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Kerala tourism set to grow by 20 per cent: CII

Written by: Staff

Kochi, May 14: The inflow of tourists to Kerala is expected to grow by nearly 25 per cent while the industry revenue is set to increase by 15 to 20 per cent during April-September this year, thanks to a growing corporate demand and growth of Ayurvedic tourism, says the CII.

According to a CII survey, the foreign exchange earned by Kerala's tourism industry increased by 20 per cent with the inflow of tourists going up by 15 to 20 per cent in October 2005-March 2006. The occupancy rate in hotels and resorts had shown a moderate increase and the profit margins increased substantially by raising the tariffs in hotels and resorts.

However, the CII cautioned that Kerala's tourism industry was facing a very stiff competition from Kashmir and some other foreign destinations, to which the Indian tourists were getting attracted due to reduced prices of air tickets.

Lack of direct flights to Kerala reduced the inflow of foreign tourists, it added.

The CII survey covered the performance of the top five sectors of the Southern Region states during October 2005 to March 2006 and provided an outlook for the first six months of the fiscal year 2006-07 and identified their issues and concerns.

Besides tourism, the other sectors covered in Kerala included chemicals and fertilisers, coir, rubber and food processing. All these sectors also had registered significant growth during the last half of the previous fiscal, as per the 'Business Outlook Survey' conducted by the Confederation of Indian Industry (CII) - Southern Region.

The CII said that Kerala's chemical industry staged an ''impressive performance'' during October 2005 and March 2006, by increasing its production and sales by 20 to 25 per cent and 15 to 20 per cent respectively.

It said that owing to good monsoon and demand, the chemical and fertiliser industry had increased its production by 25 per cent and the sales by 15 to 20 per cent. The exports too had increased by five to ten per cent.

The industry was expecting a high rate of growth in production again in the first six months of the fiscal year 2006-07 and a moderate rate of increase in sales, exports and demand, it added.

The coir production and sales in Kerala, which is the largest producer of coconut, contributing as much as 45 per cent of the country's total production, experienced a growth in production of 10 per cent and that of sales by five per cent.

The export too increased by 10 per cent portraying the impressive global demand for coir products. The industry is expected to perform well in the first half of the current fiscal year with the projected growth of production and sales of 5 to ten per cent.

However, the industry lacked modernisation and there was only a limited availability of the credit to it. There as a need for the Government to facilitate proper flow of credit to the Coir industry, the CII said. Accounting for 92 per cent of the total production of natural rubber in India, Kerala registered a growth of five to ten per cent in the processed rubber sales during October 2005-March 2006.

The production had increased, since this was the peak season for tapping rubber and also due to the growing demand of the user industry.

The industry was optimistic about the performance of the rubber sector in the first half of this fiscal, with production expected to grow by ten to 15 per cent and sales by five per cent. Exports are expected to grow by ten to 15 per cent, it added.

However, the industry faces immense transportation problem due to poor quality roads and wants the Government to reduce duties and taxes, the CII said.

Stating that food processing had tremendous potential in Kerala, the CII said that Kerala was next only to Maharashtra and Tamil Nadu in the number of licensed food processing units. The food processing industry had performed marginally better during October 2005-March 2006.

While the production and sales had risen by around five per cent, the inventory level had been reduced by 25 per cent due to the festive season.

Stating that the outlook for the sector for the coming months was quite promising, it said that production and sales were expected to grow by ten to 15 per cent and the export and market demand by five to 10 per cent.

However, the lack of proper equipment was hurting the growth of the sector. Also Kerala does not produce molasses and depends on heavy-duty imports from Maharashtra and foreign countries including Iran and Pakistan. The exchange rate fluctuations and abrupt changes in the international market also affect the industry.

The main demands of the industry were the removal of Fringe Benefit Tax (FBT), service tax and counterveiling duties, the survey added.


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