Potential and Performance of Rural Tourism in India: Assessing Intra-State Variations

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1 ISSN : (Online) International Journal of Research in Management & Potential and Performance of Rural Tourism in India: Assessing Intra-State Variations I Saurabh Gupta, II Dr. Anurag Singh I Senior Research Fellow, Faculty of Management Studies, Banaras Hindu University II Assistant Professor, Faculty of Management Studies, Banaras Hindu University Abstract In time of sluggish industrial activity and meagreeconomic growth, experts can focus on few forms of service sectors that have performed exceedingly well and tourism is one of them. Tourism is a dynamic industry which is continuously evolving in response to changes in the micro and macro environment. Over the years new forms of tourism have come up, such as medical tourism, sports tourism, eco-tourism, rural-tourism etc. This study aims at assessing the potential, performance and prospects of rural tourism in various states of India. The Cluster analysis resulted in three distinct groups of states with regard to potential and performance. One of the key findings of the study is that, the states who, have performed well in developing the rural sites were categorized in high potential and high performance cluster. For the better performance of all the three clusters the dissimilar uniform code of conduct was recommended. Key Words Rural tourism, Potential and Performance, Intra state Variations, Cluster Analysis, Post Hoc test. I. Introduction In the present time of stationary economic growth and stagnant industrial activity there are very few sectors which are performing exceeding well and tourism is one of them. This sector has shown excellent performance, which can be understood from few indicators like tourist influxes and income generated in the area. It has emerged as the top performer in service sector and accounts for substantial amount of foreign exchange earnings. Tourism is a dynamic industry which is continuously evolving in response to changes in micro and macro environment. Over the years new forms of tourism have come up like medical tourism, sports tourism, eco-tourism, rural tourism etc. India is the world second largest country in terms of population and most of the population resides in rural area. According to 2001 census, 72.2% of the population lived in about 638,000 villages and enjoys the spectacular shade of nature and culture (Roy, 2012). The figure of villages in India, itself is the representation of great potential of rural tourism. The other side of the coin is that the residents of these villages are very poor and suffers from daily livelihood. Though the government of India through Ministry of Rural Development had initiated many schemes to bring up the standard of living of rural people, but they were insufficient to bring up the significant changes. The ministry of tourism off late realized the significance of rural tourism, which can be an important tool to provide better livelihood to rural people and developed the tourism policy in year 2002 aimed to develop few rural tourism sites as per the potential of area. Since independence, the Central and State, both the Government focused on agriculture, manufacturing, village and cottage industries and the development of infrastructure in rural India, but rural tourism was never seen as an economy contributing area and could not gain the space in the policy document, neither in the form of plan nor in the form of implementation. The rural tourism got little attention of policy makers in last decade, when the ministry of tourism planned a blueprint for the development of rural tourism sites in India. Though the work of rural tourism sites developments at very infant stage, but if developed, it will modify the entire rural landscape and will transform the living standard of rural populace. Tourism being a labor intensive industry can generate enough employment opportunities for the villagers thereby making them economically empowered. It has special significance for the marginalized sections of society such as women and backward communities. Rural people will be able to find a source of livelihood in the nearby areas of their native place and thus can improve their wellbeing level. This shall have several other indirect benefits, as for instance it shall decrease the ever increasing burden on cities by slowing the rate of migration from rural to urban areas. Similarly, the local resources can be optimally utilized. Despite the seminal efforts of the state, studies shows that rural tourism is still have to make a significant leap forward and this form of tourism has to catch the attention of tourists and further responsiveness of policy makers. Hence this research paper focuses on two aspects. First it aims at assess the intra state variations in the potential and performance of rural tourism development. Second, it estimates and clubs the potential and performance of the states in clusters, so that the better implementation strategy can be suggested to policy makers. This paper is organized as follow: Having discussed introduction in section 1, section 2 presents a brief survey of related literature. Section 3 documents in detail the methodology adopted for the study. It contains research problem, research questions, research objectives and scope of study, variable and data description and techniques of data analysis. Section 4 has been devoted to analysis and discussion. Section 5 reports the findings and implication of the policy makers. Last section summarizes and concludes. II. Literature Review The concept rural tourism was always argued in many literatures and the researcher didn t arrive at a conclusion. (Pearce 1989; Bramwell 1994; Seaton et al. 1994). Despite the specificity of rural tourism to a country s political, economic and social systems, issues of definition and conceptualization have been sought (Lane, 1989, 1994; Sweeney, 1995). Lane (1994) advocated that rural tourism is a tourist activity of rural area, All Rights Reserved, IJRMBS

