Vantage point

Monday, May 12, 2003

Yazad has mooted an idea to start a blog by Indian Libertarians where we will post our take on current Indian issues. Ravikiran, Dipayan and a few others will be involved in it. I feel really honoured to be asked by Yazad to be one of the contributors, especially since I am not a complete libertarian yet in every aspect...and I doubt if I will be in the near future. I don't know when the blog will start, but I shall be able to post regularly only after Mid June when I am back in IIML with a 24 hr net connection. Meanwhile, I thought I would write a "pilot post" to see if I have it in me to write such stuff.


I was reading the interview of Jagmohan in the Hindustan Times this weekend(will try to find the link). Jagmohan is a controversial fellow known to have a penchant for changing things, and for the better, most believe. He is currently the Union Minister for Tourism.

Now tourism is a sector which has languished in mediocrity in India. For me that really represents the big letdown we have been for our own selves, because if there is one things that India has it easy in, it is tourism. We have snowclad peaks, deserts, lakes, beaches, backwaters, historic monuments, caves, name it! I dare someone to come up with one type of tourist spot that India does not have.

And yet, we suck at it. the reason, like most other failures in India, is the government control. The bureaucracy, the ASI, everyone have failed this gold mine. If we had Indian bureaucrats in the South African gold mines, they would think up of some way to not mine the gold, I am sure.

We could go on and on about what is being done wrong. But then just digging up mistakes, clucking our tongues, rolling our eyes and saying "Iss desh ka kuch nahi ho sakta" is not going to help. So I propose an alternative plan of action, a libertarian approach to tourism...libertourism if you will.

What the government can do is make a list of all the places it considers heritage sites or tourist locations. Places like the Qutub Minar, Taj Mahal, Fatehpur Sikri, Ajanta Ellora, Elephanta etc. Then call for tenders from private parties to lease each of these places out to them, for a period of five or ten years.

These private players will own the tourist spot for the period. They will be given a free hand to renovate the place, revamp it etc, and in exchange, they can keep the revenue they make. Of course, to make sure that no fly-by-night operator type parties come and exploit these places, there should be periodic checks by the tourism ministry. For example if tomorrow a private player realises just as his lease is ending that he has not broken even, and so decides to sell some marble from the Taj Mahal (a la Brits), he should not be able to do so.

Recently the government announced that it will allow islands in the andaman Nicobar chain to be leased out. If these islands and the Lakshdweeps are run by private players, I am sure they can give the Seychelles a run for their money.

The way things stand right now, no one has any incentive to work extra hard for improving the tourism scene. Everyone gets fixed salaries, whether they work or not. The ASI is one confused body, unable to do anything useful. With libertourism, the ASI can be pruned and made a purely consultative body. Its "expertise" will be utilised by the private companies that have leased the spots. Competition for the ASI should be allowed to spring up as well.

The private players will promote their locales aggressively in the Indian as well as the foreign market. They will keep the places clean and well maintained, and the staff there will also be helpful and amiable. All the income will be taxable of course. So this means that the government will make more money than it does. For instance, if the Taj Mahal earns the government 10 million per year (hypothetically speaking), other ill-maintained places like the Elephanta caves earn it only 100 thousand. With privatisation, even though one may argue that the Taj's revenues may not grow significantly, Elephanta's revenues will surely jump will those of hundreds of other tourist spots. I am sure that even at a lowly 30% tax rate, the government will rake in many times the moolah it already does from tourism.

The government can slash its tourism payroll, and sit happy while the money jingles in.

That privatisation helps tourism can be seen from the example of Rajasthan. Many(or most??) of the palaces there are still owned by the families who ruled there previously. So the management is not government controlled. And anybody who has been to Rajasthan will know the difference in the condition of the spots there and those all around India. Now imagine, something similar, only on a bigger scale. Companies (not families) which are solely into managing such tourist spots. They will be able to publicise better and manage things better.

The way i see it, libertourism is a win win scenario. It won't just make the cake bigger, it will convert the cake into a full fledged bakery. Whatever pitfalls one envisages can be prevented by having a slim regulatory body with police-like powers so that they can not interfere with the day-to-day running but can check any wrongdoings by the private players.

So Mr Jagmohan, want to go for Libertourism?