RIJBFA Volume 1, Issue 4(April 2012) ISSN: X. Research Consortium RIJBFA RADIX INTERNATIONAL JOURNAL OF BANKING, FINANCE AND ACCOUNTING

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1 A Journal of Radix International Educational and Research Consortium RIJBFA RADIX INTERNATIONAL JOURNAL OF BANKING, FINANCE AND ACCOUNTING OPPORTUNITIES AND CHALLENGES FOR FDI IN TOURISM IN INDIA: POLICY IMPLICAIONS OF KARNATAKA Dr. H.RAMAKRISHNA M.Com, M.Phil., Ph.D Associate Professor and Co-Ordinator Department of Post-Graduate Studies in Commerce Smt. Saraladevi Sathishchandra Agarwal Government First Grade College BELLARLY Karnataka ABSTRACT Due to more advantages including increase in Foreign Exchange Earnings, the Tourism sector has its importance in the present context. Above all, tourism helps to improve diplomatic relationships between the two nations. Travel and Tourism sector requires huge capital for infrastructural development. Thus, there is a competition between the developing nations including India to invite Foreign Direct Investment (FDI for tourism sector. The Government of India has made policies on tourism from time to time. At the same time. The States governments have been given the responsibility of making Tourism Policy by emphasizing the roles of private sectors for tourism development. In the same way, the Government of Karnataka has introduced New Tourism Policy 2009-

2 14 with a strategic objective of attracting more tourists and to create opportunities for private participation. Attracting FDI to tourism is not easy as in case of other services sectors. Because, its income depends upon how best the services and hospitality extended to the domestic or foreign tourists. Opportunities and challenges in inviting FDI to tourism sector in case of India have been analyzed in detail in this paper. The paper also focused on the initiation made by the state of Karnataka in this direction. KEY WORDS: Karnataka, Tourism, Policy, FDI, Opportunities Introduction India s travel and tourism industry is one of them most profitable industries in the country by contributing a substantial amount of foreign exchange. This is illustrated by the fact that during 2009, 5168 million tourists visited India and spent US $11,136 million. Several reasons are cited for the growth and prosperity of India s travel and tourism industry. Economic growth has added millions annually to the ranks of India s middle class, a group that is driving domestic tourism growth. Disposable income in India has growing year by year and much of that is being spent on travel. The boosting of IT and outsourcing industry has resulted into growing number of business trips are made by foreigners to India, who will often add a weekend break or longer holiday to their trip. Foreign tourists spend more in India than almost any other country worldwide. The Tourism Ministry has also played an important role in the development of the industry, initiating advertising campaigns such as the 'Incredible India' campaign, which promoted India s culture and tourist attractions in a fresh and memorable way. The campaign helped to create a colorful image of India in the minds of consumers all over the world, and has directly led to an increase in the interest among tourists.

3 The tourism industry has helped growth in other sectors as diverse as horticulture, handicrafts, agriculture, construction and even poultry. Both directly and indirectly, increased tourism in India has created jobs in a variety of related sectors. Almost 20 million people are now working in the India s tourism industry. India s governmental bodies have also made a significant impact in tourism. The tourism industry of India is based on certain core nationalistic ideals and standards which are: Swaagat or welcome, Sahyog or cooperation, Soochanaa or information, Sanrachanaa or infrastructure, Suvidha or facilitation, Safaai or cleanliness and Surakshaa or security. Statement of the Problem Tourism industry is the back bone of most of the countries in the globe. The country s GDP is mainly consists of the services sector that to Travel and Tourism industry. For example, the countries like Mauritius, New Zealand, Singapore, Switzerland are in frontline in attracting tourists from nook and corner of the globe. The India s picture is also not exception from this concept. Most of the states in India depend upon the sources of income from tourism. The states like Goa, Kerala, Pondicherry, Andaman and Nikobar, Karnataka, Andhra Pradesh, Maharashtra, North-East States have world reputed tourism spots. Thus, the stakeholders in these states are naturally depending upon the tourism. But, the dimension and direction of the tourism industry is depending upon the policy of the Central as well as State Government. Tourism sector includes travel, leisure and hotel industry and accommodation. These sectors are integrated and inter dependent. Thus, the negative effect on travel, accommodation, hotel industry will be directly reflecting on entire tourism industry. Therefore, the segments like accommodation, travelling, tour operation, development of tourism spots on par with international standards, establishment of Amusement parks, Theme parks, Disney land, Artificial island requires huge capital. Hence, capital from private

