Tourism Infrastructure in Maharashtra on course but distant from realizing its true potential

January 1, 2018 | Dr. Kiran Nanda (Economist)

Tourism today is one of the major sectors in global commerce. It contributes nearly 9% of the world GDP – through direct, indirect and induced impact. It accounts for $1.6 trn. Of world exports - 6% of the world exports. Viewing the global travel scenario, almost 30-40% of population in the US and Europe leisure travel every year, around 8%in China whereas in India this number is less than 1%. This depicts the huge growth potential of the Indian market.


Currently Indian tourism has a share of 6.7% in its GDP, which is increasing. It is roughly $120 bn Industry, employs 37 mn people and by 2020 is stated to become bigger than the IT industry. Judged in terms of any parameter like by type, by purpose of visit, by tourist profile, by average duration of stay, by mode of travel, competition forecast and emerging opportunities, the travel & tourism sector is expected to grow at a compound rate of over 7% during 2016-2021. Basis is raising foreign tourist footfall, robust infrastructural developments, increasing recreational tourism, growing efforts by the Centre as well as states at promoting tourism including collaborative tourism and diversified service offerings by pro-active companies. With conceptualization of the iconic ‘Incredible India campaign’, the tourism scenario received tremendous boost.


Tourism sector’s employment generation capability is enormous- roughly said that an average of 50 jobs get generated per $1 mn in sales. Expenditure by domestic & foreign visitors carries a cascading impact via its multiplier effect throughout the economy. Multiplier is estimated at 3.2 implying that for every dollar spent on tourism, additional $3.2 gets generated.


January 25th is marked as the India’s National Tourism Day to create awareness about significance of tourism for the economy.


Coming to Maharashtra, it has lately become alive to the need for boosting tourism. Tourism can become a powerful growth engine for the Maharashtra economy only within efficient tourism infrastructure in place. Tourism & Tourism Infrastructure coverage is vast and growing. It encompasses both soft as well as physical infrastructure and contains a variety of facilities like medical & wellness tourism; adventure tourism; leisure &recreational tourism, beach tourism, Gandhian tourism, rural tourism, religious tourism, wine tourism and recently added mines tourism. All these require soft infrastructure which includes mainly governance aspects especially observance of just in time principle, least wastages, quality & suitable skills, best management norms and experience of a healthy swatch life.


Current State- Maharashtra Tourism


Maharashtra is a nation within a Nation-- the third largest state - in terms of population and area - in the country. It is also the world's second-most populous sub-national state (112 mn people). Mumbai, its capital, is among the world’s largest and most vibrant cities in the world. It is also the financial and entertainment capital of the country. Nagpur is Maharashtra's second capital, which also is its winter capital.


Tourism being regional, Maharashtra is creating its own special packages to sell its advantages as tourism. Among states it tops in foreign tourist arrivals (20.8%) and is counted among leading states for domestic tourists (7.2%). Offers a variety of destinations for its tourists-- business, cultural, historical, geographical and religious etc. Ancient and medieval Maharashtra included the empires of the Satavahana dynasty, Rashtrakuta dynasty, Western Chalukyas, Mughals and Marathas. It has several popular Hindu places of pilgrimage such as Pandharpur, Dehu, Alandi, Hazur Sahib Gurudwara at Nanded, Sai Baba shrine at Shirdi and Dikshabhumi at Nagpur. The state’s rich history, tradition and cultures evident in its ancient forts, monuments and cave temples. Ajanta Caves in Aurangabad district of Maharashtra state of India are about 30 rock-cut Buddhist cave monuments which date from the 2nd century BCE to about 480 or 650 CE. Ellora caves in Maharashtra are about 29 kilometres (18 miles) northwest from the city of Aurangabad, 300 kilometres (190 miles) east-northeast from Mumbai, and about 100 kilometres (62 miles) west from Ajanta Caves. Maharashtra’s incredible historical and cultural sites merit world heritage status. Besides, it is blessed with a long coastline of 720 kilometers along the lush green Konkan region. Western Ghats and Sahyadri mountain range with attractive hill stations and water reservoirs.Vidarbha region of Maharashtra and its dense forests house several wild life sanctuaries and nature parks. Aurangabad, the second most urbanized state in India, is considered the tourism capital of Maharashtra. Maharashtra’s urban centers include Mumbai, Pune, Nashik, Aurangabad, Nanded and Nagpur.


