boost tourism in Gujarat and facilitate further development of hotels and malls of international standards

– It permits developers to build structures as high as 70 meters and above on roads having width of 40 meters and more

3.12 West Bengal

State Economic Profile96

Covering 88,752 sq km, West Bengal, located in the eastern region of India, shares its borders with 4 Indian states (Jharkhand, Bihar, Odisha, Sikkim and Assam) and 3 countries (Bangladesh, Bhutan and Nepal). The State has a population of 91.3 million spread across 19 administrative districts. The economy of the State has been largely dominated by the service sector which contributed over 60% to the total GSDP in 2015-16 at current prices and has witnessed rapid growth with a CAGR of 15.55% during 2004-05 to 2015-16.

Strategic Advantage

• Diverse Tourism Offerings – West Bengal is the only State in the country to have snow bound Himalayas in the north, Bay of Bengal to its south and temperate plains and plateaus within its boundaries. The State possesses a bounty of natural resources and a rich heritage, making it a land full of opportunities for tourism related activities. It has a wide range of tourism products, and hence is an attractive destination that caters to both domestic and foreign tourists.

96 IBEF West Bengal Presentation, 2017

Investment in Tourism Infrastructure 76 Igniting India’s Growth Engine • Focus on Tourism in State budget – ` 3,350 million has been allocated for tourism development in the State Budget 2017-1897 which is an increase of 13% over the previous year.

` 3,350 Million 75.9 Million 15.86% CAGR Tourism budget allocation Tourists visited in 2016 Tourist arrivals between 2006- (2017-18) 2016

2213 69.6% 10,000 Rooms in Kolkata Room Occupancy rate in Rooms to be available in the (2015-16) Kolkata (2016) State by 2020 as per WB Tourism Policy 2016

State Tourism Profile98

West Bengal witnessed total tourist footfall of 75.9 million in 2016 contributing 4.64% to India tourist visits. It has ranked 8th in terms of domestic tourist visits with a total of 74.4 million visitors. In terms of foreign tourists’ arrivals, West Bengal fares better and is ranked 5th with 1.52 million visitors in 2016.

Figure 21: Percentage of Domestic tourists visiting West Bengal and other states (2016)

West Bengal 4.64%

Rest of India 95.36%

Source: Ministry of Tourism, Govt. of India

Figure 22: Foreign and domestic tourist visits in West Bengal

Domestic Tourists 2.00 Foreign Tourists 80.00 74.40 70.20 1.49 1.52 1.50 1.37 1.24 60.00 1.22 49.00 1.00 40.00

25.54 I n M i l o s

I n M i l o s 22.73 20.00 0.50

0.00 0.00 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Source: Ministry of Tourism, Govt. of India

97 http://www.wbfin.nic.in/default.aspx 98 http://tourism.gov.in/

Investment in Tourism Infrastructure Igniting India’s Growth Engine 77 Key Circuits under Development99

Under various schemes of Government of India following circuits are under development in the State, which include:

• Ministry of Tourism has sanctioned development of Beach Circuit covering Udaipur - Digha – Shankarpur – Tajpur – Mandarmani – Fraserganj – Bakkhlai - Henry Island under the Swadesh Darshan scheme with sanctioned amount of ` 85.39 crore.

• Belur has been selected under PRASAD scheme for development and beautification.

Existing Circuit

According to the West Bengal Tourism Policy 2016, six primary tourist circuits have been identified based on the geographical diversity and attractions as under:

• Darjeeling Himalayas

• Dooars foothills

• Bengal Heritage

• Coastal Bengal

• Kolkata

• Sunderbans Mangrove

The various key attractions across these the State are enlisted below in select broad categories as follows:

HIMALAYAS RELIGIOUS FOREST HISTORICAL CULTURAL BEACHES • Darjeeling • Gangasaga • Dooars • Murshidabad • Kolkata • Digha • Kurseong • Belur Math • Jaldapara • Birbhum • Shantiniketan • Mandarmani • Kalimpong • Dakshineswar • Gorumara • Bankura • Shankarpur • Rishop Rimbik • Kalighat • Sunderbans • Purulia • Tazpur • Tarapith (Mangrove Forest) • Bishnupur • Bakkhali • Lava Lolegaon • Nadia • North Dinajpur • Malda • Mirik (Bird Sanctuary) • Bolla Kali • Hooghly • Sandakphu Temple • Burdwan • Nakhoda • West Masjid Midnapore • Furfura Sharif • Cooch Behar • Imambara • St.Paul's Cathedral • St.James' Church

99 http://pib.nic.in/newsite/PrintRelease.aspx?relid=137206

Investment in Tourism Infrastructure 78 Igniting India’s Growth Engine Infrastructure assessment Connectivity

Air Road Rail • West Bengal has one • West Bengal state has a well • The length of railway in international airport and two developed road network. The the State was around domestic airports. The State State has a total road length 4,000 km, including is well connected to the rest of around 299,209 km. The 2,227.73 km run on of India and all other prime national highways running electricity. locations of the world by the through the State cover Netaji Subhas Chandra Bose approximately 2,909.8 km. • Kolkata metro is the International Airport, Kolkata. oldest metro in South • In North Bengal, the only • The Golden Quadrilateral Asia. The ambitious airport is Bagdogra; the project undertaken by the project East West importance of Bagdogra National Highway Authority of Metro which connects airport has increased with India which connects 13 states the eastern part of Siliguri becoming the gateway of the country also passes Kolkata with west to North Eastern States and a through major districts of covering a distance of vital trade and logistics hub for North Bengal. 16.6 km stretch will be the entire region. completed by 2020.

