The pandemic induced by the Chinese virus
has taken a toll on the economies across the world without exception.
Industries are affected in terms of their productivity one due to lockdowns and
thus restriction on production as also on demand and secondly due to the
employees testing positive for the Chinese virus thus absenting themselves from
work and perhaps affecting the co-workers in the process becoming
superspreaders. The economies have witnessed recession across board and it is
only now that some economies are turning the corner. It is however very early
days to be optimistic of a full recovery in the current financial year. India
was on the verge of a turnaround before the second wave hit in full fury
resulting in lockdowns across states. Though the lockdowns varied in intensity
and perhaps was not as strict as it was in the first lockdown, the impact on productivity
would have to be gauged as the data comes in for the first quarter of the
financial year 2021-22. Rather than production being restricted, it was the
employees who were testing positive and the sheer number of positives and the
resultant deaths that would have impacted more the productive side of the
economy.
Among the sectors that has been
affected through the last year and half has been without doubt tourism. The sector
is one which is a high contact sector and naturally would be impacted. Furthermore,
there was high degree of probability of being a superspreader industry thus the
impact being even more pronounced. Yet, there were times when people did visit
tourist places mainly to unburden themselves of the tensions the waves create. During
the winter there was an increased rush into different tourist places ranging
from Jammu and Kashmir to Himachal Pradesh to Goa to many other places. It is believed
that the upturn in the COVID-19 cases in HP during November and December was primarily
due to people from Delhi visiting these places and thus spreading the disease
there. The second wave in Goa could largely be attributed to the influx of tourists
to the state. One has to view the cases in Kerala too through the prism of
tourist inflow in part. As the second wave is receding, the tourist inflows are
increasing. The dangers of some turning into superspreader events are very
high. There were videos from Maharashtra showing the tourists in full flow in
trekking some of the forts of the Maratha era in the Western Ghats closer to
Mumbai and Pune. There is every chance of Delhi tourists flocking Uttarakhand
or Himachal or even Kashmir creating a potential waves there.
Yet while one exasperates on the
people behavior which might be the cause of the future wave, the tourism industry
too has to survive. The spillovers of the industry are significant and has been
affected resulting in a loss of significant quantum of jobs in the sector both
directly and indirectly. The industry does not seem to see any respite until
the vaccinations reach a critical mass. The Western countries are slowly
opening up for travel though the disruption from the next wave continues to
remain highly probabilistic. Yet the data from UK and Israel seem to suggest
vaccinations are working the next wave would perhaps be diminished if the
vaccination process speeds up.
In this context, the Central
Government has announced certain incentives for the tourism sector. The incentives
could have been oriented either towards supply or demand or a combination of
both. The current incentives seem to be demand oriented. While there are
measures like concession loans for both tourist agencies and guides,
apparently, the supply side incentives are being left in good measure to be
offered by the States. The centre has now announced that the first 500000
visitors to India post resumption of international travel would not be charged
the fees for visa. The visa fees is now essentially zero for the scheme that is
likely to run till March 31 2022. This definitely an incentive for visitors
from abroad to come to India. It remains to be seen how the response would
emerge. It depends on the visa fees that foreigner pays when they visit India
for tourism purpose. This is unlikely to impact the business visitors. The business
side of hospitality had to transform itself into offering quarantine services
thus a semblance of revenue flow continued to exist. This was not something
that was possible for the vacation tourism industry. Therefore, they needed
some sops which seem to have been announced now. Prima facie, the announcement is
welcome though it is a postdated cheque if one might call it so. Yet it could
instill a certain morale in the tourism sector across vacation spots.
The conditions would be many in the
sense the extraneous factors would come into play. The opening up of
international travel sector would be contingent on the controlling the corona
problem in India. This would have to be preceded by a sort of existence of
normalcy in the countries abroad. In other words, both countries the
originating and the destination have to be corona free relatively speaking at
least for the travel to resume. They must be countries which do see lot of
outward travel towards India. There must exist a willingness to travel abroad for
tourism. This is contingent on the incomes in those countries. Given the fact,
many have lost jobs or have their incomes reduced, it would be moot to view how
many would prefer to visit. At the same time, there does exist a situation
where people would prefer to chill out given the trauma they would have
undergone over the last year and half. Thus there would be an audience which
would be willing and perhaps has the ability to afford the trip to India.
The tourism incentives are
essentially contingent on the swiftness with which the world is likely to come
out of the pandemic. The longer the pandemic sustains, the international travel
is unlikely to open up in significant measure. In this context, the tourist
inflows might be less relative to expectations. The concessional rate at which
loans are being offered would make sense only if there is an expectation of
upturn in business in the short run. This is subject to the Indian control of
the pandemic. The incentives are good. The tourism when it resumes will take
off significantly. Yet this incentive has been offered in the times of uncertainty
which would perhaps be a dampener. The intention is good, the effect will be
positive yet subject to the all-round uncertainty associated with the pandemic.
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