Editorial Articles

Issue no 26, 25 September - 01 October, 2021


Road to Revival of Tourism Sector Post Covid-19 Setbacks

Industry Scenario

Tourism sector is a major engine for economic growth and generation of employment opportunities. The contribution of tourism for both direct and indirect jobs in the country was 80.54 million in 2017-18 and 88.72 million in 2018-19. Travel and Tourism was the largest service industry in India worth $234 bn in 2018. The industry was also one of the largest Foreign Exchange Earners in India with earnings of $29.962 billion over Jan-Dec 2019, equating a growth of 4.8% over the previous year.

However, since the beginning of 2020, like all other sectors of the economy, the tourism sector suffered enormous blow owing to the COVID-19 pandemic. As per the report entitled "COVID-19 and Tourism an Update: Assessing the Economic Consequences" published by the UN Conference on Trade and Development (UNCTAD) and the UN World Tourism Organization (UNWTO), the collapse of international tourism due to COVID-19 could cost the world at least $4 trillion in terms of global GDP for 2020 and 2021. To assess the extent of losses to India's tourism sector, the Ministry of Tourism engaged National Council of Applied Economic Research (NCAER) in January 2021 to conduct study on "India and the Coronavirus Pandemic: Economic Losses for Households Engaged in Tourism and Policies for Recovery". As per the results of the study: (i) Due to overall economic slowdown during 2020-21, tourism economy or tourism direct gross value added (TDGVA) saw a fall of 42.8 percent in Q1; 15.5 percent in Q2 and fall of 1.1 percent in Q3. (ii) Due to significant drop in tourist arrivals and hence tourism expenditure, during the pandemic, it is estimated that TDGVA plummeted by as much as 93.3 percent in Q1 of 2020-21 over its level in the same quarter of previous year. It picked up slightly to post a fall of 79.5 percent in Q2 and that of 64.3 percent in Q3. (iii) A significant number of jobs were lost in the tourism sector once the lockdown was implemented. 14.5 million jobs during Q1, 5.2 million during Q2 and 1.8 million jobs during Q3 are expected to have been lost.

Replying to a query in the Lok Sabha during the Monsoon Session of the Parliament, Minister for Tourism Shri G Kishan Reddy said that in order to address the effects of COVID-19 pandemic on tourism sector, Government of India has taken a number of measures.

Fiscal and Relief Measures

  • Under the AtmaNirbhar Bharat Package, Rs. 3 lakh crore collateralfree automatic loan has been made available for MSMEs. The loan will have 4-year tenure and 12-month moratorium
  • The Government has launched Emergency Credit Line Guarantee Scheme (ECLGS) to support eligible Micro, Small and Medium Enterprises (MSMEs) and business enterprises in meeting their operational liabilities and restarting their business. The scope of the scheme has been enlarged with introduction of ECLGS 3.0 to cover business enterprises in Hospitality, Travel & Tourism and Leisure & Sporting sectors.
  • Under the new loan guarantee scheme for COVID-affected sectors, working capital/personal loans will be provided to people in tourism sector to discharge liabilities and restart after being impacted due to COVID-19. The scheme will cover 10,700 regional level tourist guides recognised by the Ministry of Tourism and tourist guides recognised by the State Governments and Travel and Tourism Stakeholders (TTS) recognized by the Ministry of Tourism. TTS will be eligible to get a loan upto Rs. 10 lakh each while tourist guides can avail loan upto Rs. 1 lakh each. There will be no processing charges, waiver of foreclosure/ prepayment charges and no requirement of additional collateral. The Scheme is being administered by the Ministry of Tourism through NCGTC (National Credit Guarantee Trustee Company Ltd.)
  • In June this year, the Finance Ministry announced release of SEIS (Service Exports from India Scheme) scrips for 2019-20. Considering the circumstances after COVID-19, the Department of Expenditure, Ministry of Finance, agreed to the proposal of the Department of Commerce for continuation of SEIS for 2019-20 with a financial allocation of Rs. 2,061 crore. The SEIS offers incentives to registered service providers with transferable duty credit scrips as a percentage of their net foreign exchange earnings. These SEIS scrips can be used by service providers to pay several central duties and taxes, including the basic customs duty. SEIS scrips are currently given to tour operators on their forex earnings.
  • The Central Government also gave relief to the tourism industry from various regulatory compliances under Income Tax Act, companies Act and GST Act for varying period in the wake of COVID-19 crisis to ensure business continuity and survival.
  • The RBI also extended moratorium on term loans till December 31, 2020.
  • Once visa issuance is restarted, the first 5 lakh Tourists Visas will be issued free of charge. The benefit of free of charge visa will be available only once per tourist during the issuance of the first 5 lakh tourist visas (free of charge visas). The scheme will be applicable till March 31, 2022 or till 5,00,000 visas are issued, whichever is earlier.
  • Further, the Ministry of Tourism has issued modified guidelines for Recognition of Tourism Service Providers which became effective from January 2021. As per the modified guidelines, category of Greenshoot/ Start-up- Agencies is being introduced for the first time. This is in keeping with the policy of the Government for encouraging Start-Ups and will also further the cause of 'AtmaNirbhar India'.
  • With an aim to incentivize stakeholders in the Tourism industry, the Guidelines for the Scheme of Market Development Assistance (MDA) for providing financial support to stakeholders for the promotion of Domestic Tourism have been modified to enhance the scope and reach of the scheme, so as to provide maximum benefits to the stakeholders.
  • Additional promotional activities have been incorporated including online promotions and the extent of financial assistance permissible has been enhanced.
  • Validity of approval or certifications of hotels and other accommodation units whose project approval/re-approval and classification/reclassification have expired/were likely to expire, has been extended upto September 30, 2021.
  • Recognition of Travel Agents, Tour Operators, Tourist Transport Operators by the Ministry of Tourism has been extended automatically by six months. Those who have submitted applications for recognition by the Ministry have been given provisional recognition for six months, pending completion of required procedures.