2 International Journal of Research in Management & ISSN : (Online) it is pastoral in nature, atmosphere and role, and echoes the multifaceted rural environment, culture, economy, and history. The definition of Gannon ([1994], In: Rátz-Puczkó (1998) rural tourism offers the cultural and area specific entertainment by the villagers and others to encourage income generation through tourists arrival in their area. The wider explanation of rural tourism describes, that it is not only the promotion of agro-tourism but also the promotion of refreshment in the lap of nature, rural air and other entertainments like lodging, festivals, and handmade decorative and agrarian products (Briedenhann, et. al, 2004). Perales (2002) differentiates between two kinds of rural tourism i.e., traditional and modern rural tourism. Traditional rural tourism offers lodging at farm, whereas modern tourism offers awareness of wildlife, local ethos and the architectural legacy (Perales, 2002). Few researches talks about demand side descriptions of rural tourism instead of supply side definition. Demand side definition states that, rural tourist demands the rural experience through traditional and modern methods (Roberts, et. al, 2001). The contemporary view is to integrate the both demand as well as the supply side of the rural tourism. In the table - 1 the literature to conceptualize the rural tourism is summarized. Table 1: Main Approaches to Conceptualising Rural tourism Direction of Research Content of definition approach Supply side EC (1986) Accommodation and all other attached rural activities provided on farm Thibal (1988) Rural hospitality based on local co-operation aiming to create jobs and improve economy EC (1988) Supply-side touristic activities to enhance the preservation of local values and the creation of jobs Gannon (1994) All the services and entertainment programs provided in a rural region for supplementary income OECD (1994) All the traditional services provided by local families connected to the natural environment and favouring local traditions based on the characteristic appearance of the rural area Sharpley [1996] Touristic services provided in the countryside Demand side EC (1999) Tourism provided in low density areas (forests, mountains, holiday areas off the beaten track, agricultural areas, villages, wilderness) according to the tourist s choice, and based upon the hands-on experiences of the characteristic physical and human environment Mintel (2007) Complex touristic activities carried out in rural environment in close connection with nature and people, based upon the personal experience of the rural lifestyle, culture and agriculture Integrated Hall et al. (2005) A form of tourism sometimes created by demand, sometimes done in order to supplement service income Euro Gítes (2011) Accommodation provided in traditional rural environment, offering experiences of local gastronomy and lifestyle, as well as activities done in nature Rural tourism is a region specific activity with different nature, varies across regions and countries (Gartner, 2004; Sharpley and Roberts, 2004). The statement of Gartner (2004), can be confirmed from the findings of different rural tourism researches which has included the cases of different countries and continents. Sharpley and Roberts (2004), resolved that two similar sites of rural tourism gives dissimilar results worked on same line and matter of research. Weaver (1986) stated that activities of rural tourism can generate employment scenes, increase income generation means, expand local economy, increase Govt. income from taxes, provide community exposure and promotes regional culture. Discussing non-financial benefits, Jurowski (1996), said that tourism activity in the area, if worked properly can even enhance ecological resources. The importance of rural tourism has increased manifold as it is encouraged by demand of tourist to travel in unexplored areas (Cánoveset al., 2004; Hall, 2004; Stamou and Paraskevopoulos, 2006). Out of the total world s poor population, near about seventy five percent of the world s poor have their base in rural areas (Chaudhry and Gupta, 2010) and it is pertinent to mention 2014, IJRMBS All Rights Reserved 10 that one-third of rural zones are dry and semi-dry. Though all type of zones are good for the development of rural sites but developing the site in dry zone is little easier (Shackleton, et. al, 2007).Hence the revitalization of rural community through rural tourism is achievable as it is being done by many government and other agencies of the world. Finding the positive impact of rural tourism on poverty elevation of rural residents, Holland, et al. (2003) supported the development rural tourism sites and advocated the additional effort. Holland, et al. (2003) further stated that tourism promotion in the area will benefit rural people and will also increase their participation in destination management. High level of tourism activity in the area involves high level of local participation, which is an important activity of poverty elevation. Extensive survey of the literature lets the research to the components of rural tourism used for experiencing the life style of rural living.

