INCREDIBLE INDIA: TRAVEL AND TOURISMThe tourism and hospitality industry is one of the largest service industries in India.

Tourism is an integral pillar of the Make in India programme. Tourism plays a role of significant economic multiplier and becomes critical since India has to grow at rapid rates and create jobs.

India offers geographical diversity, world heritage sites and niche tourism products like cruises, adventure, medical, eco-tourism, etc. Incredible India has spurred growth in Tourists Arrivals and Employment.

As world economies restart their engines in a bid to regain lost ground due to the Covid-19 pandemic, India too shows signs of economic buoyancy and promise. India’s Make in India initiative holds a key to the global economic revival, something that should interest Australian government ministries, corporate sector, entrepreneurs, institutions seeking R&D collaborations and Australia Inc in general, among others. India assumes greater importance as several major world economies including American, Japanese, German, British and South Korean look to move out and diversify their businesses from China. India has jumped to 63rd rank in the World Bank’s Ease of Development 2020 report, and has also been ranked as the 9th largest recipient of Foreign Direct Investment destination in 2019 by the World Investment Report 2020 of the United Nations Conference on Trade and Development (UNCTAD).

India’s ranking in the Travel and Tourism Competitive Index (TTCI) of World Economic Forum moved from 52nd position in 2015 to 40th position in 2017. Now India has moved up by another 6 positions and ranked at 34th position in 2019.
Tourism tends to encourage the development of multiple-use infrastructure including hotels, resorts & restaurants, transport infrastructure (aviation, roads, shipping & railways) and healthcare facilities.

  • By 2028, Tourism & Hospitality is forecasted to earn $50.9 bn as visitor exports compared to $28.9 bn earned in 2018
  • By 2029, Travel & Tourism will account for nearly 53 million jobs as compared to the 43 million jobs directly in 2018 (8.1% of total employment)
  • By 2030, India is expected to be among the top five business travel market
  • 100% FDI allowed under automatic route
  • 100% FDI allowed in tourism construction projects, including the development of hotels, resorts, and recreational facilities
  • $460 bn contribution to India’s GDP by 2028

Travel and tourism being the largest service industry in India was worth $234 bn in 2018. The industry has become the third-largest Foreign Exchange Earner in India with a 17.9% growth in Foreign Exchange Earnings (in rupee terms) in March 2018 over March 2017.

According to The World Travel and Tourism Council (WTTC), tourism generated $240 bn or 9.2% of India’s GDP in 2018 and supported 42.67 mn jobs which is 8.1% of its total employment.

The sector is predicted to grow at an annual rate of 6.9% to $460 bn by 2028 which is 9.9% of GDP.

FTAs in April 2019 were 7,71,353 viz-a-viz 7,45,051 in April 2018 registering a growth of 3.5%. Further to this, FTAs during the period January-April 2019 were 39,35,293 viz-a-viz 38,60,871 in January- April 2018 registering a growth of 1.9%.

During April 2019 total of 2,01,137 tourist arrived on e-Tourist Visa as compared to 1,57,094 during the month of April 2018 registering a growth of 28.0%. Further to this, during January- April 2019, a total of 11,08,665 tourist arrived on e-Tourist Visa as compared to 9,18,792 during January-April 2018, registering a growth of 20.7%.

ROADS AND HIGHWAYS TO GROWTH

India with a total road network of 5.5 mn Km comprises of national & state highways and urban & rural roads. National highways account for 2% of the total road network and carry over 40% of total traffic.

NHAI has accomplished construction of 3,979 km of national highways in the financial Year 2019-20. This is the highest ever highway construction achieved in a financial year.

The construction pace as noticed in last years has seen a steady growth with 3,380 Km construction in the FY 2018-19. Continuing the same trend with the development of 3,979 km of national highways during FY 2019-20

India has a well-developed framework for Public-Private-Partnerships (PPP) in the highway sector. Asian Development Bank ranked India at first spot in PPP operational maturity and also designated India as a developed market for PPPs.

The Government of India (GoI) is planning to expand the national highway network to over 200,000 km. The Government launched the BharatmalaPariyojana, which aims to build 66,100 km of economic corridors, border and coastal roads, and expressways to boost the highway network. It is envisaged that the programme will provide 4-lane connectivity to 550 districts, increase the vehicular speed by 20-25% and reduce the supply chain costs by 5-6%. The first phase of the programme will bring in $ 82 bn investments by 2022 for the development of 34,800 km of highways.

Industry Scenario

The GoI has given a massive push to infrastructure by allocating about $1.4 Tn for infrastructure to be invested until 2025.

The government has forecasted an investment of $350 bn towards road infrastructure in the North-East region of India during 2020-2025.

The market for roads and highways is projected to exhibit a CAGR of 36.16% during 2016-2025, on account of growing government initiatives to improve transportation infrastructure in the country. Almost 40% (824) of the 1,824 PPP projects awarded in India until December 2019 were related to roads.

The highways sector in India has been at the forefront of performance and innovation. The government has successfully rolled out over 60 projects worth over $10 bn based on the Hybrid Annuity Model (HAM). HAM has balanced risk appropriately between private and public partners and boosted PPP activity in the sector.

Asset recycling, through the toll-operate-transfer (ToT) model has been taken up by the National Highways Authority of India (NHAI) for 100 highways. The first two bundles of 9 highways each were monetized successfully for an investment of over $2 bn.

As one of the biggest reform, the NHAI has gone ‘Fully Digital’, with the launch of unique cloud based and Artificial Intelligence powered Big Data Analytics platform – Data Lake and Project Management Software. The entire project management work flow of NHAI is transformed from manual to online portal based, wherein the complete project execution operations including ‘workflow with time lines’ and ‘alert mechanism’ have been configured. All project documentation, contractual decisions and approvals are now being done through portal only.

RAILWAYS: TOUCHING BULLET SPEEDS

India has the fourth-largest railway system in the world, lagging behind only US, Russia and China.

The Indian rail network is spread across 67,368 km (approximately 93,000 running track km) with about 7,300 stations. The railways run close to 13,000 passenger trains that carry over 23 mn passengers daily. The Indian Railways transported over 1,221.39MT of freight in 2019.

  • Total 28 Projects of 1273 Km length got completed &commissioned during FY 2019-20
  • Indian Railways is the single largest employer in India and eighth largest in the world; employing close to 1.4 mn people.
  • Indian Railways envisages a prospective investment of $190 bn in the next 5 years
  • Mumbai-Ahmedabad high-speed rail project sanctioned at a total cost of $15 bn
  • Railway Electrification works completed on a total of 5,782 Route kms during the year
  • 100% FDI allowed in railway infrastructure under the automatic route.

Industry Scenario

The Indian Railways’ passenger earnings in 2017-18 have been the highest ever and clocked a 4.86% increase to $7.55 bn from $7.2 bn during the previous financial year.

Indian Railways aspires to add 1.5% to the country’s GDP by building infrastructure to support 40% modal freight share of the economy.

Two Dedicated Freight Corridors (DFC), one on the Western route (Jawaharlal Nehru Port to Dadri) and another on the Eastern route (Ludhiana to Dankuni), have been fast-tracked.

The Indian Railways is looking electrify the entire network by 2025 which will lead to energy savings of $ 1.55Bn.

India Railways is focused on:

  • 3,360 km dedicated freight corridors by 2020
  • 700 stations to be fed with solar power in the medium term
  • The Ministry of Railways has decided to redevelop 90 railway stations into world-class transit hubs
  • Track Renewal speeded up – 2148 km old rails have been replaced with new rails upto November 2017
  • Electric Traction of 2367 route kilometre has been achieved

Make in India