Special tourism zones would boost Kerala's economy

20 Sep 2006


Hectic discussions, debates and even disputes at times are going on in the government and corporate circles about creating special economic zones (SEZs) in our country. It is reported that the government of India has already approved about 150 SEZs and another 200 fresh proposals are on the anvil. Columns and reports fill the pages of dailies and magazines highlighting the country's promising vistas in this regard.

Even in Kerala, the new government is enthused with this farsighted plan and the industries minister recently announced that SEZs will be developed in the state inviting investors from all over India and abroad. Kerala is one of the top-listed tourism destinations in the world. Then shouldn't the government of Kerala think of developing 'special tourism zones' (STZs) in the state, which has been benefited and continues to be benefited by the revenues generated by tourism and the related services in the state? Why not?

Two decades have gone by ever since tourism gained the status of an industry and tremendous developments have taken place in the tourism industry with a lot of players parading the scene and doing their best to churn out cream and butter to enrich the economy of the state. In view of this tremendous growth potential of the tourism industry, the insatiable requirement of tourist infrastructure is of high magnitude. It is therefore essential that special areas are created on the lines of SEZ in the state.

Some South East Asian countries like Philippines, Thailand, etc, that have recently been making headlines in the world of tourism, are going a step further and developing special tourism areas with special packages for the investors in these tourism zones and marketing them to the world traveller. One of the finest examples of a developing country in the world that turned around its economy by developing STZ in line with SEZ is UAE.

The desert and dirty oil image of the emirates of the 70s has completely transformed into a tourists' must-see destination in just two decades. Even now activities galore and one sees the map of the Gulf bedecked with two palm islands of an unimaginable proportion. These are all visionary projects being developed with tourism in mind, which is a great booster of a country's economy.

Though not on such magnificent scale, Kerala, which has tremendous experience in catapulting its tourism image through innovative plans and projects could think of going a step further to link its tourism stronghold with its untapped economic opportunities. Areas that have great tourism potential around the tourist destination cities as well as along the coastlines of Kerala could be identified and developed as STZs. Each special tourism zone should be able to provide sufficient facilities for accommodation and dining, facilities for shopping, facilities for entertainment, etc.

Create land banks for hotels; simplify the procedures for setting up tourism projects. There must be a single window clearance for each project. The government should enter into partnership with the private sector by way of allocating land for tourism projects on long-term lease or revenue sharing basis. Sound terms and conditions must be formulated for such public-private partnership programmes.

The private sector would be able and only too willing to provide all the facilities and services inside the zones, provided the government offers some concessions and incentives in similar tones in tune with the SEZ; like 100-per cent tax exemption for a specified initial period until such STZs become fully viable and sustainable, exemption from import duty on capital goods, raw material, consumables, spares, withdrawal of luxury tax, lower VAT, etc. All the concessions available to the special economic zones could be fine-tuned to the special tourism zones.

Restoration of monuments and setting up of new ones wherever necessary, aesthetic landscaping and up-keeping, outsourcing of some facilities like the ITES, creation of tourist shopping avenues, village and cottage industries, cultural learning and performing centres, provision of multilingual and cross cultural service providers with the help of private institutions, etc, should be part of the STZ development plan. Well-planned complete zones where tourists could have novelty in tourism experience in the state would attract more and more tourists from newer countries. Exclusive NRI tourism zones or elite world tourist zones for high-end global tourists could also be developed.

Declaring STZs with a clear-cut policy and plan in consultation with big private players in the field of tourism and related services is the first step. When the government is ready to give necessary support services in the form of infrastructure and tax relief, private investors will come flocking in to take the concept to its dazzling heights, resulting in the creation of even newer infrastructure in the region, increased economic activities and also employment generation for the dependent communities in the areas that fall in the STZs.

Preference could be given to under-developed areas like the the Malabar region, some of the unexplored charming coastal areas of Kerala, the plantation regions such as the High Range and Wyanad, which are awaiting a Midas' touch. Take for example, the Malabar region. It is one of the not-so-fully-exploited tourism destinations in Kerala despite its high potential. It is also one of the economically backward areas in the state. Creating a STZ for the Malabar region will certainly help upgrade the socio-economic status of this region as this would ease the unemployment problem among the communities living in such under developed areas of Kerala.

By taking up such bold sustainable developmental projects will in turn dispel the notion among global investors that Kerala is still a sore spot of simmering labour problems. If a Budhdhadeb Bhattacharya could turn around the destined-to-be-a-Left state, West Bengal, would the new government under the leadership of a people-friendly 'VS' (chief minister V S Achuthanandan) not able to change the face of Kerala by such innovative economic policies?

The revenue generated in the economy of Kerala due to tourism is estimated to be more than Rs4,000 crore, which is around 6.5 per cent of the state's GDP. The direct employment in tourism sector in the state, as estimated by Tata Consultancy Services a few years ago, was about 1.50 lakhs. Now it should be more than 2 lakhs. The direct and indirect employment in tourism in Kerala is estimated at around 9 lakhs. Such is the strength of Kerala's tourism, which could further be strengthened by developing well-planned STZs in the state.

(The views expressed in this article are the author's own. They do not in any way reflect the views of the organizations he represents.)

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