See

discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/301701243

Economic impact of Tourism in Jammu and

Kashmir

Article · April 2016

CITATIONS READS

0 5,409

2 authors:

Audil Khaki Aasif Hussain Nengroo

American University of Middle East, Kuwait Central University of Kashmir, Srinagar,India
9 PUBLICATIONS 5 CITATIONS 22 PUBLICATIONS 16 CITATIONS

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Evaluation of ICDS in Kashmir View project

Financial Inclusion and Poverty Alleviation View project

All content following this page was uploaded by Audil Khaki on 29 April 2016.

The user has requested enhancement of the downloaded file.

Indian Journal of Economics and Development, Vol 4 (3), March 2016 ISSN (online): 2320-9836
ISSN (Print): 2320-9828

Economic impact of Tourism in Jammu and Kashmir

Aasif Hussain Nengroo*1, Ghulam Mohammad Bhat2, Audil Rashid Khaki3
1,2
Department of Economics, Central University of Kashmir, 190015, India
3
Department of Business and Financial Studies, University of Kashmir, 190006, India
1
[email protected], [email protected],[email protected].

Abstract
Background/Objectives: Jammu and Kashmir State has a greater potential to become a major tourist destination in
the world. The role of tourism in the economic development of J&K state has been an area of immense interest from
policy perspective. To understand the economic impact of tourism in the J&K state, present paper tries to examine
various parameters of economic development such as tourist inflow, employment generation, State Gross Domestic
Product, development of infrastructure and regional development.
Methods/Statistical analysis: The study is based on secondary data. Data has been collected from various sources
like Ministry of Tourism Government of India, Jammu and Kashmir Tourism Development Corporation and
Directorate of Tourism, Annual Economic survey of J&K, United Nations World Tourism Organisation, World Travel
and Tourism Council and other published research papers and official reports.
Findings: We found apart from agriculture sector, tourism sector is the most popular source of income and
employment generation for the J&K state economy. The Year 2011 has made history in terms of surpassing all
previous records of tourists and pilgrim arrivals in the state. Our analysis shows that except in 2008-09 when there
was greater political instability in the state, the revenue earned from Director Tourism Kashmir/Jammu has shown a
continuous increasing trend and has increased around three fold from 2006-07 (Rs 32.25 Lakh) to 2011-12 (Rs 93.3
lakh). Further the analysis of our data shows that there is a positive impact of tourist inflow on employment i.e. with
the increase in tourist inflow, total employment also rises.

Keywords: Tourism, Employment, Tourist Inflow, Revenue, Infrastructure, Regional Development.

1. Introduction
Over the past six decades, tourism has experienced continued expansion and diversification, becoming one of the
largest and fastest-growing economic sectors in the world [1]. As per the estimates of World Travel and Tourism
Council, Travel & Tourism’s total contribution to the global economy in 2014 was US$7.6 trillion, which equates to
9.8% of total economy GDP in 2014. In 2014, 2.1 million new jobs were generated directly in the sector, and in total
6.1 million new jobs were created as a result of total direct, indirect and induced activity. The total contribution of
Travel & Tourism to employment grew 2.3% in 2014, while the total GDP contribution grew 3.6%, faster than wider
economy in 2014 and registering positive growth for the 5th successive year. In total, Travel & Tourism supported
277 million jobs in 2014, 1 in 11 of the world’s total [2]. This is again evidence that Travel & Tourism is a key engine
for continued global growth and job creation. As per the estimates of United Nations World Tourism Organisation
(UNWTO), global tourism receipts hit a record by earning US $1159 billion in 2013. Despite intermittent shocks,
international tourist arrivals have shown virtually continual growth from 25 million in 1950 to 278 million in 1980,
528 million in 1995, and 1087 million in 2013 and are expected to reach 1.8 billion by 2030 [3].
In India the number of foreign tourist arrivals in 2013 showed an increase of about 4.1 % over 2012. During the
period January - December 2013, 68.48 lakh (Provisional) tourists visited India against 65.78 lakh in 2012. Foreign
Exchange Earnings (FEE) from tourism in terms of US$ during January to December 2013 were US$ 18.133 billion
with a growth of 2.2%, as compared to US$ 17.737 billion with a growth of 7.1% during January-December 2012 over
the corresponding period of 2011[4].

1 www.iseeadyar.org
Indian Journal of Economics and Development, Vol 4 (3), March 2016 ISSN (online): 2320-9836
ISSN (Print): 2320-9828

In Jammu and Kashmir, the northern most state of India, tourism has been identified as an industry with potential
of development next to agriculture and horticulture [5]. The lush green forests, sweet springs, perennial rivers,
picturesque alpine scenery and pleasant climate of Kashmir valley, also known as “the paradise on earth” has
remained an internationally acclaimed tourist destination [6], whereas Jammu region-the land of temples is
attracting a large number of pilgrims. Ladakh region, the moon land, has been a much sought-after destination
especially for the foreign tourists and is famous for adventure tourism [7].

