Impact of Demonetization on Inbound Tourism of India | Original Article

ABSTRACT:

It was 8th November, 2016 when a historic decision of demonetization was taken by the government of India under the leadership of P.M. Modi. It suddenly created a huge chaos all over the economy. There was a sudden short run cash crisis in all sectors of the economy, be it agriculture, manufacturing or service. Everyone had to manage long queues to get a maximum of Rs.2000 as daily cash withdrawal limits which was certainly a meagre amount by any standard. There was different degree of short run impacts of such a bold step to correct the many evils prevailing in the economy, such as parallel economy (black money), rampant corruption, etc., on various sectors. Though it has a potential of far reaching good impacts on the economy but started with a bad note. One of the badly hit industries was tourism especially the inbound tourism for some time. The sudden shortage of cash affected tourist activity adversely. Tour agencies had to face huge problem since there was no substitute of cash mainly at monuments and other tourist attractions. Agencies handling a group of 15-20 tourists require a huge sum of money in cash for the purchase of entry tickets to visit historical, religious and other tourist attractions. The major tourist circuits in India, such as Golden triangle (covering Delhi, Agra and Jaipur) witnessed a sharp fall in inbound tourists. It was not even possible for agencies to pay digitally for fuel, toll tax and other en route services. Some of the agencies even went up to rescheduling their inbound activities. My paper will analyze detailed impact of demonetization on various tourism activities, how was it dealt with and how adversely it affected the inbound tourism.