3 ISSN : (Online) International Journal of Research in Management & B. Research Questions The following research questions have guided this study: 1. What is the potential of rural tourism in various states of India? 2. What is the performance of states while implementing on rural tourism sites? 3. Is there any similarity or variation among various states of India for rural tourism performance? 4. Is there any significant difference among various states of India in promoting rural tourism? Fig. 1: Typical Components of Rural Tourism Source: Researchers own Creation After conducting the extensive literature survey and assessing the variables considered by various researchers in the rural tourism field, it can be said that all the studies conducted earlier falls short in assessing the aims considered in this study. On the basis of finding the suitable gap, this study aims to find the intra state rural tourism potential, performance and variations, which is based on problem of the study. III. Methodology A. Statement of problem To provide the social and economic justice to the vast segments of the rural masses who have been persistently deprived of livelihood through employment and income generation, the Ministry of tourism worked out on National Tourism Policy in year 2002, aiming to develop and promote few rural tourism sites, which were competent in art, craft, culture, heritage, handloom, etc. Besides the unremitting efforts of Government, very few rural tourism sites could come up in moderate way, Orchha Village, in Tikamgarh District of Madhya Pradesh is one of them (AC- Nielson, 2011). Finding the disappointing results of tourism ministry to promote and develop rural sites, the report of the steering committee on tourism for the eleventh five year plan ( ) recommended the uniformity of tax policy; unified composite license; uniform safety and ecological guidelines, uniform luxury tax, loan offering on uniform rate of interest, uniform subsidies on capital investment, uniform subsidies on power supply, equipment purchase and uniform interest subsidies in all the states of the country for the growth of rural tourism (Chabbra, 2012). Though Ministry of tourism had undertaken all the measures to implement the recommendations of planning commission but failed, due to difficulty of implementation. One of the important reasons can be sited is that all the suggested measures for promotion of this sector were to be taken care by separate ministries which aims at separate functions, separate scope, and separate motives. In view of the above, where it is becoming difficult to implement the recommendation of planning commission in India at large, a manner to implement the uniformity of conduct through clusters of states on the basis of potential and performance can be researched for the promotion of rural tourism in India. Hence this research aims the below mentioned objectives based on certain research questions. C. Objectives and Scope of the study This study is aimed at achieving the following objectives: 1. To identify the potential and performance of rural tourism across various states of India. 2. To classify all states of India into well define groups on rural tourism potential and performance indicator. This study is quite comprehensive in scope as it includes all the states under its ambit. The secondary data pertaining to the study was collected from all the states of the country. D. Hypotheses of the Study Following hypotheses have been formulated and tested: H 0 1: There is no significant difference among three clusters regarding the mean value of Projects Completed. H 0 2: There is no significant difference among three clusters regarding the mean value of Utilization rate. H 0 3: There is no significant difference among three clusters regarding the mean value of Projects Sanctioned. E. Variables and data description The following variables have been used in the study: Utilization rate: This variable measures the performance of states in utilizing the proceeds sanctioned to them for the development of rural tourism. It is simply a ratio of amount sanctioned and amount utilized multiplied by 100. In India the central government through the Ministry of tourism grants money for the development of rural tourism projects to the states to assist them in making rural tourism popular. The grater the utilization rate, greater the efficiency of the state in implementing the rural tourism development projects and vice versa. At the same time it also shows the seriousness of the different state governments in developing rural tourism in their respective states. No. of Rural Tourism Sites Sanctioned: It is the number of rural tourism projects that has been sanctioned by the Ministry of Tourism in the various states of the country. Greater the number of rural tourism sites sanctioned greater the potential for rural tourism in the state and vice versa. Thus it has been used to measure potential of rural tourism in various states included in this study. No. of Rural Tourism Sites Completed: It shows the promptness of the state governments with which they respond to the projects sanctioned by the state. It is an important indicator of the interest of the respective state governments in developing rural tourism in their respective states. All Rights Reserved, IJRMBS