4 sector is inevitable for this sector. The role of FDI in the development of tourism is not forgettable. The FDI changes the shape of tourism sector of a country. Thus, the opportunities and challenges for FDI in tourism in India have been evaluated in this paper. And the efforts of Government of Karnataka to make tourism spots more attractive have been analyzed in this paper. Review of Literature An abundant work on FDI and Tourism has been completed across the globe. The relevant works are being analyzed to find the gap for further study. Lall Sanjay (1974 focused on pro and anti features of foreign investment. Apart from listing advantages of foreign capital, the study points some disadvantages of foreign capital like, introduction of unsuitable products or technology, misuse of transfer pricing, unfair marketing practices, hidden profits, etc Markusen, James and others (2000 have investigated the impact of FDI in services on host country firms. The study proved that liberalization of policies and its impact on income and welfare of the country is positively correlated. World Bank s Policy Research Working Paper (2000 has suggested strategic actions for developing economies to improve the climate for FDI. Tripathi (2001 has analyzed the incentives for private sector in the tourism industry in India, economic benefits of tourism, tourism infrastructure and policy directions. Morisset and Lumenga (2002 have examined cross-country variations in administrative costs faced by investors by studying 32 developing countries. The study came out with a positive relationship between corruption, quality governance, trade and finance reforms and high inflow of FDI. The Research Working Paper of Asian Development Bank (2004 highlights the importance of opening service sectors of China to foreigners. Study also noted the need of introducing the policies to induce the services sector to be economically more efficient. Kumar (2005 in his study,

5 traced the reasons for increasing the investment by knowledge based MNCs in software sector of India. Study concluded that locational advantages is one among which attracts knowledge based industries. Whereas in the study of Dullian (2005, the reasons for shifting of FDI in China from market-seeking to efficiency-seeking have been traced out. Subbarao (2008 has traced the reasons for low FDI in Indian Tourism. He has pointed out that the multitude of taxes, high tax rates, services tax on tour operators are the major hurdles for low flow of FDI to tourism sector. Report of XOLA Adventure Industry Consultants (2008 has investigated on tourism financial flows. The report has studied the land-locked countries, LDCs island economies and the countries welcoming mass tourism (example, Bhutan, the Dominican Republic, Kenya, Morocco, Sri Lanka, Tunisia, and the United Republic of Tanzania. The important conclusion of the report is a significant parts of tourism development upon the cross-culture activities the provision of goods and services such as accommodation, transport, entertainment, construction etc. It has found in the report that localization decisions for FDI flows depends on the extent of tourism demand for a specific destination as well as its specific tourism-related assets such as nature, culture etc. D Silva (2008 has analyzed the perception of tourists towards India as a preferred tourists destination by taking 340 respondents from various tourism places in India like Gate Way of India in Mumbai, Taj Mahal in Agra, Baga Beach in Goa and Jaiselmer in Rajasthan. The study has suggested focusing on building and maintaining strong tourist relationship and training for tour guides who are directly dealing with the tourists. Selvanthan et al (2009 have investigated the causal link between FDI and Tourism in India by employing the Granger Causality Test under a VAR framework. The study has found a one-way causality link for FDI to Tourism in India. At the end, the study has given a novel conclusion that appropriate policy to explore tourism resources and plans to develop new tourist venues and facilities may need to be considered to meet the increasing demand of tourism in India. Ansari et al (2010