2. Objectives of the Study

The study is based on two objectives: 1. To analyse the tourist inflow of J&K state. 2. To study the economic impact
of tourism in the economic development of J&K in terms of employment, income generation, infrastructure
development and regional development.

3. Methodology

The present study is based on secondary sources. Information has been collected from various official sources like
Ministry of Tourism Government of India, Jammu and Kashmir Tourism Development Corporation and Directorate of
Tourism, Annual Economic survey of J&K, United Nations World Tourism Organisation, World Travel and Tourism
Council. In addition to this, data have also been collected from other reliable online sources like articles, journals and
newspapers.

4. Analysis and Discussion

4.1 Tourist inflow
Tourism has emerged as an important and one of the major contributors to the state economy. Till 1989, tourism
has been the major economic activity of the state. However it was hard hit following the outbreak of militancy during
the past two decades. This has affected the economic stability as well as employment opportunities of its people.
However tourism in the state has revived recently. Year 2011 has made history in terms of surpassing all previous
records of tourists and pilgrim arrivals in the state. It is estimated that almost 13 million tourists visited J&K in 2012
which placed J&K on 17th position where as Andhra Pradesh is ranked no.1 in the list of major tourist destinations of
India [8].The tourist arrivals of Jammu, Kashmir and Ladakh from 2008 to 2014 are presented in table 1.

Table 1. Tourist arrivals in the state

Kashmir Valley Jammu Ladakh
Year Amarnath ji Domestic/Foreign (Mata Vaishno Devi Ji) Domestic/Foreign
2008 498075 572100 6576000 72000
2009 373419 601250 8235064 78573
2010 458046 736448 8749000 76055
2011 634000 1314432 10115232 179204
2012 621000 1308765 10394000 178750
2013 353969 1171130 9287871 137650
2014 372909 1167618 7803193 181301
Source: Economic Survey J&K, 2014-15.

4.2 Employment Generation

Broadly tourism generated employment may be classified in to three major heads one is direct employment that
sell goods and services directly e.g. hotels, restaurants, shops etc. Second one is indirect employment, which
generally supplies goods, services to the tourism business and thirdly investment related employment in construction
and other capital goods industries [9]. As per World Travel and Tourism Council (WTTC) estimates, an investment of
10 lakh in travel and tourism industry will generate about 90 jobs which are much higher than its competing sectors
like Agriculture and Manufacturing which generate 45 & 13 jobs per 10 lakh respectively [10]. Santek Consultants
Private Limited, Delhi, [11] in her report “20 years perspective plan for the sustainable development of tourism in the

2 www.iseeadyar.org
Indian Journal of Economics and Development, Vol 4 (3), March 2016 ISSN (online): 2320-9836
ISSN (Print): 2320-9828
State of J & K” projected impact of tourist inflow on employment generation of J&K from 2002 to 2020 which is
presented in table 2 and figure1.

Table 2. Generation of Employment on Implementation of Tourism Development Plan

Additional Direct In-Direct
Total employment col.
Tourist Inflow Employment Employment
(2)+(3)
Year (In lakhs) (in lakhs ) (in lakhs )
1 2 3 4 5
2002 62.83 1.57075 7.85375 9.4245
2003 67.43 1.68575 8.42875 10.1145
2004 72.36 1.809 9.045 10.854
2005 77.66 1.9415 9.7075 11.649
2006 83.36 2.084 10.42 12.504
2007 89.48 2.237 11.185 13.422
2008 96.06 2.4015 12.0075 14.409
2009 103.13 2.57825 12.89125 15.4695
2010 110.73 2.76825 13.84125 16.6095
2011 118.91 2.97275 14.86375 17.8365
2012 127.7 3.1925 15.9625 19.155
2013 137.16 3.429 17.145 20.574
2014 147.34 3.6835 18.4175 22.101
2015 158.29 3.95725 19.78625 23.7435
2016 170.09 4.25225 21.26125 25.5135
2017 182.78 4.5695 22.8475 27.417
2018 196.46 4.9115 24.5575 29.469
2019 211.2 5.28 26.4 31.68
2020 227.08 5.677 28.385 34.062
Source: Santek Consultants Pvt. Ltd. New Delhi.

Figure 1. Impact of Tourist Inflow on Employment from 2002-2020

Source: Constructed on the basis of table 2.