The above moves are expected to immensely help the stakeholders in the tourism sector by providing them much required liquidity to gear up for the operations in near future. Similarly, it is also expected to provide much needed relief to the government approved tourist guides who have been affected by the ongoing slowdown in the sector due to the pandemic.

Operational Recommendations

Meanwhile, Standard Operating Procedures (SOPs) and guidelines for safe resumption of business with easing of lockdown restrictions have been issued for various segments of the travel and hospitality industry and circulated amongst all stakeholders.


  • Meanwhile, Standard Operating Procedures (SOPs) and guidelines for safe resumption of business with easing of lockdown restrictions have been issued for various segments of the travel and hospitality industry and circulated amongst all stakeholders.
  • An initiative called SAATHI (System for Assessment, Awareness & Training for Hospitality Industry) has been developed. The Ministry of Tourism has partnered with the Quality Council of India to implement this initiative. The initiative aims to ensure safety and health of employees and guests; identify vulnerable areas within the organization which needs to be plugged; help the hospitality unit in complying with the COVID-19 related regulatory requirements, and ensuring continuity in operations.


Capacity Building for Service Providers

In addition to various fiscal and relief measures to support the tourism sector from the impact of the COVID-19 pandemic, the Ministry of Tourism has also taken steps to increase the opportunities of employment in tourism sector. The Ministry has put in place the Scheme of "Capacity Building for Service Providers" (CBSP) to provide education, training and certification to the tourism service providers at every level. The main objectives of this scheme are to train and up-grade manpower at every strata of service and to provide professional expertise to the local populace as well as to create employable capacity in the tourism sector both in urban and rural areas. Presently, the programmes being conducted under the CBSP Scheme are Hunar Se Rozgar Tak (HSRT), Skill Testing & Certification (ST&C) for existing service providers, Tourism Adventure and Escort Courses, Linguistic Tourist Facilitators (LTF), Sensitization Programme/ Tourism Awareness Programme (for existing service providers) and entrepreneurship Programme. Besides the above, the Ministry has launched destination based capacity building programme so that tourism service providers can take the courses without having to travel to far-off cities where the institutes are usually located and in turn ensuring that the sector is no longer serviced by untrained hands.