4 International Journal of Research in Management & ISSN : (Online) The data for the purpose of the study have been taken from the various reports, periodicals and publications by the Ministry of tourism of govt. of India as well as state tourism departments. Thus, this study utilizes secondary data for fulfilling the objectives. The data pertaining to the variables have been taken up to March F. Techniques of Analysis Since this is an empirical study, appropriate statistical techniques have been used to analyse the data. The data has been processed using some of the common statistical software namely SPSS and MS Excel. In order to judge the status of the potential and performance of states in promoting rural tourism Cluster analysis has been used. It groups the entire cases into clusters such that each cluster has different attributes but the members inside the cluster have common attributes. One way Analysis of Variance (ANOVA) has been used to test the hypotheses. Furthermore, Post hoc tests have also been used. IV. Analysis and Discussion India is a country of villages which are the center of its culture and heritage. Hence, they can be effectively developed as tourism destinations. Some villages are endowed with magnificent natural resources and hence can also be developed as a hot spot among tourists. The Indian states vary a lot in terms of topography, climate, demographic description, culture and heritage etc. This to a great extent will help them to forge a symbiotic relationship among them. As for instance, Kerala has emerged as a hub for medical tourism, Himachal for adventure tourism, U P for religious and Heritage tourism and so on. Working out on similarly of potential and performance will give the better atmosphere of working and will help in developing rural tourism sites effectively. Hence, in order to classify the entire states into well-defined groups, cluster analysis has been carried out. The cluster analysis have been carried out on the basis of 3 variables utilization rate, number of rural tourism sites sanctioned and number of rural tourism sites completed. Ward s method was used to perform the cluster analysis. The Dendrogram of the cluster analysis has been shown in figure 2. Fig. 2: Dendogram of Cluster Analysis From the diagram it is clear that there are 3 distinct clusters. Cluster one has highest number of states i.e. 13, cluster 2 has 12 cases and cluster 3 has 4 cases in all. The states with their clusters are represented in table number , IJRMBS All Rights Reserved 12

5 ISSN : (Online) International Journal of Research in Management & Table 2: Clusters Membership of States Cluster 1 Cluster 2 Cluster 3 Andhra Pradesh Arunachal Pradesh Bihar Delhi Jharkhand Karnataka Kerala Mizoram Odisha Puducherry Sikkim Tripura Uttar Pradesh Assam Chhattisgarh Gujarat Haryana Himachal Pradesh Madhya Pradesh Maharashtra Manipur Meghalaya Punjab Rajasthan West Bengal Jammu and Kashmir Nagaland Tamil Nadu Uttarakhand Cluster 1 (Medium potential and poor performance states): These states have mean value of projects sanctioned better than cluster 2 but lower than cluster 3. However, the mean value of utilization rate for this cluster is extremely poor and lower than mean value for other two clusters. These states are Andhra Pradesh, Arunachal Pradesh, Bihar, Delhi, Jharkhand, Karnataka, Kerala, Mizoram, Odisha, Puducherry, Sikkim, Tripura and Uttar Pradesh. Cluster 2 (Low potential and High performance states): These states have mean value of projects sanctioned less than cluster 1 and 3 but have good performance in terms of finalizing the projects. but lower than cluster 3. These states are Assam, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Punjab, Rajasthan and West Bengal. Cluster 3 (High potential and High performance states): These states have mean value of projects sanctioned as well as mean value of utilization rate better than both the other two clusters. The number of states in this cluster is only 4 namely Jammu and Kashmir, Nagaland, Tamil Nadu, and Uttarakhand. The descriptive statistics of all the clusters on the three indicators is summarized in table number 3. Projects Completed Utilization Rate Projects Sanctioned Table 3: Descriptive Statistics N Mean Std. Deviation Std. Error 95% Confidence Interval for Mean Lower Bound Upper Bound Total Total Total Min Max The above table reveals that though cluster 3 is the best performer yet it has high variance on the indicator of projects completed. It tells us that the states in this cluster vary significantly on this indicator. However, the variance for projects awarded is also highest. It has lowest variance on terms of utilization rate thereby signifying the fact that all the states in this cluster are efficient. Cluster 1 has highest variance on the indicator of efficiency. In order to test that whether the three clusters vary significantly on the chosen indicators one ANOVA test has been used. The result is shown in table number 4. All Rights Reserved, IJRMBS