The upward sloping curves in the figure 1 shows that there is a positive impact of tourist inflow on employment i.e.
with the increase in tourist inflow, total employment (Direct &Indirect) also rises. It means that if the current trend
continues, total employment would reach to 34.06 lakhs from a tourist inflow of 227.08 lakhs till 2020. However it is
important to note here that in order to meet the needs of such tourist inflow, there is a need to carry forward the
developmental process in a coordinated manner [8].
4.3 Revenue Generation
The tourism industry in Jammu and Kashmir is one of the most flourishing industries in the state. This industry plays
an important role in the development of all the regions of Jammu, Kashmir and Ladakh. As the industrial sector is not
very much developed in the state so the activities related to tourism is considered with much seriousness by the
state government. Apart from agriculture sector, tourism sector is the most popular source of income for the state.

3 www.iseeadyar.org
Indian Journal of Economics and Development, Vol 4 (3), March 2016 ISSN (online): 2320-9836
ISSN (Print): 2320-9828
This sector also generates sufficient revenue for government, private sector and public sector undertaking which has
shown significant increase over the years, the revenue generations is expected to increase manifold provided the
conditions remains normal and the tourist influx to the state increases in a desired manner [12]. As per the J&K
Economic Survey [13], during the year 2010-11, revenue realized from various sources was recorded as Rs 4362.68
lakhs showing an Increase of around 33.19% as compared to the previous year. Revenue realized in the financial year
2011-12 has touched to Rs 4692.92 lakhs. The details of revenue realized for the last 6 years are given in the table 3.
Table 3. Revenue generated by J&K Tourism Development Authorities (2006-12)
Name of the department Revenue earned during last six years ( in lakhs)
/
Organization 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Director Tourism
32.25 62.06 54 56.65 72.63 93.3
Kashmir/Jammu
SKICC 52 64 71.2 65 110 114.5
Gulmarg Dev. Authority. 32.46 48.5 51.17 34.35 37.32 145
Pahalgam Dev. Authority 9.95 19 12.73 6.68 23.4 31
Sonamarg Dev. Authority 36.35 32.5 45 39 79.4 10
Patnitop Dev. Authority 15.62 79 20 19.54 30 26
Royal Spring Golf Course 34.73 50.06 45.66 44.25 64.35 63.12
Cable Car Corporation 676 798.81 839.14 1116 1248 1957
J&K TDC. 1765.39 1763 1963 1894 2697.58 2250
Total 2657.75 2916.93 3101.9 3275.47 4362.68 4692.92
Source: Economic Survey, J &K (2011-12)

The analysis of table 3 shows that revenue generated by various authorities has increased over the years. The
above table shows that except in 2008-09 when there was greater political instability in the state, the revenue
earned from Director Tourism Kashmir/Jammu has shown a continuous increasing trend and has increased around
three fold from 2006-07 (Rs 32.25 Lakh) to 2011-12 (Rs 93.3 lakh). Similarly income from SKICC has more than
doubled over the same period. The above table further shows except in 2009-10, revenue from Gulmarg
Development Authority has also shown positive trend and has increased by more than four times from 2006-07 to
2011-12. Similar trends were found from Pahalgam Development Authority from which revenue has increased from
Rs 9.95 lakh in 2006-07 to Rs 31 lakh in 2011-12. The revenue from Cable Car Corporation and J&K TDC has also
increased from Rs 676 and Rs 1765 in 2006-07 to Rs 1957 and Rs 2250 in 2011-12 respectively. However the analysis
of the table 3 shows that revenue from Sonamarg Development Authority, Patnitop Development Authority and
Royal Spring Golf Course has shown discouraging trend. From Sonamarg Development Authority the revenue has
decreased to Rs 10 lakh in 2011-12 after reaching at peak level Rs 79.4 lakh in 2010-11. Similarly from Patnitop
Development Authority income has decreased from Rs 30 lakh in 2010-11 to Rs 26 lakh in 2011-12.
4.4 Infrastructure Development
Tourism and development of infrastructure are interrelated sectors in the sense that better infrastructure, will
provide the way for more tourism related activities. Lack of infrastructure is among the main causes of
underdevelopment of tourism [8, 14]. Development of infrastructure includes good infrastructure facilities, better
sanitary conditions and more intake capacity during peak seasons and proper human resource development [8]. As
per the recent economic survey 2013-14, there are 1508 registered hotels and restaurants in the state apart from 84
tourist bungalows and huts, generating around 8 % of GSDP. The Govt. is taking all possible steps and making all
efforts to develop world class tourism infrastructure at tourist destinations and circuits. Development of national and
internationally important destinations and circuits through three Mega Circuits i.e. Buddhist Circuit for Leh ii) Sufi
Circuit for Kashmir and iii) Spiritual Circuit for Jammu agreed to by Ministry of Tourism, Govt. of India is a judicious
mix of cultural, heritage, spiritual and eco-tourism to give tourists a holistic view about J&K [15].
4.5 Regional Development
Tourism acts as a catalyst in the development of backward and far flung regions of a particular area. Development
of tourism will lead to the progress in rural / backward regions [16]. It is often seen that most of the scenic &
beautiful destinations of a country are located in the backward areas which have a significant contribution in the
economic development of these areas through the development of local industries. Same is the case of J&K where
tourists are attracted towards the areas which are located in remote regions of state like Daksum valley in Anantnag,

