There are a number of reasons that have together led to the development and prosperity of the travel and tourism industry in India. The economic growth has added a huge sum to the ranks of the middle class in India, a sector that is driving the growth of the country’s domestic tourism area. According to recent reports, the disposable income in India has expanded by more than ten percent, and a major portion of that is being spent in travel. The blooming IT industry has also contributed to this growth, in the form of an increasing number of inbound business trips issued to foreigners. Such individuals also tend to add a week or two extra to their business visit, and they tend to spend more in India.
The Planning Commission of the country set up a working group to assess how tourism can be used as a tool for sustainable development, to alleviate poverty, and to improve employment opportunities. The Ministry of Tourism under the government of India has set a five year plan. During the next five years, the country will aim to increase the current international inbound share of 0.6 percent to one per cent. Though the target seems easily achievable, it does demand a consistent growth year after year, approximately 12 to 13 per cent. The present annual growth rate is under ten percent, which makes the process more difficult and challenging. At the end of October 2012, the growth rate compared with 2011 was only around 6 per cent.
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