Maharashtra has ambitious plans to boost tourism as evident from its 2016 Tourism Policy. Mumbai is the only metro in the world that has wildlife, seashore, mangroves and migratory birds. Major industries include chemical products, electrical and non-electrical machinery, textiles, petroleum and allied products. Maharashtra is the wealthiest and one of the most developed state in India, contributing 25% of the country's industrial output and 23.2% of its GDP. The 2016 Budget provided support to the tourism industry when tourism got 70% rise in budget to focus on infrastructure development and promotion and publicity initiatives.


Growing significance of technology in tourism industry is visible.  Despite government going all out to promote India becoming a digital economy, the country and the state lack proper infrastructure that can usher an efficient digital economy.


Maharashtra’s Tourism Policy


Most visionary states including Maharashtra, Rajasthan, Gujarat, Madhya Pradesh, Telangana and Kerala have become aggressive in promoting tourism. This has led to competition among states. Maharashtra has formulated a well formulated ‘The Tourism Policy of Maharashtra -2016’.


Highlights of the 2016 Policy:


  1. Designate Tourism as a priority sector to usher in economic development and generate high employment opportunities in Maharashtra.

  2. Create 1 mn additional jobs in the tourism sector by 2025

  3. Achieve tourism sector growth of 10% per annum and share of 15% in GSDP through tourism and tourism related activities.

  4. Generate fresh investments in the tourism sector to the tune of INR 30,000 crore by 2025.

  5. Incentivize tourism units in the state by linking it to the Package Scheme of Incentives, 2013 of Industries, Energy and Labour Department or any modifications thereafter. Incentives under this policy are designed as per the needs of the tourism sector in the state.

  6. Key strategic interventions are identified and special incentives for respective intervention have been laid out.

  7. Importantly, strengthening of tourism infrastructure especially in the form of PPP model, special tourism infrastructure Tourism Infrastructure development fund, CSR, etc. are defined in this policy.

  8. Adequate attention paid to Implementation Plan and Institutional& Governance Mechanism. 


Maharashtra’s Tourism Strategy


  • For achieving sartorial growth of 10% p.a. and share of 15% in GSDP


Encouraging Mega Project investments especially in less developed tourism zones with high potential

  1. Monetization of existing land bank with MTDC

  2. Improving tourism infrastructure throughout the state by various concerned departments;

  3. Investor facilitation and ease of doing business.


  • For creating 1 million additional jobs in the tourism sector


1. Increased focus on Mega and MSME tourism units.

2. Offer additional incentives to employment-intensive Mega units.

3. Leverage state and central skill development schemes.

4. Consider Agro & Rural, Adventure sports, events based tourism activities etc. as a thrust sector.

5. Promotion of tourism as an attractive sector for employment.


  • Institutional & Governance Mechanism


A three-tier institutional & Governance mechanism will be created through-

1. High Powered committee under the Chief Secretary for approval of the Mega Projects and for status review of the tourism strategy

2. A steering committee under the chairmanship of the Principal Secretary (Tourism) for the implementation of the Maharashtra tourism policy – 2016 and facilitating investments in the state. The Principal Secretary (Tourism) will also supervise the single window clearance for the Hospitality industry and live events in Maharashtra and Events and Exhibitions Board will be created to facilitate events and promote MICE in the state.

3. A District Tourism Promotion Committee (DTPC) to be formed


  • Development of Special Tourism Districts/Zones


1. the districts of Nagpur, Aurangabad and Sindhudurg will be earmarked as special tourism districts.

2. In addition, the state will notify other special tourism zones/estates as when required.

3. These regions will be given additional incentives and incentive period.

4. In addition, special marketing assistance will be given to them to promote them as major tourism destinations of the state.


  • Development of Tourism growth corridors


1. Classify the state into separate tourist cities, tourist clusters and tourist corridors which will be promoted through identified themes.

2. Employ a pilot project along a major highway and on its successful returns, replicate the process along five major highways in the state.


  • Public Private Partnership Model for growth in Tourism Sector


The Department of Tourism, Government of Maharashtra will Identify and develop shelf of projects and undertake these projects through the PPP/JV mode.


