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Friday, 08 June, 2018, 13 : 00 PM [IST]

Government seeks PSUs assistance for boosting tourism

As per the Business Standard report, the government, after naming tourism as a priority sector to boost job growth, has via the Prime Minister’s Office (PMO) asked Central Public Sector Units (PSUs) to hold official meetings at tourist hotspots. In a letter sent to board members of CPSEs, it has asked them to hold all upcoming board meetings and conferences outside the four metropolitan cities. The PMO has even suggested names of 10 destinations where meetings should take place, including Ajanta-Ellora, Hampi, Bodh Gaya, Varanasi and Hampi. 

CPSEs hold industry conferences where a large number of delegates come. Besides, there are multiple board meetings throughout the year. This can help to prop up business of the hospitality industry in such locations,” said a senior government official.

The PMO has simultaneously directed the Ministry of Civil Aviation to develop airports in tourism circuits through its Regional Connectivity Scheme (RCS). The third round of RCS, named UDAN, lists places with proximity to 12 tourist hotspots and the ‘Buddhist circuit’. The cities identified include those where airports exist but there is no or irregular air connectivity. The preliminary list identified by the government are Ajmer, Amaravati, Amritsar, Badami, Dwarka, Gaya, Kanchipuram, Mathura, Puri, Varanasi, Velankanni and Warangal. 

“There have been a few rounds of consultancy meeting and once the proposal is finalised, we will start developing the airports. Some of these areas have a functional airport, while some have airstrips,” an Aviation Ministry official said. 

According to the mechanism of UDAN, the Ministry provides viability gap funding (VGF), so that airlines come forward to ply on difficult routes under the connectivity scheme. 

Under the latest model, the Tourism Ministry will provide the funding and there will be no fare cap, unlike the original scheme. The official said the government might consider a different model of bidding for tourism circuits. On that is being considered is underwriting of seats. For instance, airlines will bid based on the number of seats they will need VGF for. The airline which bids for the lowest number of seats for underwriting will win the route. 

“Some of the airports in the tourist circuits are developed and an airline might feel it can easily fill half the seats in a 72-seater ATR. The rest will be underwritten by the State government where the airport is, meaning the rest of the seats will be paid for by the State,” the official said.
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