6 have studied the India s FDI, its status and issues in detail. In the study it has been observed that though India is in front line in attracting FDI in services but failed to evolve a manufacturing hub which has greater economic benefit. The study has also observed the diversion of substantial FDI to the M & As rather than Greenfield investment. Satya (2010 has observed the tourism related corporate taxes. In the study, it has been suggested to rationalize the taxation system, need of single luxury tax across the country, tax holidays for newly entered entrepreneurs for attracting more FDI to tourism sector. Sirari (2011 has analyzed the significance of the FDI inflows in Indian services sector (including tourism since 1991 and relating the growth of services sector. FDI in generation of employment in terms of skilled and unskilled. At the end, he has concluded that FDI has helped to raise the output, productivity and employment in some sectors especially in services sectors. The services sector is generating the proper employment opportunities for skilled workers with high perks. Ivanovic et al (2011 have investigated the influence of FDI on Tourism in Croatia. Further, they have investigated the contribution of FDI on economic growth, how does it reflect on tourism in Croatia. In the study it has found that most of the FDI in Croatia mainly directed to M & As of existing companies. Only a small part of investment is diverted to Greenfield investment. Dhingra (2011 has identified the determinants of FDI flows to India by making use of the Exploratory Factor Analysis Technique. The results of the study including the core factors influencing the FDI inflows to Indian states are-financial strength of the state, development level of the state, size of the market and the level of infrastructure. The development of the state in manifested in the Human Development Index (HDI, high literacy rate, high per capita income, freedom from corruption determine the dimension and direction of FDI.

7 Objectives of the Study After analyzing the research work already completed in this regard, the following objectives have been set by keeping the scope of the subject in to account. To know the Tourism industry at global, national and state level. To analyze the FDI in Tourism in India. To know the challenges and opportunities for FDI in Tourism in India. To know the efforts of Government of Karnataka in making Tourism sector as an investment oriented sector. To offer suggestions to improve FDI to Tourism in India in general and the state of Karnataka in particular. Methodology The entire research article based on the secondary data. The statistical data with regard to World Tourism has been obtained from the United Nation s World Tourism Organization (UN-WTO, United Nation s Conference on Trade and Development (UNCTAD, World Travel and Tourism Competency Report, Tourism Policy of Government of India, Government of Karnataka, Tourism Reports of Ministry of Tourism of Government of India and Government of Karnataka have been used in the study. Tourism Value Chain Many developing countries including India are looking to tourism as a potentially promising avenue for economic and human development. Traditionally, tourism was placed below manufacturing or agriculture because of its least contribution for economic growth. Now, the time to reappraise the traditional views of developing countries. Thus, Tourism sector considered as potential means of export earning

8 revenues, generating large number of jobs. The young people irrespective men or women showing more interest in tourism and travel related activities across the globe. Tourism sector helping to revive cultural activities in rural areas, pave the way for showcasing heritage spots available in the nation, promoting economic diversification and services sectors. Thus, the Tourism and Travel industry have their significance in the present context. Tourism destinations do not only aim to attract financial capital from domestic and abroad, but also human capital such as entrepreneurs, hospitality, hotels, lodges, resorts, tour and travelling agents, international franchises to market and develop local attractions. Tourism is not a single activity, rather it is a combination of many related activities including transport, accommodation, food and beverage services, cultural entertainment, conventions and fairs, sports and recreation. The box table no.1 explains the tourism value chain. In the saga of tourism revolution across the globe, the role of stakeholders of tourism such as hoteliers, lodges, resorts, travel and tourism operators and the policy of the Government plays a remarkable role in the development of tourism. An overview of Tourism Industry Let us focus on the dimension and direction of tourism at global, national and local level. A. Global Tourism International Tourists Arrivals (FTA s of the global picture shows that, totally 593 millions of FTA s cross their overseas to spend their leisure period. India s share in this was 2.37 million (0.40%. The FTA s during 2009 were 882 million and India s share in that was 5.17 million (0.59% i.e 41 st Rank.(Vide table 3&4 for further details If we

9 observe the Foreign Exchange Earnings from tourism sector, in 1997 it was $ billion and India s share was $ 2889 milloin(i.e 0.65% and this was increased to $851 billion (world, $11394 million (1.34%( vide table 04 for further details during Table-01International Tourist Arrivals and International Tourist Receipts in Asia and Pacific Region Source: UN-World Tourism Organization, Tourism Highlights-2011