Source: IBEF West Bengal Presentation, 2017

Accommodation

West Bengal offers adequate accommodation facilities spread across all the important tourist destinations. Capital city, Kolkata has around 2,000 upscale hotel rooms spread across domestic hotel chains like Taj Group’s Taj Bengal and Gateway, ITC, Park, the Lalit Great Eastern and Oberoi, and International hotel brands like Swisshotel, Hyatt, Carlson Rezidor’s Park Plaza and Accor’s Novotel. Further, Tourism Lodges are maintained by the West Bengal Tourism Development Corporation and West Bengal Forest Development Corporation at all major tourist destinations.

MICE (Meetings, Incentive, Conferencing & Exhibitions)

West Bengal is one of the most favored MICE destinations for both government and private players. With the increasing focus of MICE tourism, the State Government. has taken several initiatives to boost the MICE infrastructure in the State. The list of existing centres for MICE tourism is as under: • Science City • Milan Mela Prangan • Nazrul Manch • International Financial Hub Convention Centre • Biswa Bangla Convention Centre

Initiatives by the State Government100

Regulatory and Policy Initiatives

The Department of Tourism, Government of West Bengal has introduced its new Tourism Policy 2016 with the vision to attain the status of being the most preferred tourist destination the country. The policy aims to focus on 3A’s –Accessibility, Amenities and Advertising to create a favorable environment for tourism through active involvement of community and tourism stakeholders to encourage private players to invest in the sector.

100 http://www.wbtourism.gov.in/, IBEF West Bengal Presentation, 2017

Investment in Tourism Infrastructure Igniting India’s Growth Engine 79 Some of the initiatives proposed under the new policy are as under:

• Target to achieve a growth rate in excess of 10% year-on-year over the next 5 years

• Increase the availability of branded hotel accommodation room in the State to 10,000 by 2020

• Encourage investments in different segments of tourism like Wellness tourism, adventure tourism, rural tourism, medical tourism and emerging areas like MICE tourism

• New destinations to be identified with backward and forward linkages and develop these into proper tourism products

• Emphasis on brand building of West Bengal with new logo and repositioning it effectively in the domestic and international tourism market through a 360 degree promotional campaign

West Bengal Tourism has also introduced Tourism Incentive scheme 2015 to attract investments. Salient features of the incentives are as under:

• Waiver of Electricity Duty for a period of 5 years

• Capital Investment subsidy at a ceiling of ` 175 lakhs

• Incentives for Adventure Tour Operators

• Reimbursement of Stamp Duty and Registration Fee ranging from 50%-70%

• Customized incentives for Mega Projects

Branding & Marketing

• The State Government has rebranded itself from ‘Beautiful Bengal’ to ‘Experience Bengal -- Sweetest Part of India’

• ‘West Bengal Tourism’ Mobile App has been introduced

• New tourism webportal (www.wbtourism.gov.in) has been introduced in collaboration with NIC

Promotion of PPP based Projects

• The State Government has identified 11 potential tourism sites in the State to be developed in PPP mode

Focus on Community Tourism Development

• Draft Homestay Tourism Policy is ready for release

• The Department of Tourism has linked homestays in the State through its portal

Helicopter Services

• Helicopter Services have been introduced between Kolkata and other tourism destinations like Shantiniketan, Maldah, Durgapur, Balurghat, Gangasagar, Haldia and Digha

Promotion of Ecotourism

• Heritage eco tourism project at Jhargram Rajbari, rural tourism project at Jaychandi Pahar and Muruthbaha ecotourism project at Susunia have been completed

Tourism Destination Projects

• Tourism Destination Projects in Motijhil, Murshidabad, Jhargram, Paschim Midnapore and Shtiong Home Stay Projhect at Darjeelijng have been completed

Investment in Tourism Infrastructure 80 Igniting India’s Growth Engine 4. Way Forward Unleashing Tourism Development through Sustainable Infrastructure Development

Investment in Tourism Infrastructure Igniting India’s Growth Engine 81 4. Way Forward Unleashing Tourism Development through Sustainable Infrastructure Development

Tourism has emerged as a key growth engine in the 21st century, coupling economic growth including foreign exchange earnings and employment creation with social harmony and cross-cultural interactions to foster global peace and prosperity. It offers opportunities to both skilled and unskilled sectors, and the spillover benefits have the potential to promote sustained, inclusive growth.