6 International Journal of Research in Management & ISSN : (Online) Projects Completed Table 4: ANOVA Test Results Sum of Squares df Mean Square F Sig. Between Groups Within Groups Total Utilization Rate Between Groups Projects Sanctioned Within Groups Total Between Groups Within Groups Total From the table it is absolutely clear that the clusters vary significantly on all the 3 indicators as is evident from the p values. The first hypothesis i.e. There is no significant difference among three clusters regarding the mean value of Projects Completed was rejected. The F statistics was which was significant at 5% level there by leading to the acceptance of alternate hypothesis. Same was with the p value of second (There is no significant difference among three clusters regarding the mean value of Utilization rate) and third (There is no significant difference among three clusters regarding the mean value of Projects Sanctioned) hypotheses were significant at 5% level. Hence both the alternative hypotheses were accepted. On the basis of results it can be said that the variables included in this study for cluster analysis are appropriate and the cluster formation is reasonable. After the rejection of all three null hypothesis, it can be concluded that at least one sample mean differed, but ANOVA test did not specified how. Therefore, post hoc comparison test was run to detect where those differences are. The post hoc test results are displayed in table - 5. Dependent Variable Projects Completed Utilization Rate Projects Sanctioned (I) Ward Method Table 5: Post Hoc Test (Multiple Comparisons) (J) Ward Method Mean Difference (I-J) Std. Error Sig. 95% Confidence Interval Lower Bound Upper Bound * * * * * * * * * * * *. The mean difference is significant at the 0.05 level * The post hoc test is used to compare the means of groups which determines the overall statistically significant differences. The post hoc tests are follow-ups to examine particular differences which seem worthwhile exploring after initial statistically significant results. The post hoc tests will help to determine if particular pairs of values are significantly different from each other. In this study, the first group i.e. project completed, the pair wise comparison was made. The result revealed that the two categories which differed significantly were first vs. third cluster and second vs. third cluster. Same has happened with Utilization Rate group. The difference in the mean score in second groups was due to the difference between first vs. second cluster and first vs. third cluster. In the 2014, IJRMBS All Rights Reserved 14

7 ISSN : (Online) International Journal of Research in Management & last group i.e. projects sanctioned group, the pair wise comparison was made. The result revealed the difference in the mean score, which was due to the difference between first vs. third cluster and second vs. third cluster. V. Findings and Implications for Policy Makers In the backdrop of the problem, i.e., implementation of uniform of code of conduct for bringing up the rural tourism sites as suggested by the planning commission, which is an important requirement for making the tourism policy successful, the need was felt to investigate the objectives of the study so that the success measures can be suggested to the policy makers. The research reveals the key findings as discussed below. This study attempted to investigate the potential and performance of rural tourism in various states and to further classify all states of India into well define groups on rural tourism potential and performance indicator. The states of the country that have completed the rural tourism project can be grouped into 3 distinct groups as per their potential and performance in rural tourism development discussed below. The first category has been named as Medium potential and Poor Performance states. The states in this category have medium potential for rural tourism but the performance of these states is low. These states are Andhra Pradesh, Arunachal Pradesh, Bihar, Delhi, Jharkhand, Karnataka, Kerala, Mizoram, Odisha, Puducherry, Sikkim, Tripura and Uttar Pradesh. On the basis of potential and performance this cluster should follow the uniform approach of less rural project sanctioning. A feasibility analysis of project should be undertaken in advance before taking the decisions. The policy makers should also assess the mood of local residents for the project support before taking project sanctioning decision. A well-defined uniform mechanism should be developed to monitor the progress of the projects in these states. Further policy planners should also focus on suitable human resource development training. The second category has been termed as Low Potential and High