  • Five step approach for marketing and promotion


1. Develop an integrated 360 degree marketing plan.

2. Participation in international road shows/ fairs/ G2B meetings etc.

3. Develop a world class website for Maharashtra tourism.

4. Develop brand equity of the state through theme based tourism.

5. Special incentives to media which promote Maharashtra tourism.


Maharashtra’s Infrastructure Tourism


Maharashtra Tourism’s new initiative — Maharashtra Unlimited — is an umbrella programme to boost tourism infrastructure. As part of the initiative, Mumbai-Lonavla-Pune circuit and Mumbai-Igatpuri-Nashik circuit will be developed as tourist stretches where tourism events will be promoted and roads and five-star hotels will be developed. A heritage policy on 450 forts in the state is also in the pipeline. The upkeep and development of the forts has been the focus of the tourism department since long. SambhajiRaje, descendant of Chhatrapati Shivaji Maharaj and social reformer RajarshiShahuChhatrapatiMaharaj of Kolhapur have been selected as the brand ambassador for the same. Plans are afoot to develop the government area around forts by introducing tourist amenities like tents and hotels. The state also plans to develop Konkan coast on the lines of amenities and tourist facilities as developed in other coastal regions like Goa and Kerala. Wellness centres in Lonavla and Igatpuri are in order. A boating competition in Mumbai on the lines of ‘Boat Grand Prix’ is planned.




 a) Beneficial economic benefits of tourism include --

  1.  Contribution to GDP

  2.  Generation of foreign exchange

  3.  Creation of new job and employment opportunities

  4.  Stimulation of trade, income and entrepreneurship – especially in the service and SME sectors

  5.  Building of new infrastructure for non-tourism use

  6.  Inclusive regional development – particularly in undeveloped isolated areas

  7.  Greater tax revenues resulting in more government spending or reduced taxes on other activities

  8. Multiplier effect of new money not only in Maharashtra but other states as well.


 b) Government has rightly identified Tourism as a pillar of growth. With improved road infrastructure, regional air connectivity and better budget accommodation, this sector is expected to get unlocked making India’s share of the global tourism market to improve.


 c) One of the major concerns is increase in tax disparity in independent travel purchase viz-a-viz holiday packages; for example, the consumer has to pay the tax on flight tickets, but combined with a holiday package, they will also have to pay tax on the overall package as well, thus travel getting costlier for the consumer. 2017 budget should end such disparities and work towards a lenient tax structure to further promote tourism.


 d) Infrastructure development is a pre-requisite for providing the much-needed impetus for the industry’s growth. Additional incentives should be provided for infrastructure investments in the travel and tourism sector. A lower tax rate for hospitality business and the lower rate of interest for real-estate development can ensure opening up of nascent branded budget hospitality sector.


 e) Today, the tourism sector offers far more diversified services than ever before. It has become imperative to incorporate all such services in the mainstream industry.


 f) Indian tourism in comparison to well-known tourism centers of the world suffers from poor governance of facilities, which are not only inefficient, but also unreliable and least cost effective.


g) Lessons from other states’ or foreign tourism

  • Indonesia is eying potentialities that can be tapped from India and south Asian markets to further boost its tourism sector. India is currently among the top 10 countries that contribute maximum visitors to Indonesia.

  • Spanish tourism industry is attracted by the ‘Boat Race’ theme. The fascinating boat race, a signature event of Kerala, has become a stellar attraction. This will require a world class infrastructure and allied facilities.

  • As regards Nigeria’s place on the world map, there seems to prevail near obscurity about its tourism potential. There is poor advertising of the country’s image. The reality is that Nigeria has number of places and experiences, but it lacks the infrastructure for it, especially economically viable infrastructure, power, road and security. The initiative has to come from the government. It can’t be privately driven.

  • China’s tourism is much ahead of India’s. China’s growth rate in the business travels sector is the highest in the world, ahead of the USA. Main reason is Indian tourism not matching world class infrastructure development. While roads have become better and many online travel portals have emerged, what is missing is the required solid monumental blue print of infrastructure to take India’s tourism to a new high. New quality hotels are inadequate which has added to the demand thereby making the travel in India far costlier. In comparison, Beijing contains as many star-category hotel rooms as all of India. There are many other reasons like market size; many foreign visitors coming to India preferring cultural and natural destinations to cities while in China and many other countries, cities are major draws; high taxation & service charges in independent travel purchase is a major flaw in Indian travel eco-system and no comparison in terms of quality of transportation infrastructure in China. China's transport --air, rail, and road networks—is faster, safer, and more modern. With respect to safety and security, India has witnessed numerous instances of pickpockets, burglary, sexual assaults and scams vis-à-vis foreign tourists

  • Israel is well known for its eye catching tourism. Some noteworthy facts about Israel’s tourism are—

    • Government’s significant investment in targeted marketing initiatives and outreach to “new markets.”