10 From Table-01, it is confirm that in 2008 out of 917 million international tourist arrivals at the global level, 5.28 million FTAs arrive to India (0.57%. In 2009, the FTAs to India decreased to 5.16 million out of 882 million (0.58%. If we compared to FTAs to India there is a decrease of 2.2%. In 2010, this was increased to 5.58 out of 940 FTAs (0.59% which is increased at the rate 8.1% compared to If we consider Asia-Pacific Region, 5.281, 5.17and 5.59 billion FTA s arrived to India and spent $ 11.83, and billion respectively for the years B. A Glance on Indian Tourism Hotel and Tourism Industry have been growing drastically in recent the years. Most of the states of India depend mainly upon tourism for their livelihood. Moreover, the income generated from tourism and hotel industry is the back bone of Kerala, Karnataka, Goa and North-East States. Thus, tourism brings huge revenues in the form of foreign exchanges and helps to increase disposable income of the dependents. Tourism industry is one of the biggest industry which employs maximum number of manpower. According to the UN-World Tourism Organization 2011, India will be the leader in the tourism industry in South-Asia with 8.9 million arrivals by Due to proficiency in English language and the availability of cheap labour, India will be emerged as one of the hottest tourism destination in the World. The Government of India s tourism related promotional strategies like Incredible India, Athithi Devo Bhava are effectively working in this direction. According to the World Travel and Tourism Council (WTTC Report 2010, India is emerging as the second most rapidly increasing (8.8% tourism economy in the world over in According to the Economic Survey , Foreign Exchange Earning (FEE from the tourism

11 sector has been steadily increasing during the last few years despite infrastructure and connectivity problems (Das, Performance of tourism sector during February-2012 ( accessed on Foreign Tourist Arrivals (FTA during the month of February was 6.77 lakhs as compared to FTA s of 6.36 lakhs during February-2011 and 5.52 lakhs in February There has been a growth of 6.6% in February-2012 compared to a growth of 15.1% registered in February-2011 over February The FEEs during the month of February-2012 were Rs.8502 crores as compared to Rs.7653 crores in February-2011 and Rs.6646 crores in February The growth rate of FEE Rupee terms in February-2012 over February-2011 were 11.1% as compared to 15.2% in February-2011 over February Cumulatively, from April 2000 to January 2012, there was an inflow of US $ million. As usual, Mauritius is the top investor in India i.e., US $ million (39.47%, in case of industry-wise inflows, services sector has received US $ million (20%. Hotel and Tourism sector has received US $ 3229 million (2.02% up to January, The top 15 source countries for FTAs in India during are given in Table-02. Table-02 Top 15 Countries for FTAs in India during Rank in 2009 Country FTAs in India in 2009 % share in 2009 Rank in 2009 Country FTAs in India in 2010 % share in U.S.A U.S.A U.K U.K Bangladesh Bangladesh Sri Lanka Sri Lanka

12 5 Canada Canada France Germany Germany France Australia Malaysia Malaysia Australia Japan Japan China(Main Russian Fed. 12 Singapore China(Main Russian Fed Singapore Nepal Nepal Italy Rep.of Korea Total Top 15 Countries Total Top 15 Countries Others Others Grand Total Grand Total (Source: accessed on From Table-02, it can be observed that in 2009 the foreign nationals particularly from USA preference India for spending leisure time (16.01%, FTAs compared to 16.12% i.e FTAs in 2010, followed by UK (13.15%. Bangladesh (7.48%, Sri Lanka (4.61%, Canada (4.20%.

