Tourism can create the employment needed to go with economic growth
India slips 10 spots since 2019 on WEF’s travel & tourism ranking despite growth However, it is a very employment-intensive sector. The 2022-23 Periodic Labour Force Survey (PLFS) indicates that its share in employment is 5.5%: i.e., more than five times its share in GDP. Also, tourism has strong linkages with allied sectors in terms of both output and employment.
Thus, compared to its 0.9% direct share of GDP, the combined direct and indirect share is 1.8%. Similarly, its direct plus indirect share in total employment, estimated at 76 million persons, is 12.6%, well above its direct share of 5.5% (PLFS 2022-23). This is the core of the sector’s potential significance.
If the direct GDP share of tourism could be restored to its pre-pandemic level of 2.7% of GDP in, say, the next 3 years, then the total share of tourism plus allied activities would be back up to 5.4% The volume of direct plus indirect employment of the sector would then go up 95 million. If that direct GDP share could be further raised to 5.4%, double the pre-pandemic level, in another three years, then by the end of this decade, the tourism sector could be providing total employment of 195 million. These are not small numbers.
Yet, such goals are achievable. To address the scepticism in policy circles about the possible role of tourism in optimizing both GDP and employment growth, it is useful to look around the world at what it has contributed elsewhere. This column has been inspired by what I am seeing in our sojourn through southeastern Europe, how these countries have leveraged their historical legacies and natural features to maximize tourism revenue and employment.
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