Demand And Cost Consequences Of Violence Affecting Domestic Tourism: An Indian Case Study

Increased political violence among the deprived sections of the society, particularly the forest-dwelling tribes is emerging as a major internal security threat in India. Widening disparities in income and opportunity, both real and perceived, between agriculture and the non-agricultural sectors and between rural and urban areas is the root cause of this tension. A pseudo-civil war in 165 districts (about one-third of the total geographical area of India) is not only diluting the exceptionally rapid growth of the Indian economy but is also destroying the growth of domestic tourism by reducing inter-state movement of prospective visitors. Therefore, the main aim of this contribution is to assess the demands and cost consequences of violence affecting tourists in India. During the past three years, India emerged as a travel rich nation by doubling the number of domestic visits. The number of domestic visits in 2009 was estimated to be 659 million. The regional tourist offices of India also estimated an average 80% fall of tourist visits to disturbed places. The corresponding loss in tourist expenditure may add up to Rs 98.6 billion a year and after taking account of the tourist multiplier effect (using a multiplier value of 2.5), will add up to Rs 2.46 trillion per year.