13 The major Tourism products in India 1. Medical Tourism: The medical tourism industry in India has been estimated to increase to around US$20 billion over the next couple of years. Medial tourism in India emerges as a huge money generator. India has been promoting its healthcare tourism by giving the tourists with personal healthcare services. It is projected by CAGR that the total marketplace for medical tourism will reach US $ 2 billion by 2012 of percent. 2. Spiritual Tourism: India is the homeland of spiritual destinations. Spiritual tours of India take one to quite a few spiritual destinations in the country which are famous for their religious and spiritual significance and the centers spread all over India. 3. Rural Tourism: As a historic civilization rich in arts, crafts and culture, rural India can come forward with significant tourist spots. The government has realized what rural India can offer to the world. The 10th plan has acknowledged tourism as one of the main sources for generating jobs and promoting sustainable livelihoods. Rural tourism can also reduce absolute dependence on agriculture. It has now revived traditional crafts, buildings, art etc. 4. Adventure Tourism: The continuous scale of adventure tourism in India is mainly because of its different geography and climate. On land and water, underwater and in the air, the tourist can enjoy whatever form of adventure in India they want. The hilly regions present many opportunities for mountaineering, rock climbing, trekking, skating, mountain biking and safaris, while the flowing rivers from these mountains are ideal for river rafting, canoeing and kayaking. 5. MICE Tourism: The latest type of business tourism is MICE Tourism MICE refers to Meetings, International Conferences and Conventions, Events and Exhibitions. The fastest growing part of the international tourism market. It caters to a variety of forms of trade and is gradually but progressively capturing the interests of every major hotel.

14 Being a hot favorite traveler target, India is also very much into the business. It is expected that the total world market for MICE tourism was in surplus of US $ 280 billion by Eco Tourism: Ecotourism has measured the highest growing market in the tourism industry, according to the World Tourism Organization, 2011 with a yearly growth rate of 5 percent worldwide and representing 6 percent of the world GDP and 11.4 percent of all consumers spending. Primarily, ecotourism means creating as small an environmental impact as possible and serving to maintain the original nature, so encouraging the conservation of wildlife and habitats when visiting a place. Initiations of the Government of Karnataka in the creation of investment environment for FDI: A Critical analysis Karnataka, the eighth largest State in India, has contributed significantly to India s tourism sector. Karnataka, with its varied agricultural and mineral resources and strong manufacturing capabilities accounts for close to 10% of India s product exports. The capital Bangalore is in fact known globally as the IT capital of India, the State s software exports from more than 35% of India s software exports. Karnataka is also known as the Knowledge Hub of the Nation it has the highest number of medical colleges and third highest number of engineering colleges in the country. The State is the pioneer in two cutting edge industries, aerospace and biotech, where it is the global face for India. (Advantage Karnataka, Global Investors Meet, Karnataka - A Leading Investment Destination (Policy Implications of Karnataka Government Karnataka s performance in attracting investments, both domestic and FDI, highlight the State s robust financial network. Karnataka, India s eighth largest economy,

15 accounts for around 5% of its national income. The State has been Ranked First by the World Bank for its investment climate in a study that has analyzed 16 States using 46 investment parameters. Due to the Excellent infrastructure, Readily available land in a land bank, Highly skilled technical manpower base, Large number of technical and research institutes, Technology savvy work force with proficiency in English, Cultural diversity and cosmopolitan urban centers, Advanced healthcare facilities, Connectivity through air, rail, sea and road network integrated with the rest of the world, A State with effective law and order, Liberalized economy with single window clearance for investors, Excellent logistics support of the state is possible to keep Karnataka in an investment map of India. Home to 700 MNCs and 87 Fortune 500 companies, Karnataka is a State that is already well known on the global investment space. With more than 5300 patents filed from centers in this city, Bangalore now forms the fourth largest technology cluster in the world. In terms of FDI inflows, Bangalore centre which accounts for FDI investment in Karnataka. Karnataka has Ranks-3 in the country after Mumbai, India s financial capital and Delhi, the national capital. Contributing to 6% of the total FDI flows to India over the period April 2000 till December 2011 (vide table: 06. Bangalore has brought in $ 9445 million, an amount higher than the Ahmadabad, Chennai and Hyderabad Centers. From January 2006 till January 2010, a total of 927 investment proposals were approved in the State amounting to more than Rs. 4.5 billion this comprises 9.1% of the total investment proposed in the country during this period. The Government of Karnataka expects 5.26 lakhs of FTAs and an employment generation of 9.32 lakhs and lakhs domestic tourists arrivals and tourism contribution to state GDP at 25% by 2020( vide table: 05.