India’s travel and tourism industry is expected to be the 3rd fastest growing sector in terms of total GDP over the next decade. The Ministry of Tourism, Government of India is aggressively pursuing growth-oriented policies to leverage the immense growth potential of tourism, and infrastructure development is one of the key pillars to gain higher tourist numbers as well as tourism receipts. The following areas hold the key to spur accelerated tourism infrastructure development.

• Boost Private Sector Investment: The current norms for inclusion of hotels into ‘Social and Commercial Infrastructure Category’ in the Harmonised Master List of Infrastructure Sub- sectors is applicable for Three-star or higher category classified hotels located outside cities with population of more than 1 million or Hotels with project cost of more than ` 200 crore each in any place in India and of any star rating. Amending the latter to include smaller projects of ` 20-25 crore would help capture a larger segment of projects aiding development of infrastructure in Tier II and III cities.

• Improve Ease of Doing Business: Improvement in Ease of Doing Business rankings will have a significant impact in attracting investments for tourism infrastructure. 100% FDI has been allowed under the automatic route in the tourism and hospitality sector, including tourism construction projects — such as development of hotels, resorts and recreational facilities. The Ministry of Tourism has set up a website for online recognition of travel trade service providers. While efforts are going on to improve on this index, there is still a significant scope to ensure uniformity and consistency in regulatory processes across states, including single window clearances.

• Private Sector Participation to Mobilize Existing Government Infrastructure: There is a large inventory of tourism infrastructure owned by state tourism departments as well as interconnected sectors like forest bungalows, many of which boast of exquisite locations that are lying idle or have further potential to upscale and attract more visitors, thereby also becoming self-sustainable. The private sector can be roped in to operate, improve or refurbish such properties and thus also boosting the room inventory. PPP models can be explored towards the same.

Investment in Tourism Infrastructure 82 Igniting India’s Growth Engine • Medical and Wellness Tourism: Over the past few years, the government’s efforts to promote and position Yoga and traditional Indian wellness therapies has paid dividends with World Yoga Day being observed globally on June 21 each year. India holds a competitive advantage in offering these products and services, and is also one of the most competitive destinations offering specialized treatments at low costs. While a National Medical & Wellness Tourism Board has been constituted under the chairmanship of Minister for Tourism, the Ministry of tourism has recently released the ‘Compendium on Guidelines for Ayush Facilities’. Need of the hour now is to attract investments to create supporting infrastructure that can help reap dividends of this global movement led by India.

• Developing MICE Infrastructure: While MICE sector has experienced growth in the Indian sector in the past decade, India still has less than 0.5% share of the world meetings and conventions market. Creating more world-class infrastructure can enable India to attract global conventions and meetings in tourism as well as other fields like technology, science, engineering and medicine among others to create a rich pool of ideas and business linkages.

• Coastal Area Development: While India is blessed with over 7000 km of coastline, the development of beaches is limited to few pockets along the coast. Beaches/ Coastal tourism forms one of the top tourism themes in India and is also a preferred theme for foreign tourists visiting India. To leverage on this coastal advantage of India, priority can be accorded for identifying a minimum of 100 coastal destinations/ beaches and develop the basic tourism infrastructure in addition to ensuring cleanliness at these locations.

• Heritage Destinations: The ancient Indian Heritage is well reflected in the rich collection of Heritage sites and monuments across India, largely maintained by ASI and respective state Archaeology departments. However, many of these monuments lack the basic infrastructure for maintenance and for tourists. Many of these also face challenges that can lead to total destruction. A concerted effort needs to be planned and implemented on priority that ensures the basic upkeep, maintenance, landscaping and tourist amenities that will not only ensure its maintenance, but also ensure economic self-sustenance. If needed, a joint action committee can be structured between the states and ASI to select the top priority sites and ensure effective implementation of developmental measures. PPP models can potentially provide financial as well as operational support.

• Investments in Small and Micro Ventures through MSME funds: India’s immense cultural and natural heritage is managed and conserved by local communities and small entrepreneurs whose business models now require scale-up through capital infusion, capacity building and skill building support. Convergence of Government Schemes with organizations like NABARD, SIDBI among others can be channelized into developing tourism infrastructure in rural and hinterland areas through creation of an appropriate institutional model.

• Niche-Based PPP Interventions: Tourism offers a wide variety of recreational experiences and activities, and each of these areas have unique requirements when it comes to infrastructure development. For instance, developing Ecotourism, Agri-tourism and Community-based tourism models requires construction of public conveniences, waste management models among others while developing Cruise Tourism would require development of passenger docks and terminals. Focusing on such niche-based developments can improve the efficiency of PPP models.

Investment in Tourism Infrastructure Igniting India’s Growth Engine 83 NOTES

Investment in Tourism Infrastructure 84 Igniting India’s Growth Engine Investment in Tourism Infrastructure Igniting India’s Growth Engine 85 Investment in Tourism Infrastructure 86 Igniting India’s Growth Engine