    • International airline incentives

    • Record-high marketing budget

    • New routes like Hainan Airlines, China’s largest private airline, opened a new route into Israel last year.

    • Israeli Ministry of Tourism's 2016 video advertising campaign in India.

    • Fastest-growing tourism feeder countries- China (up 69 %); Croatia (62 %); Belarus, Latvia and Georgia (each 41%); Malaysia (35 %); and the Philippines (27 %).

    • Though Eilat, an increasingly popular destination-- Ben Gurion Airport- is Israel’s largest airport, but Ovda Airport near the southern resort city of Eilat now receives incoming flights from nine European cities. Israel is offering a subsidy of 45 euros ($48) to all passengers flying into Ovda during the current winter season.

    • Most travelers are not part of tour groups. About 60% of travelers to Israel now come independently, a statistic identified as a significant change in Israel’s tourism landscape.

    • Ministry of Tourism hosts journalists.


  h) A mammoth media campaign to generate awareness regarding various experiences tourists can enjoy in Maharashtra can be launched.  An aggressive campaign to promote tourism infrastructure in Maharashtra can go a long way to promote state as a versatile holiday destination with something to offer to everyone. With cooperation from professional bodies like Tour Operators, various unexplored destinations in Maharashtra could be promoted


 i) Nearly half of a billion Indian students are pursuing courses abroad. Authorities too can explore foreign students’ study potential in the state.


 j) With a mature tourism industry, the vision to make an attractive destination for investment will get a boost.


k) India showcasing its growth story at WEF annual meet also creates interest of foreigners to visit India.


l) Tourism collaboration between India and strategic countries can be made integral to its FTAs and CEPAs. This in many cases can benefit Maharashtra. For ex. India and UAE have agreed to boost maritime transport so as to increase the people and people contact and increase tourism, especially cruise tourism. India is also looking at visa exemptions for official and special passport holders, which can benefit Maharashtra. Chambers of Commerce and Business Associations can be roped in this exercise.


m) Tourism related critical statistics state- wise need to be made up-to-date and reliable in place of current scattered and divergent statistics scenario


n) PM Modi is unhappy with lack of coordination between govt departments. Various arms of the central government and state government ought to function in cohesion under a broad vision. Reality is that its departments prefer to settle disputes in courts and work in silos.


o) PM’s advice is that each state should pick a few destinations and create world class tourism infrastructure and draw the world there. India should focus on two types of tourism-- traditional and foreign. He also lamented that despite having a large number of places significant from the point of view of promoting religious tourism, there was a lack of skill development courses for guides operating there. He has underscored the need for "special branding" of India's rich cultural heritage.


p) Maharashtra can consider creating a World-Class Museum; a World-Class Film Institute; a World-Class Yoga Institute (like the The Shaolin Temple’s Kung Fu school famous for its iconic imagery of thousands of students practicing in unison. Millions of tourists travel to China just to witness such scenes. India’s yoga institutes must do the same, for yoga), a beautiful, World-Class Modern Cultural Monument and a Global Skill Centre for promoting tourism expertise.


In Sum


India receives only 0.7% of the world’s tourists and 1.45% of the world’s tourism revenues. The current 11% tourism growth rate is mediocre and unambitious; it does not do justice to India’s immense unrealized potential. Maharashtra can take the lead to contribute to transforming India into a highly competitive and attractive tourism destination.


How best to tap Maharashtra’s phenomenal tourism potential for nation-building needs to be constantly researched?


Investment in tourism infrastructure- both soft-- mainly governance, skills, safety cleanliness—and physical are needed. This along with effective policy formulation and its time bound implementation can unleash realization of the tremendous growth potential of Maharashtra.



Pictures on Tourism in Maharashtra


Famous Chhatrapati Shivaji Terminus formerly known as Victoria Terminus-- A fine specimen of British architecture, CST takes you back to the colonial era and at the same time gives you the true pulse of modern day Mumbai. 


Thosegar waterfalls, Maharashtra

The Thosegar falls are one of the hidden gems of Maharashtra. Located near a quaint village named Thoseghar, these falls are just 20 km from Satara and a great picnic spot from Mumbai and Pune. Believed to be the tallest waterfall in India (500 m), Thosegar falls must also be visited on account of the surrounding countryside with lush greenery and dense dark woods.


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