Delhi’s pollution and Goa’s tragedy point to a ‘soft state’: For Indian tourism to boom, fix this first

In his voluminous tome, The Asian Drama, Gunnar Myrdal introduced the concept of the ‘soft state.’ He was really writing about South Asia, especially India, with barely any mention of the ‘miracle economies’ of East Asia.

He characterized the Indian state as a ‘soft state,’ implying a government with limited capacity, unable to unwind a gridlock of competing interests that sucked up and dissipated scarce resources. This pre-empted the high growth necessary for reducing widespread poverty.

India is now a fast-growing economy and poverty is much reduced, but regulatory failure to clean up the air in Delhi under successive governments suggests that the ‘soft state’ still prevails.

Of late, the soft state has also been very visible in the awful tragedy in Arpora, Goa, where a fire at an unauthorized night club, Birch by Romeo Lane, killed 21 persons. The blaze was set off by fireworks in a closed structure on a sandbank in a water body without adequate exits.

An order to demolish the structure issued months earlier was ignored with impunity, as were a range of other required clearances. The night club was operating without permits on the basis of just an excise licence.

As reported, even this licence was issued on a forged No Objection Certificate from a local health officer. The club’s owners, the Luthra brothers, and their associates had reportedly sliced through compliance requirements like a knife through butter, using a combination of bribery and browbeating.

They were backed, allegedly, by powerful politicians and bureaucrats.

The Arpora case is unfortunately not the only instance of regulatory failure that impacts tourism in Goa. Several other unauthorized tourist establishments are being closed in the wake of that disaster.

Unsafe facilities, poor quality services and high costs are driving tourists away to destinations in Thailand, Sri Lanka, Croatia, Georgia and other countries where services are better and costs lower. All this is killing the goose that has laid Goa’s golden eggs for decades.

Goa is a highly visible illustration of how service providers and the government have failed tourism. However, it is symptomatic of a much wider malaise that ails tourism in India.

In a Mint column last year (28 June 2024), I had pointed out that India was ranked 39th in a World Economic Forum Global Tourism ranking, though it is the world’s fourth largest economy. Tourism accounts for a mere 0.9% of GDP, down from a pre-pandemic peak of 2.7%.

In comparison, tourism accounts for 20% of GDP in a small country like Croatia (population: 4 million) and as much as 11% of GDP in China, the world’s second largest economy, at the other end of the spectrum.

In a recent Hindustan Times article (19 December 2025), Amitabh Kant points out that a four-star hotel room in India costs ₹12,000-15,000 per night, while it costs half or less in Phuket or Danang.

India’s coastal length is thrice that of Thailand and its national park area is twice that of Kenya’s, but it has fewer tourist destinations with decent accommodation.

Kant’s plea is to rationalize our Kafkaesque regulatory framework. It not only deters investment, but also generates the rent-seeking opportunities that lead to disasters like Arpora.

It is very unfortunate that tourism has been so neglected, since it is a highly employment- intensive sector with strong multiplier effects. The sector accounts for only 0.9% of India’s GDP, but its employment share is much higher at 5.5%, according to recent Periodic Labour Force Survey data.

Thus, if its GDP share could be raised back to its pre-pandemic level of 2.7% in, say, the next three years, direct and indirect employment would go up from 76 million to 95 million. If the share could be doubled to 5.4% in another three years, the consequent employment would go up to 195 million.

But setting these goals, even if feasible, would require a mindset change. Bureaucrats are not the best candidates for such out-of-the-box thinking, though civil-service officers like Kant have been exceptions.

Politicians too may not be sufficiently induced by the potential employment impact, since organic job generation seems to have limited electoral mileage.

However, what is important here is not high-end tourism, but low-budget tourism, especially the religious kind that accounts for the bulk of India’s tourism revenue.

These are tourists who travel by second or third class compartments in trains, look for rooms at ₹1,000-2,000 per night and meals for ₹150-200 per head. Most Indians are devout.

The huge number of religious tourists who travel to destinations like Hardwar, Vaishno Devi or Tirupati and the hardships they are prepared to bear in the process are remarkable.

Equally popular destinations of minority faiths include Ajmer Sharif Dargah, the Bodh Gaya-Rajgir-Nalanda Buddhist circuit or the Basilica of Bom Jesus in Old Goa.

Providing cheap but safe travel facilities, cheap but clean hotels and budget meals for such religious tourists on a vastly expanded and improved scale could interest political leaders. The revenue and employment impact of such a mindset change would be phenomenal.

These are the author’s personal views.

The author is chairman, Centre for Development Studies.