16 Initiations of Government of Karnataka in inviting private capital to tourism sector 1. An Investor s Friendly Supportive Environment (Land Bank proposal: Government of Karnataka and the administrative Departments are making efforts to invite more FDI in Tourism to the State. For example, the Government has created Land Bank (Government land available for FDI Projects and investments. About 150 Government owned properties across the state have been announced in the Government website to take-up investment in tourism. The domestic or foreign investor can make use this land like the construction of lodges, hotels, resorts, amusement parks, amenity centers etc. 2. Karnataka Udyoga Mitra (KUM-An Investor Friendly Platform: The Karnataka Udyog Mitra was setup by the Government some years ago. KUM act as an agent between the Governemnt and the prospective investor. It will take the responsibility of guiding the investor, receiving the proposal from the investor, clearing administrative obstacles at all levels. KUM has an industrial relationship with all the Departments of the Government of Karnataka. 3. State Level Single Window Clearance Committee and High Level Clearance Committee: Both of these committees are working in favor of the investor. In case of State level Single Window Clearance Committee the projects worth up to Rs.50 crores will be cleared. The projects above Rs.50 crores will be cleared by High level Clearance Committee in a speedy manner. 4. Network: The Government of Karnataka has a good communication and understanding with the Nationalized Banks, co-operative banks, private banks, foreign banks operating in Karnataka in connection with lending of loans and advances to the prospective investors. 5. Promotional Methods: In order to invite the investors from nook and corner of the world, the Government of Karnataka has initiated certain promotional methods such

17 as Global Investors Meet (GIM, Agri Investors Meet (AIM, Steel Plant Owners Meet etc. for investment in the state by offering facilities and benefits. 6. Tie-Ups: The Karnataka Tourism Department has stepped in to tie-ups with land owners and investors to boost tourism in the state. Through this the Government is expecting more investment from the domestic players. 7. Government has also opened Heritage Tourism Spots for Investment purposes. Mr.Janardhan Reddy, the ex-minister for tourism and infrastructure development had given an announcement that, if the land owners are interested to handover the land to the government for infrastructural purposes. In turn, the land of land losers along highways/ring road will be converted to Non-Agricultural purposes with free of cost. 8. Opportunities for private investment in coastal belt: It has been identified the coastal belt from Mangalore to Karwar as an Investment Hub. It has been expected to develop 30 beaches along these costal belts under PPP. 9. Home Stays: On par with the Western countries, the Home Stays Programme has been initiated in the state to satisfy bed and breakfast for the tourists. The home stays policy of the Government allows the owners to earn an extra income apart from the regular income. 10.Tourism Zones: In order to improve the investment environment in tourism in the state, The Government has divided the entire state into four zones for extension of tax benefits. Zone-1: BBMP will be low priority zones with few tax benefits. Zone-2: In BMRDA limits-will have destination projects Zone-3: This is notified for ITDM with an integrated manner. This includes Mysore, Coorg, Hampi, Pattadakal-Badami-Aihole, Bijapur, Bidar and the Coastal belt from Ullal to Karwar. Zone-4: This is enjoys the range of tax benefits and incentives for a period of five years. This covers destinations other than above and wayside facilities on approved facilities.

18 Policy Recommendations 1. The taxation policy on hotel industry should be overhauled. Because the hotel industry is the major supporter for the tourism industry. 2. Service tax on accommodates should be rationally calculated based on the services provided by the hotelier (particularly in case of check-in and check-out timings in lodges and resorts. 3. Extension of tax holiday for newly constructed hotels and lodges will boost the industries. 4. The sky policy of the Government of India should be liberalized. 5. Tourism sector should be considered as an industry so that the benefits available for the industry should also be extended to tourism industries. Suggestions by the Reserve Bank of India Lock-in period for original investment, which means foreign investors cannot sell and walk out of the Indian company whenever they choose To monitor and check FDI violations Granting permission/license to run hotel under which construction of hotel should be completed within stimulated period Conclusion There are certain points which make India a hot destination for investment in tourism department. First is the positive attitude of the government. The government has allowed 100 percent FDI in this sector. Last year in the Indian union budget 2010, the Indian government has given more than INR1,000 crore to the Ministry of Tourism.

