Perspectives from ISB

Meghalaya is often referred to as the “Abode of Clouds.” It is derived from the Sanskrit words Megha, meaning “cloud,” and ālaya, meaning “abode.” Meghalaya is one of the smallest states in India with a geographical area of 22,429 sq. km and a forest cover of 9,496 km². The state is surrounded in the East and North by the state of Assam and in the West and South by Bangladesh. Known for its lush greenery, crystal-clear rivers, tumbling waterfalls, grassy hills, beautiful living root bridges and caves, it is a paradise for both nature lovers and adventure seekers. The state’s natural assets, ethnic variety, and social values add a lot of promise to the tourism sector in the state.

Meghalaya as a Tourist Destination

The potential for Meghalaya to become a major tourist destination is immense. Tourism holds a great position in contributing to the overall economy of Meghalaya for decades. It plays an active role in the economic development of the state, this makes it a key area of interest for policymakers. Numbers suggest that over 9.3 lakh domestic tourists and around 78,000 foreign tourists visited the State in 2023, which is a significant increase in numbers as compared to 2021. With the boost of tourism in the State, the youth have better employment opportunities as tour operators, tour guides, hotel employees, transportation providers, among others.

Due to the huge growth of tourism in the state, better roads and public services have been developed, which has raised the locals’ standard of living and improved accessibility. Efforts focused on tourism to protect cultural treasures in the region have motivated residents to uphold traditions and culture, enhancing the bond within the community.

While the growth of tourism has brought benefits to the state, it is also necessary to address the cons and challenges that should be tackled to ensure sustainable growth. With the surge of tourists, issues like influx of tourists, pollution and environmental degradation may arise. Additionally, it is critical to also acknowledge the challenges faced by a segment of the local business community. Local taxi operators are worried about the growing number of tourists, as they face tough competition from outer-state vehicles serving the same customers.

Locals Voice Concern
Concerns regarding the considerable number of tourist vehicles arriving in the state of Meghalaya from surrounding states, particularly Assam, have been voiced by the All-Khasi Meghalaya Tourist Taxi Association (AKMTA). A visit to the popular tourist spots in Meghalaya reveals that most of the parking spots and viewpoints are taken up by Assam tourist vehicles. Local tourist vehicles are comparatively less, even though the Meghalaya government has tried to push their case by initiating the Prime Tourism Vehicle Scheme. The scheme aims to offer luxurious travel options with well-trained drivers, while also prioritising safety to create unforgettable experiences for visitors. Local taxi drivers increasingly fear that outside competition may cause them to lose money

In the tourism sector, local drivers are essential, often performing functions beyond simple transportation. They are unofficial ambassadors of Meghalaya’s customs, providing visitors with unique insights and experiences.

Way Forward

Addressing the discussion regarding the issues faced by the local taxi drivers in Meghalaya, let us explore viable solutions to this problem. The AKMTA suggested that “the state government identifies designated locations like Inter State Bus Terminus (ISBT) as a stop location for tourist vehicles coming from outside the state and from such locations, local tourist vehicles can ferry tourists to various tourist spots in the state.’’ Considering this recommendation, an arrangement or plan for designated routes and specific drop-off points could be put in place.

Another  solution or approach that can be introduced to help curb these issues is the implementation of an outer-state tourist vehicle tax, similar to the one recently updated by the state of Himachal Pradesh , this tax could produce revenue used to:

  • Aid and support local taxi drivers: A welfare fund for local taxi drivers might be established with a portion of the tax revenue. This fund may provide possibilities for skill development, financial support during challenging times, or even financing for vehicle upgradation.
  • Infrastructure development: Funds could also be used to develop and improve road infrastructure, particularly in well-visited tourist spots. This would not just help relief traffic jams but also bring an advantage to all individuals using the road, such as residents and visitors.
  • Awareness of sustainable tourism: The revenue could also be used to encourage and spread awareness about sustainable tourism practices. This may include educating and informing travellers on the importance of sustainability, utilising services from the area and honouring the local culture and traditions.

Learnings from Himachal Pradesh
The tourist vehicle tax that was introduced in Himachal Pradesh in September 2023 provides us with some useful lessons. Before it wasupdated, the tax placed substantial fees on tourist vehicles from other states to the tune of INR 3,000 – INR 6,000 per day  for four-wheelers  based on its  seating capacity. However this led toa severe criticism and backlash as  tour operators suffered financially, affecting tour packages, and possibly deterring tourists. Similarly, there was a decline in the number of tourists owing to high taxes. The Hotels and Restaurant Association, Dharamshala in their letter to the then chief minister stated that “the hotel occupancy has dropped as travel operators are ignoring Himachal Pradesh and sending tourist groups to other places like Uttarakhand and Kashmir.” This was believed to have been caused by the high tax rate. This shift in tourist flow raised concerns about a potential decline in tourist arrivals and its negative impact on local businesses.

In order to address the criticism and possible decrease in tourism, the Himachal Pradesh government made changes to their policy on tourist vehicle taxes. The State Government decided to reduce the Special Road Tax (SRT) on tourist/commercial vehicles entering the state by up to 70 per cent.

Valuable Lessons Learnt

To prevent the drawbacks that were faced initially by Himachal Pradesh, Meghalaya can consider a more feasible tax structure based on Himachal Pradesh’s experience. Here are some possibilities:

  • Decreased daily rates: Meghalaya may consider a daily tax of between Rs. 500 and Rs. 1,500 for outer state tourist vehicles, rather than a range of Rs. 3,000 to Rs. 6,000. This is consistent with the revised rates that Himachal Pradesh adopted in response to criticism from the industry.
  • Tiered System: Vehicles could be classified into tiers based on how many passengers they can carry, with each tier having a different tax rate. This will guarantee equity for smaller vehicles that have fewer tourists on board.
  • Exclusions for brief visits: There could be an exemption on vehicles staying less than 24 hours or offering a discounted rate to encourage shorter sightseeing trips.

In Conclusion

With rapid growth in its tourism sector, Meghalaya must find a way to promote economic development and protect the well-being of its residents. The suggested measures and solutions, such as implementing a regulated tax on tourist vehicles coming into the state and setting up designated drop off points, aim to better the local infrastructure and assist the local taxi drivers. By introducing feasible tax rates, the government can generate money without negatively affecting the tourism industry, leading to success for both tourists and local businesses. Some of the income generated can be allocated to a welfare fund designed for the benefit of the local taxi drivers, providing them monetary assistance, chances for improving their skills, and grants for upgrading their vehicles to environmentally friendly models. This does not only address their current financial issues, but also prepares them for future obstacles.

Also, assigning stops for tourist vehicles can guide tourists towards using local taxi services for travel within the state. This guarantees that local drivers continue to play a key role in the tourism industry, giving them consistent opportunities for income and the ability to demonstrate their extensive understanding of the area, ultimately improving the overall experience for tourists.

Author’s Bio: Matthan Vincent Sawian is a fellow of the Meghalaya Legislative Research Fellowship (MLRF) instituted by the Bharti Institute of Public Policy, Indian School of Business, in collaboration with the Meghalaya Institute of Governance (MIG). He holds a bachelor’s degree in Sociology from St. Edmund’s College, Shillong, and a Master’s degree in Tourism and Administration from Amity University, Kolkata. With a passion for public policy in the tourism sector, Matthan’s areas of interest are sustainable tourism, community development, and regional socio-economic growth.

DISCLAIMER : The views expressed in this blog/article are author’s personal.

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