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Akshay · 07-28-2006, 11:26 AM

An old article from the ministry of external affairs

Tourism

India has significant potential for becoming a major global tourist destination. The country witnessed foreign tourist arrivals of 2.75 million in 2001.

• Travel and tourism is the second highest foreign exchange earner for India, and the government has given organisations in this industry export house status. The industry is waking up to the potential of domestic tourism as well, with an estimated 4.7 billion domestic trips in 2001. Tourism spending within India in 2001 was US$ 22 billion.

• There is considerable government presence in the travel and tourism industry. Each state has a tourism corporation, which typically runs a chain of hotels /motels and operates package tours, while the central government runs the India Tourism Development Corporation. Divestment of these state-run tourism corporations have either already taken place or are in process.

• Incoming foreign tourist arrivals have shown a 6% compounded annual growth rate over the last 10 years. The government has realised the potential and has advanced several incentives to promote infrastructure growth in the tourism sector.

• Current investments are likely to see hotel room capacity increase by 20% over the next three years, with several international hotel chains entering the hotel industry. Similar growth is anticipated in air travel capacity.

Policy Initiatives

• The New Tourism Policy released in May 2002 has outlined the following policy initiatives for the tourism sector:

• The new policy is built around the 7-S Mantra of Swaagat (welcome), Soochanaa (information), Suvidhaa (facilitation), Surakshaa (security), Sahyog (cooperation), Sanrachnaa (infrastructure) and Safaai (cleanliness).

• The new policy envisages making tourism a catalyst in employment generation, wealth creation, development of remote and rural areas, environment preservation and social integration. The policy also aims to spruce up economic growth and promote India’s strengths as a tourism destination that is both safe and at the same time exciting.

• The policy proposes the inclusion of tourism in the concurrent list of the Constitution so as to enable both the central and state governments to participate in the development of the sector.

• No approval is required for foreign equity of up to 51 per cent in tourism projects. Enhanced equity is considered on a case-to-case basis. NRI investment is allowed up to 100%.

• Approvals for Technology agreements in the hotel industry are available on an automatic basis, subject to the fulfilment of certain specified parameters.

• Concession rates on customs duty of 25% for goods that are required for initial setting up, or for substantial expansion of hotels.

• 50% of profits derived by hotels, travel agents and tour operators in foreign exchange are exempt from income tax. The remaining profits are also exempt if reinvested in a tourism related project.

• Approved hotels are entitled to import essential goods relating to the hotel and tourism industry up to the value of 25% of the foreign exchange earned by them in the preceding licensing year. This limit for approved travel agents/tour operators is 10%.

• Hotels located in locations other than the four major metro cities are entitled to 30% deduction from profit, for a ten-year period.

• The expenditure tax has been waived in respect of hotels located in the hills, rural areas, places of pilgrimage or specified place of tourist importance.

http://www.tourismofindia.com

Benefits to customers

Since the economy opened up in 1991, several foreign chains have entered the Indian market, including Hyatt, Four Seasons, Hilton, Regent, Radisson and Holiday Inn. The result is that the quality of service has improved. The overseas players have brought in efficient systems and service standards from Europe and the US. Competition has forced Indian hotel groups to improve their standards. The customer has benefited in many ways. The influx of foreign players has led to major price wars in the industry. In an attempt to woo customers, Indian hotels have reduced their tariffs significantly. According to one hotelier, "India has become a normal market -– like others in the West or in Southeast Asia – with demand and supply determining the price".

07-28-2006, 11:26 AM	#2 (permalink)
Akshay formerly ab041937 *Senior Contributor* Join Date: 06-27-05 Posts: 1,523 Country:	An old article from the ministry of external affairs Tourism India has significant potential for becoming a major global tourist destination. The country witnessed foreign tourist arrivals of 2.75 million in 2001. • Travel and tourism is the second highest foreign exchange earner for India, and the government has given organisations in this industry export house status. The industry is waking up to the potential of domestic tourism as well, with an estimated 4.7 billion domestic trips in 2001. Tourism spending within India in 2001 was US$ 22 billion. • There is considerable government presence in the travel and tourism industry. Each state has a tourism corporation, which typically runs a chain of hotels /motels and operates package tours, while the central government runs the India Tourism Development Corporation. Divestment of these state-run tourism corporations have either already taken place or are in process. • Incoming foreign tourist arrivals have shown a 6% compounded annual growth rate over the last 10 years. The government has realised the potential and has advanced several incentives to promote infrastructure growth in the tourism sector. • Current investments are likely to see hotel room capacity increase by 20% over the next three years, with several international hotel chains entering the hotel industry. Similar growth is anticipated in air travel capacity. Policy Initiatives • The New Tourism Policy released in May 2002 has outlined the following policy initiatives for the tourism sector: • The new policy is built around the 7-S Mantra of Swaagat (welcome), Soochanaa (information), Suvidhaa (facilitation), Surakshaa (security), Sahyog (cooperation), Sanrachnaa (infrastructure) and Safaai (cleanliness). • The new policy envisages making tourism a catalyst in employment generation, wealth creation, development of remote and rural areas, environment preservation and social integration. The policy also aims to spruce up economic growth and promote India’s strengths as a tourism destination that is both safe and at the same time exciting. • The policy proposes the inclusion of tourism in the concurrent list of the Constitution so as to enable both the central and state governments to participate in the development of the sector. • No approval is required for foreign equity of up to 51 per cent in tourism projects. Enhanced equity is considered on a case-to-case basis. NRI investment is allowed up to 100%. • Approvals for Technology agreements in the hotel industry are available on an automatic basis, subject to the fulfilment of certain specified parameters. • Concession rates on customs duty of 25% for goods that are required for initial setting up, or for substantial expansion of hotels. • 50% of profits derived by hotels, travel agents and tour operators in foreign exchange are exempt from income tax. The remaining profits are also exempt if reinvested in a tourism related project. • Approved hotels are entitled to import essential goods relating to the hotel and tourism industry up to the value of 25% of the foreign exchange earned by them in the preceding licensing year. This limit for approved travel agents/tour operators is 10%. • Hotels located in locations other than the four major metro cities are entitled to 30% deduction from profit, for a ten-year period. • The expenditure tax has been waived in respect of hotels located in the hills, rural areas, places of pilgrimage or specified place of tourist importance. http://www.tourismofindia.com Benefits to customers Since the economy opened up in 1991, several foreign chains have entered the Indian market, including Hyatt, Four Seasons, Hilton, Regent, Radisson and Holiday Inn. The result is that the quality of service has improved. The overseas players have brought in efficient systems and service standards from Europe and the US. Competition has forced Indian hotel groups to improve their standards. The customer has benefited in many ways. The influx of foreign players has led to major price wars in the industry. In an attempt to woo customers, Indian hotels have reduced their tariffs significantly. According to one hotelier, "India has become a normal market -– like others in the West or in Southeast Asia – with demand and supply determining the price". __________________ If at first you don't succeed, call it v1.0!