19 Second, the tax holidays are being given to the organizations who want to invest in this sector. All this makes India s tourism industry a great investment option According to the Indian Tourism ministry, the Indian tourism industry would be the third largest foreign exchange earner in the country in the next three year. Till the end of 2012, foreign tourists will grow at the fastest pace in comparison with the last decade and it is estimated that tourism in India could contribute US$1.8 billion to India s GDP. These statistics show the seriousness of the Indian government towards tourism. Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Karnataka and Rajasthan are the leading tourism destinations in India in terms of total tourist arrivals. A liberal policy on Tourism both by the State and Central government, creation of investor s friendly environment and least number of entry and exit norms will help to bring more private capital to the country in general and the state of Karnataka in particular. References 1. Asian Development Bank s Research Working Paper No. 50, April Bala Satya and Ganesh Narayan(2010, FDI in Indian Tourism: A recent trend. The impact of FDI on Indian economy, Excell Books, New Delhi. 3. Dr. Anjum Singh Sirari (2011, FDI in Indian Service Sector: A study of Post- Liberalization, International Economics Research, 2 (2, pp D Silva, Prof. Bernadette and Prof. Stephen D Silva (2008, Perception of Tourists towards India as a Preferred Tourist Destination-An Empirical Research, Service Quality & Satisfaction, IIM-K. 5. Jacques Morisset, Olivier Lumenga, Administrative barriers to foreign investment in developing countries, Policy Research Working Paper No. 2848, World Bank, Kapil Dev Tripathi (2001, Opportunities & Challenges for Tourism Investment in India, Economic & Social Council for Asia & Pacific (ESCAP, Tourism Review, No. 21, New York.

20 7. Markusen, James, Thomas Rutherford and David Tarr, Foreign Direct Investment in Services and the domestic market for enterprise, Policy Research Working Paper No. 2413, World Bank, 2000, Washington DC. 8. Mohd. Shamim Nasari, Mukesh Ranga (2010, India s FDI: Current Status, Issues & Policy Recommendations, UTMs Journal of Economics. Vol. 2, pp Nagesh Kumar, Liberalization, FDI flows and development: Indian Experiences in the 1990s, Economic and Political Weekly, Vol. XL, April 12, Neeraj Dhingra (2011, Determinants of FDI Inflows to India, European Journal of Social Sciences, Vol. 25, No. 1, pp Sandeep Das (2011, Indian Tourism Sector: A Growth Story, Vol. 55, Sept, pp Sanjay Lall, Less developed countries and private foreign investment, Economic & Political Weekly, Vol. IX, No. 31, Aug. 3, Saroja Selvanthan, Selvanthan E.A. & Brinda Viswanathan (2009, Causality Between FDI & Tourism: Empirical Evidence from India, Madras School of Economics, Working Paper, No.46/2009, pp Sebastian Dullien, FDI in China: Trends and macroeconomic challenges, UNCTADs China in Globalizing world, Geneva, Subbarao (2008, Conference Paper on Tourism in India-Challenges Ahead, IIM-K. 16. World Bank s Research Working Paper No. 2501, World Bank s Perception, Washington, XOLA Report (2008, Report on Recent Trends in Tourism Financial Services, Sao Paulo, Brazil. 18. Zoran Ivanovic, Sijana Baresa & Sinsia Bogdan (2011, Influence of FDI on Tourism in Croatia, UTMS Journal of Economics, 2 (1, pp

21 Source: UN-World Tourism Organization, 2011 Table: 03

22 Share of India in International Tourist Arrivals in World, and Asia and the Pacific Region, Percentage (% of Percentage (% of International Tourist share and Rank of FTAs in share and Rank of Arrivals (in millions India in Asia & Year India (in India in World Pacific millions Asia and World % Share Rank % Share Rank the Pacific th th th th st th th th st th th th rd th th th st th st th st th th th (Provisional Source: Government of India, India Tourism Statistics at Glance -2010, Table-13, p.14, Incredible India

