PREAMBLE

Considering that the signs of economic recovery in the principal source markets, both in the west and in the east, as also the return to political and economic stability within india, raise hopes of a favourable turnaround in tourism trends.

Considering that tourism remains the fastest growing industry that can promise prosperity in the new millennium through a manifold increase in the generation of millions of jobs, tax revenues and creation of assets.

Considering that socio-demographic factors, changes in consumer behavior, incredible technological advancement, concern for sustainable development and excellence in service through human resource development will offer the biggest challenges in attaining tourism vision 2000 and beyond.

Considering that tour operators and other private sector segments of the hospitality industry will have to play the key role in partnership with the government to attain the goal and Considering that the private sector suffers from a host of handicaps in securing india's due place in the global tourism map as a favorite destination.

RECOMMENDATIONS

The 15th annual convention of the indian association of tour operators meeting in jaipur 4-7 december proposes to the government as well as to segments of the travel industry, the following immediate and long term steps imperative for the growth of the industry.

NATIONAL TOURISM BOARD

Ever since the national tourism committee recommended nine years ago restructuring of the tourism administration, we have been asking for the creation of national tourism board, including re-presentatives of industry to ensure co-ordinated action at the national level, enunciate plans, oversee their implementation as well as to function as an effective instrument in sorting out problems of the industry with other government agencies and ministries. The time has come for a change particularly with a dynamic and committed tourism minister sadhvi ms. Uma bharti ji for her unequivocal support to the cause of tourism and expressions of sympathy for our grievances. We appeal to her to ensure that tourism is treated as a thrust are for development and all impediments are removed. For these impediments hinder the industry's progress and tourism's growth.

TAX REFORMS : END DISCRIMINATION

The biggest impediment has been the tax structure on tourism, both at the central and state level so much so we have the dubious distinction having the heaviest taxation on tourists at-least in two cities in mumbai and delhi.

The tour operators themselves are haunted by the specter of service tax, a levy that will kill the trade. The tax on tour operators has been suspended until 31 march 2000 and we seek the intervention of the minister to see that this black levy does not surface again.

Besides, the tour operators who earn foreign exchange like any exporters suffer from gross discrimination. While exporters are allowed 100 per cent deduction on their turnover under 80 hhc of the income tax act, the tourism sector with far less outgo of earnings has to be treated at par with exporters. Tourism industry Must be allowed all the benefits available to exporters & software engineers. In support of this under the revised exim policy, a new chapter has been added for export of services which include tourism industry also. The same envisage certain benefits such as 10 years tax holiday, duty free import, import of restricted items etc. Iato urges that income tax should be amended in line with revised exim policy to enable service providers to avail the tax benefit.

Income from foreign travel groups received as short term advance again attract a discriminatory provision. This money deposited in banks is treated as a fixed deposit while it is purely a business income. This is a discriminatory disincentive.

The differing rates of road taxes and collection systems hurt free inter-state movement. The highly varying rates of luxury tax, which ranges from 5 per cent in u.p. to 20 per cent in tamil nadu are an anomaly that needs to be replaced by a rationalized tax structure. Experience shows tourism earnings go up where tax incidence is low. The conventions urges the minister to take such initiatives as are necessary to remove these contradictions. Iato is always ready for discussions.

CHANGE AVIATION POLICY TO OPEN SKY POLICY

The convention regrets that despite repeated demands by the industry, the archaic civil aviation policy continues harming the interests of tourism. The convention re-iterated that radical changes are called for in the civil aviation policy, should substantially increase the international air seat capacity expeditious settlement of bilateral air agreements and re-enforce airport infrastructure.

Besides, airports which have been started with private initiative and Have state-of the art facilities should be allowed to receive more direct flights. A case in point is the kochi airport which if allowed to receive flights by other international carriers will boost tourism in the south. The demand of global air carriers, which are unable to bring more tourists because of capacity constraints, needs to be favourably examined.

Jaipur to be recognised as an international airport and scheduled international flights be allowed to operate all over the world form there. Other state capitals wherever the state governments want international airport with permission for scheduled international flights be allowed.

EXPORT STATUS

The iato convention is thankful to the government for complying with the longtime request of iato and sister organizations for export status for the tourism industry. But we cannot conceal our disappointment that smaller tour operators do not benefit rather they are at a competition disadvantage. This should be redressed.

ACTION PLAN

The convention proposes an action plan which will only facilitate implementation of the explore india millennium year programme now extended to 31 december 2000 and pledges iato's total co-operation to the minister's initiative.
(a) extend exemption benefits under 80 hhc of the income tax act to tour operators as the first recipients of foreign exchange earnings.
(b) enunciate comprehensive national tourism policy after consulting representatives of the tourism industry. The marketing strategies will have to be changed from general marketing to micro marketing and the consultation process is necessary here as well.
(c) create management crisis fund as established in sri lanka.
(d) to ensure three way coordination among the centre, states and tour operators.
(e) rationalise the tax structure.
(f) establish an effective and permanent pr mechanism at the ministry and professionalise the marketing set-up.
(g) free inter-state movement of tourist transports.
(h) introduce training programme of professionals in tourism with the support of the government and private sector.
(i) implement without delay the open sky policy
(j) visas should be made available to genuine tourists for specific periods on arrivals. If the government has reservations about a general order in this regard, it can experimentally issue visa on arrival for nationals coming from certain source markets.
(k) revive the scheme for assistance for development of international tourism for small tour operators for participation in overseas fairs and other promotional efforts.
(l) prior information to the industry in matters relating to tourism, be it revision of taxes, change in fares or revision of air schedules.
(m) taj mahal to be kept opened during full moonlight days and to be kept opened for half a day in the afternoon on monday.
(n) a joint convention centre of all the trade organisations be made for which land be provided by the government in or around delhi.

UNITY IN INDUSTRY

The convention also notes that the industry should build its own strength so that its voice is heard. With this objective in view, iato has been trying to formulate shared perception on common problem. While every segment of the industry has its separate interests, it is necessary to face common problems jointly. Iato succeeded in persuading others to prepare a pre-budget memorandum last year. The same exercise should be repeated this year. Also together we should pursue the demand for an open sky policy. Such initial measures would help the process of evolving a confederated approach and unity in the industry.

SOCIAL OBLIGATION

The convention undertakes to fulfill social obligations as corporate citizens. Tour operators have a good record in this count. Organisation of blood camps and raising of funds for families of kargil heroes featured our programme. Iato also promptly responded to the minister's suggestion for relief of cyclone victims in orissa. We have adopted a village as suggested by the minister and we will not hesitate to make any sacrifice when the national cause is concerned.