Cost - benefit study of tourism

This study dealing with the cost-benefit analysis of investments for promoting tourism in India was undertaken by the NCAER at the request of the Department of Tourism, Ministry of Tourism and Civil Aviation, Government of India. The importance of tourism in India has been well-recognised as a source of earning foreign exchange. In this study, an attempt has been made for the first time in India to estimate the economic contribution of tourism to the national income, total employment and tax revenues accruing to the Government. It is estimated that the gross receipts from the expenditure of foreign tourists in India increased very rapidly from about Rs. 150.4 million in 1965-66 to Rs. 273.7 million in 1968-69 and to Rs. 621.9 million in 1972-73. The cost of tourism is measured in this study in terms of outflow of foreign exchange. The estimated cost of tourism turned out to be only 5.1 per cent of the gross income from tourists in 1972-73 compared to 7.6 per cent in 1968-69 and 6.2 per cent in 1965-66. The estimates presented in this report also show that since 1965-66, employment in tourism sector has been increasing at a significant pace.

An attempt has also been made in this study to measure the impact of tourism on the economy of Jammu and Kashmir. It is found that while the total income impact of domestic tourists in the State has been more than that of international tourists, the additional income generating effect of foreign visitors is more than that of the Indian visitors. This study also brings out the limitations of the concept of tourism multiplier. Due to limitations of data availability, no attempt could be made to estimate relevant multiplier coefficients for the tourists' expenditure in Jammu and Kashmir.