New Policies

The Central Government plays an important role in developing a strong visitor economy which is evident from the fact that the Ministry of Tourism has also undertaken a slew of initiatives, such as the Incredible India 2.0 campaign focusing on niche tourism products including wellness and adventure tourism, as well as investment into the industry through schemes, such as PRASHAD and Swadesh Darshan. Further, the Ministry of Tourism has outlined policies to support new tourism products such as development and promotion of caravans and caravan camping parks. The Ministry of Road Transport and Highways has introduced a new scheme-All India Tourist Vehicles Authorisation and Permit Rules, 2021. Through this scheme, a tourist vehicle operator can receive an 'All India Tourist Authorisation/Permit' online within 30 days of submitting an application.

Thrust on Domestic Tourism

India has a robust domestic market which could soften the impact as compared with nations that rely largely on international tourists. At least 24 million Indian tourists travel abroad each year and spend an estimated $25 billion. Given the international travel restrictions in place, the government has taken the opportunity to retain these high spending tourists by incentivizing domestic travel. Critical to the success of this would be to allay the anxieties of tourists by ensuring that robust protocols for safety and hygiene are in place.

The Ministry of Tourism launched the Dekho Apna Desh initiative in January 2020 with the objective of creating awareness among the citizens about the rich heritage, culture, lesser known destinations, local destination of the country to promote domestic tourism. This initiative is in line with the Independence Day address of the Honourable Prime Minister asking every citizen to visit at least 15 destinations by the year 2022. Under this initiative, Tourism Ministry is carrying out promotional activities like webinars, online pledge and quiz programmes to generate awareness among the public about the country and its tourism destinations/products including lesser known destinations, heritage, culture local tourism destinations, etc. Dekho Apna Desh initiative is being promoted extensively on social media accounts and website of the Ministry and by Domestic India Tourism offices. The field offices of Ministry of Tourism across India have been undertaking various promotional activities with the objective of showcasing the tourism potential of the country and raising awareness regarding local tourism and promoting local religious and non-religious spots to the tourists coming from both outside and within the state. Road shows are being held at a number of locations to promote domestic tourism. Concerted efforts are being made in creating awareness on protocols of safety and security among the tourists as well as service providers in terms of India being safe destination to travel in postCOVID scenario.

Leveraging Rural income through Tourism

The COVID-19 induced lockdown in India was a huge economic shock. It started across the country on March 24, 2020 and is still ongoing with restrictions in one form or other. It stalled the economy with complete closure imposed on enterprises across all sectors. Even though agricultural activities were exempted, in the initial phases of the lockdown the agriculture value chain also faced large-scale disruptions. This had a serious detrimental effect on the rural Indian economy. The coronavirus pandemic has also triggered a massive reverse migration from the urban to rural areas in large parts of the country. Considering the unique role tourism plays in providing livelihood opportunities outside big cities while preserving cultural and natural heritage of the country, Rural Tourism has been identified as one of the niche tourism areas for development. With this, the Government plans to adopt a comprehensive strategy to encourage rural tourism in India under the Atma Nirbhar Bharat to revive the economy. Minister for Tourism Shri G Kishan Reddy told the Parliament on 19th July this year that the Ministry of Tourism has been actively working on promotion and development of this niche area of tourism. The Ministry of Tourism has accordingly formulated a Draft National Strategy and Roadmap for Development of Rural Tourism in India—an initiative towards AtmaNirbhar Bharat. Driven by the spirit of "Vocal for Local", rural tourism can contribute significantly to the mission of AatmaNirbhar Bharat. In order to develop rural tourism in the country, the strategy focuses on the following key pillars:


  • Model policies and best practices for rural tourism 
  • Digital technologies and platforms for rural tourism
  • Developing clusters for rural tourism 
  • Marketing support for rural tourism 
  • Capacity building of stakeholders 
  • Governance and Institutional Framework


Draft National Strategy and Roadmap for Development of Rural Tourism in India focuses on generating income and jobs in rural areas and empower local communities, youth and women, fulfilling the vision of AatmaNirbhar Bharat.

Travel and tourism sector is one of the key contributors to Indian economy, and the government is taking proactive measures to help the industry navigate the COVID-led challenges. These measures are expected to infuse the required liquidity to support operations in near-term. It will also support Government-approved tourist guides, who have been hit by the ongoing slowdown in the sector amid the pandemic and will help the sector to achieve the projected GDP contribution of Rs. 12.68 trillion by 2028.



Compiled by EN team) (Content and images credit: tourism.gov.in