Addressing a packed house of senior industry representatives and government officials at the FICCI Investors Meet, held recently in the capital, Hari Ranjan Rao, Managing Director, Madhya Pradesh State Tourism Development Corporation argued that most of the initiatives needed to make tourism work lied in the purview of state governments. He further elaborated the steps taken by Madhya Pradesh government to facilitate private investments and boost untapped sectors like water sports and cruise tourism, backed by an investor-friendly tourism policy unveiled by the state government in 2016. Excerpts from his address.
Action lies in the states. Time to take the lead
The fact remains that action lies in the state. Tourism is a sector which is not defined in the constitution and there was a movement, some time back, to include the word ‘tourism’ in the constitution. When we states went into the detail of it, we discovered that almost 80% of the items which were related to tourism actually belonged to the State list. So the action lies in the state. And therefore, it is important that states come on board quickly and understand the power of tourism.
I represent the government of Madhya Pradesh and, therefore, I can say on the behalf of the state of Madhya Pradesh is that, first of all, the understanding that we have been able to build very clearly in the minds of the policy-makers is that tourism is predominantly a private sector driven activity, and once that message is loud and clear, then lies in details of the policy.
So in the case of Madhya Pradesh, for example, and I am sure that all the other states are equally bullish about their tourism policy, we came up with a new tourism policy in 2016, having understood the nuances of the sector, we realised that what it is it that is missing? Of course, investments have been made in a good number of hotels but saying this is very easy. When you understand how a hotel investor looks into the project numbers, the biggest components are land and finances.
So we said that Madhya Pradesh has the advantage of land. Let us offer land but then every state could offer land. So what do we do? We have land banks. We offer land on a 90-year lease. Secondly, we offer land in an open, transparent, operating process – it is an online process. Also, the bid document and the lease agreement is available online for everybody to have a look at.
Subsidies galore: Madhya Pradesh looks at untapped sectors
When we give land to a particular player at a particular tourist destination, the bottleneck is that we give them land at the market rate, so we said that in rural areas the reserve price would be 5 Lakh rupees per Hectare, while in other areas the reserve price is ten Lakh rupees per Hectare. That is how the policy has worked. And, I am happy to announce that the policy, in the last one year, has given us wonderful results. We have already given land parcels to more than ten players who have registered lease deeds and taken permission. Of course, the policy was in place a couple of years back as well, with slightly different provisions. This policy has resulted in new resorts already having started functioning and new brands have already started functioning in Madhya Pradesh. Not that every player is waiting for the government to give land, everybody keeps moving, but this is the sweetener that we are providing.
One needs good political commitment for any policy making, Madhya Pradesh has one of the first state to have a tourism cabinet which exclusively discusses tourism related issues and takes decisions. It is fully empowered by the state cabinet to take all decisions related to the tourism sector. So that is a major step forward. Apart from that, we have the Chief Secretary’s committee which is empowered to take all decisions on all tenders and policy, and pricing issues which does not go to the cabinet regularly.
We came up with a policy exclusively for wayside amenities. We all talk about it. We know it is a big issue in the country if you travel by road. The policy is very interesting. The government of India and the Ministry of Tourism gives a lot of money for constructing wayside amenities but the challenge is: who will run it? We have a policy in which we have divided them into Brownfield, Greenfield and representative model, and we are happy to announce that 40 wayside amenities have already been given to private players; over 20 wayside amenities have already started functioning by private players under a common brand called ‘midway treat’. Our plan is to have over 300 such wayside amenities. We have done the mapping of the entire state and would have a wayside amenity at every 40-50 kilometres. So we would have around 320 wayside amenities. That is the plan.
Then we said, we have large water bodies, with over 800-900 kilometres of submergence, how do we invite tourism to those areas? There is a policy now in which we want water sports, cruise players, house boats, and others to come and ply their vessels in those water bodies. The licensing for these is to be given by the tourism department, as there is no maritime department in Madhya Pradesh, thus the tourism department has been given the mandate. We can presume that the outcome would be positive because it is not to regulate but to facilitate an investor to come and start investing in these sectors.
There is a long list of such initiatives, but I only wanted to highlight the point that whatever steps we have taken, it is because of a small, committed, knowledgeable team that is ready to work with every investor 24/7. If you do not receive an e-mail response from us within 24 hours, you can hold me personally responsible for the lapse on my team’s part. The point is that we are heading towards a very interesting time in the days to come. The country is moving very quickly. The tourism sector as a sector is desperately in need of massive infrastructural investment which not only means roads and airports. I am talking about hotel rooms and other such infrastructure.
By the way, we have defined 18 different types of projects for which we give capital subsidy. For example, in the MICE segment, we give a subsidy up to rupees ten crores for building a convention centre in Madhya Pradesh. If you build a ropeway on the state, you get 40% subsidy on ropeways. So these are the kinds of policy changes we have made and we hope that with the help of the private sector, it will deliver us good results. We are here to join hands and fulfil the dream that tourism should be the biggest employment generator for the country in the coming decade.