A Study on Causal Relationship Between Tourism Receipts and Economic Growth in India

Abstract

Tourism has been a major social phenomenon of the societies all along. It is motivated by the natural urge of every human being for new experience, adventure, education and entertainment. The motivations for tourism also include social, religious and business interests. The increase of education has fostereda desire to know more about different parts of the globe. The basic humanthirst for new experience and knowledge has become stronger, as communication barriers are gettingovercome by technological advances. Progresses in air transport and development oftourist facilitieshave encouraged people to venture out to the foreign lands.This study used annual data for theperiod from 1990-91 to 2014-15. Data for this study have been collected from the sources like, Annual Statistical Report of India Tourism Development Authority, World Investment Reports 1990-2016, Handbook of Statistics on Indian Economy. Variables taken for the study are Gross DomesticProduct (GDP) to measure the value of economic growth and tourism receipts (TR) as proxy oftourism activity.The evidence, however suggests long-run causality from tourism receipts towardseconomic growth. It means tourism receipts are one of the contributor in economic growth. In general, the study appears to support and confirm tourism led-growth (TLG) hypothesis in India