23 Table: 04 Share of India in International Tourist Receipts in World, and Asia and the Pacific Region, Percentage (% of International Tourist Percentage (% of FTAs in share and Rank of Receipts (in US $ share and Rank of India (in India in Asia & Year billions India in World US $ Pacific World Asia and the Pacific millions % Share Rank % Share Rank th th th th th th th th th th th th nd th nd th nd th nd th nd th th th (Provisional Source: Government of India, India Tourism Statistics at Glance -2010, Table-14, p.15, Incredible India

24 Table-05 Government of Karnataka s Projections on Tourism of the State Measures and indicators /projections Arrival of foreign tourists (in lakhs Employment generation by tourism(in lakhs Arrival of domestic tourists (in lakhs Revenue due to tourism (in Rs.lakhs Forex due to tourism (in Rs.lakhs Tourism contribution to state GDP (% Adopted from the Government of Karnataka, Global Investors Meet 2010, Sector profile Tourism: p.9 Source: Govt. of India, Department of Tourism, Market Research Division, Final Report on 20 year Perspective Plan for Development of Sustainable Tourism in Karnataka March 2003 Prepared by Dalal Mott MacDonald

25 TABLE: 06 / FACT SHEET ON FOREIGN DIRECT INVESTMENT(From APRIL 2000 to DECEMBER 2011 Amount INR in crores (US$ in millions Percentag Cumulative e to S. No. RBIs - Regional Office State Covered 10 (Apr- 11 (Apr- 12 (Apr- Inflows (Apr 00- total Inflows Mar Mar Dec Dec 11 (in terms of US$ 1 MUMBAI MAHARASHTRA, DADRA & NAGAR HAVELI, DAMAN & DIU 39,40 9 (8,249 27,66 9 (6,097 37,85 7 (8, ,328 (53, ,19 12,18 29,01 142, NEW DELHI DELHI, PART OF UP AND HARYANA 7 (9,695 4 (2,677 7 (6,321 (31,409 4,852 6,133 5,656 42, BANGALORE KARNATAKA (1,029 (1,332 (1,216 (9,445 4 AHMEDABAD GUJARAT 3,876 (807 3,294 (724 3,741 (806 35,434 (7, ,653 6,115 5,006 35, CHENNAI TAMIL NADU, PONDICHERRY (774 (1,352 (1,085 (7,936 5,710 5,753 3,434 29, HYDERABAD ANDHRA PRADESH (1,203 (1,262 (728 (6,689 WEST BENGAL, SIKKIM, ,723 8, KOLKATA ANDAMAN & NICOBAR (115 (95 (375 (1,863 ISLANDS 8 CHANDIGARH CHANDIGARH, PUNJAB, HARYANA, HIMACHAL P 1,038 (224 1,892 ( (42 4,879 (1,066 1

26 9 BHOPAL MADHYA PRADESH, CHATTISGARH 255 (54 2,093 ( (114 3,537 ( PANAJI GOA 808 (169 1,376 ( (26 3,445 ( KOCHI KERALA, LAKSHADWEEP 606 ( (37 1,708 (358 3,366 ( JAIPUR RAJASTHAN 149 ( (51 74 (16 2,524 ( KANPUR UTTAR PRADESH, UTTRANCHAL 227 ( ( (133 1,413 ( BHUBANESHW AR ORISSA 702 ( ( (27 1,329 ( ASSAM, ARUNACHAL GUWAHATI PRADESH, MANIPUR, MEGHALAYA, MIZORAM, (11 (8 (1 (73 NAGALAND, TRIPURA 16 PATNA BIHAR, JHARKHAND - 25 (5 33 (6 60 ( ,05 20,54 22,20 157, REGION NOT INDICATED 6 (3,148 3 (4,491 3 (4,738 (34, ,1 88,52 112,0 712, SUB. TOTAL 20 (25,83 0 (19,42 19 (24,18 (157, RBI S-NRI SCHEMES (from 2000 to ( ,1 88,52 112,0 713,079 - GRAND TOTAL 20 (25,83 0 (19,42 19 (24,18 (158, Source: (accessed on