4 www.iseeadyar.org
Indian Journal of Economics and Development, Vol 4 (3), March 2016 ISSN (online): 2320-9836
ISSN (Print): 2320-9828
Lolab and Bangus valley in Kupwara, Suru valley in Kargil, Gurez valley in Baramulla, which are known for their scenic
beauty and charming climate and for greater tourist potential than those offered by famous destinations like
Gulmarg, Pahalgam and Mughal gardens among the likewise. Tourists visiting such unexplored attractive spots can
give fillip to the economic condition of the residents by promoting local art like Handicrafts, Handlooms, Cricket bat
industry etc.

5. Conclusion

Tourism is the leading industry in the J&K and has great potential for employment and state revenue. The revenue
generation is expected to increase manifold provided the situation remains normal and the tourist influx increases in
a desired manner.

6. References

1. The role of ICT in tourism industry. http://www.aebjournal.org/articles/0104/010406. Date accessed:

25/05/2015.
2. Trends and skill needs in tourism. http://www.wttc.org/media/files/reports/economic impact research/economic
impact 2015 summary_web.pdf. Date accessed. 23/03/2015
3. WTO, Tourism Highlights 2014 Edition, UNTO Publications, 2014.
4. Ministry of External Affairs Annual Report 2011-2012.
http://mea.gov.in/Uploads/PublicationDocs/19337_annual-report-2011-2012.pdf.Date accessed: 09/06/2015.
5. Ahmad, I.M & Nengroo, A. H. Impact of Turmoil on Tourism of Kashmir, Journal of Economics and Sustainable
Development, 2011; 2(7), 1-7.
6. Jammu and Kashmir. http://knowindia.gov.in/knowindia/state_uts.php?id=11. Date accessed: 27/08/2015.
7. Khan, J.I. J&K Economy, Directorate of Distance Education, University of Kashmir, Srinagar 2011.
8. Impact of Tourism industry on Economic Development of Jammu and Kashmir.
http://www.ijser.org/paper/Impact-of-Tourism-Industry-on-Economic-Development-of-Jammu-and-Kashmir.
Date accessed: 22/06/2014.
9. Role of tourism in employment generation in Jammu and Kashmir. http://www.altius.ac.in/pdf/pdf/60. Date
accessed: 12/10/2015.
10. H. A. Mir. Impact of Tourism Industry on Economic Development of Jammu and Kashmir, International Journal of
Scientific & Engineering Research.2014; 5(6), 592-598.
11. Final Report on 20 Year Perspective Plan for Sustainable Development of Tourism in the State of Jammu And
Kashmir. http://incredibleindia.org/lang/images/docs/trade-pdf/surveys-and-studies/perspective-plans-of-
states-UTs/jammu%20kashmir. Date accessed: 13/10/2015.
12. Mukhtar, Safeer. Sustainable tourism development with special reference to Jammu and Kashmir. International
Journal of Applied Financial Management Perspectives.2013; 2(2), 419.
13. J&K Economic Survey, Directorate of Economics & Statistics, J&K, Issues of 2011-12, 2012-13, 2013-14 and 2014-
15 Vol 1.
14. Bhatia, A. K. Tourism in India- History and Development, New Delhi: Sterling Publishers, 1978.
15. SWOT Analysis. http://www.jandkplanning.com/images/Economic_Survey/4-swot.pdf. Date accessed
24/06/2015.
16. Smith, Stephen L. J. Estimating the local economic magnitude of tourism, Tourism analysis: A Handbook, UK:
Longman Group, 1989.

The Publication fee is defrayed by Indian Society for Education and Environment (www.iseeadyar.org)

Cite this article as:

Aasif Hussain Nengroo, Ghulam Mohammad Bhat, Audil Rashid Khaki. Economic impact of Tourism in Jammu and
Kashmir. Indian Journal of Economics and Development. Vol 4 (3), March 2016.

5 www.iseeadyar.org

View publication stats