Performance states. The categories cover states with low tourism potential but have successfully planned and implemented their rural tourism projects towards completion. These states are Assam, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Punjab, Rajasthan and West Bengal. In order to maintain the performance of these states mentioned in second cluster, the policy planner should focus moderate sanctioning of the rural project. Though the cluster shows the high performance, but due to low potential of the cluster feasibility study of the sites is recommended. However this cluster maintains the high performance, but to maintain its performance in coming time monitoring mechanism should be developed and should focus on moderate monitoring of project implementation. The policy planners should also focus on quality improvement of the project implementation so that this cluster can be projected as the role model cluster while training the human resource of low potential and low performance cluster. Finally the policy developer and implementers should focus on uniform policy implementation mechanism as suggested by steering committee on tourism for the eleventh five year plan. The third cluster is grouped on two parameter and is named as High potential and high performance cluster. There are only four states in this category namely, Jammu and Kashmir, Nagaland, Tamil Nadu, and Uttarakhand. The Union Ministry of Tourism (2014) declared Sikkim as the best State in terms of implementation of policies described for the development of rural tourism project on the basis of development of few attractive rural tourism sites. On the basis of cluster s high potential and high performance characteristic, the policy planners should sanction higher number of rural projects. On the basis of performance, of this cluster technology based utilization mode is suggested. The policy planner should take the initiatives to reduce the time period of rural tourism project completion in this cluster which will help these states to make the rural tourism sites operationalized faster and will help the states in earning the revenue. The policy planner should consider the successful projects as role model for the motivation of low performing cluster. The cluster will grow fast, if the policy planner focuses on the suggestion of steering committee on tourism for the eleventh five year plan for the uniform policy implementation. The study also researched the 3 indicators, i.e., Projects Sanctioned, Utilization rate, and Projects Completed. The result reveals the significant difference among three categories of states. On the basis of the results, it can be proposed to the policy planners that, they should follow the distinct and uniform approach of project sanctioning, fund utilization mechanism and implementation mechanism for project completion. Further, suggested to undertake a high level study to reveal the factors that are leading to difference in performance. The success of Indian rural tourism project depends on few key issues. They are support of local residents, continuous research on primary data to study the various issues of project completion and making the site successful, continuous monitoring, continuous training and uniform code of conduct. From the foregoing analysis, it is clear that if sites are selected with care, on the basis of potential and core competency, and the project implementation focuses as much on the software aspects of human development along with the hardware of capacity building and infrastructure development, there is every reason to anticipate a positive outcome. VI. Conclusion Tourism is now being considered as an important sector with an ability to entertain tourists through skill, art, heritage, nature, and culture. In past decades, the social, economic and metal status of people all over the world has passed through transformation. The change in travel and recreation taste of the populace has developed the new arrangement of tourism. Rural tourism is one of the few forms of new category of tourism, which has enhanced capability to deliver standard of living to rural people. To provide the employment and means of earning to rural people, the government of India initiated several tourism project considering the potency, vibrancy and vividness of rural areas but very few of them could come up and remaining failed. The results of the research revealed that, tourism sites of different states significantly varied in potential and performance. Considering the potential and performance variation of the states three homogeneous clusters were formed and was recommended to treat different clusters through dissimilar uniform code of conduct at the time of project sanctioning, implementing, monitoring and controlling. The study findings recommended dissimilar uniform strategy to different clusters followed by the more concrete steps to laggard i.e., poor potential and poor performance cluster. All Rights Reserved, IJRMBS

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