- I -

MAP : LAKSHADWEEP ARCHEPELAGO

- II -

ACRONYMS AND ABBREVIATIONS

AIBR Agatti Island Beach Resort

BIR Bangaram Beach Resort

AGM Assistant General Manager

CRZ Coastal Resource Zone

DGM Deputy General Manager

DOT Department of Tourism

EIA Environmental Impact Assessment

GM General Manager

GNP Gross National Product

Ha Hectare

HRM Human Resource Management

LCMF Lakshadweep Co-operative and Marketing Federation

LDCL Lakshadweep Development Corporation Limited

LTDCL Lakshadweep Tourism Development Corporation Limited

MD Managing Director

MHA Ministry of Home Affairs

MP Member of Parliament

MPAs Marine Protected Areas

MRR Management Research Report

NES National Eco-tourism Strategy

NGO Non Governmental Organization

Rs Rupees

SPORTS Society for Promotion of Recreational Tourism and Sports

S-O Strength-Opportunity

S-W Strength-Weakness

SWOT Strength-Weakness-Opportunity-Threat

SWM Solid Waste Management

ST Scheduled Tribe

T-O Threat-Opportunity

T-W Threat-Weakness

UNDP United Nations Development Program

UNEP United Nations Environment Program

WTO World Tourism Organization

WWF World Wide Fund for Nature (World Wildlife Fund)

UOI Union of India

USD United State Dollar

UT Union Territory

UDC Upper Divisional Clerk

WPR Work Participation Rate

Note: 1 US $= Rs. 43 as on 23rd May 2008.

- III -

TABLE OF CONTENTS

MAP OF THE LAKSHADWEEP I

ACRONYMS AND ABBREVIATIONS II

LIST OF TABLES V

LIST OF FIGURES V

ACKNOWLEDGEMENT VII

EXECUTIVE SUMMARY VIII

CHAPTER 1

INTRODUCTION 1

1.1 Background and Rationale 1

1.2 Objective and Scope 2

1.3 Research Methodology 3

1.4 Limitations of the Study 4

CHAPTER 2

LAKSHADWEEP ARCHIEPELAGO 6

2.1 Location and Area 6

2.2 History 7

2.3 Socio-economic Profile 8

2.4 Political and Administrative Set-up 13

2.5 Eco-system 16

2.6 Transport-Air and Sea 22

CHAPTER 3

THE TOURISM SECTOR 24

3.1 Sustainable Tourism 25

3.2 Type of Tourists and Facilities 25

3.3 International Legal Framework 27

- IV -

3.4 National Policy and Laws. 30

3.5 Corals in India 33

3.6 Major Eco- tourism Destinations in South-western India 34

CHAPTER 4

ORGANIZATION OF TOURISM IN LAKSHADWEEP

4.1 Department of Tourism 38

4.2 Tourism Accommodations 38

4.3 Tourism Products- Tour Packages 42

4.4 Role of Co-operative Societies in Tourism 45

4.5 Linkage with National Tourism Organizations 49

4.6 XIth Development Plan (2007-2012) 50

CHAPTER 5

PERFORMANCE AND FUTURE OF TOURISM SECTOR

5.1 Performance 53

5.2 Tourist Arrivals 53

5.3 Constraints to Tourism Development 54

5.4 Analysis of Organizational Performance 59

5.5 Organizational Strengths and Weaknesses of DOT 68

5.6 Scope for Tourism Organization 71

CHAPTER 6

STRATEGIES FOR SUSTAINABLE TOURISM IN LAKSHADWEEP

6.1 General 75

6.2 Means-end Relationship for Tourism Sector 76

6.3 Strategic Options 79

6.4 Implementation Design for Sustainability 82

6.5 High Value and Low Volume Strategy 102

- V -

CHAPTER 7

IMPLEMENTATION PLAN

7.1 Importance 103

7.2 Managing Contradictions 103

7.3 Implementation of Strategies for XIth Plan 106

CHAPTER 8

CONCLUSION AND RECOMMENDATIONS 112

BIBLIOGRAPHY 114

ANNEXURES 115

LIST OF TABLES

3.1 Matrix of Typology Tourists and Choices of Facilities 26

4.1 Accommodations on Islands in Lakshadweep 39

4.2 Proposed Financial Outlay for XIth Plan 50

5.1 Tourist arrivals 54

5.2 Estimated Revenue from Lease/Rent to DOT 62

5.3 The Income and Expenditure Pattern of SPORTS 63

5.4 Estimated Income Statement of BIR 64

6.1 SWOT Matrix of Tourism Organization of Lakshadweep 80

7.1 Design and Monitoring Framework for Tourism Sector 108

7.2 Proposed Financial for Implementation of Strategies 111

LIST OF FIGURES

2.1 Map of the Lakshadweep 6

2.2 Demography of Lakshadweep 9

2.3 Coconut Harvested 11

2.4 Major Species of Fish landing in Lakshadweep 12

- VI -

2.5 Politico-Administrative Set-up 13

4.1 Agatti Beach Cottage 40

4.2 Bangaram Beach Resorts 41

5.1 Tourists Arrival Graphs 51

5.2 Problem Tree –Sustainable Development of Tourism in the

Lakshadweep 58

6.1 Objective Tree –Objective Analysis for Sustainable Development

Tourism in Lakshadweep 78

6.2 Capability and Position Interaction in Lakshadweep Tourism 88

6.3 Competitive Advantage Based Strategy through

Differentiation of Products 100

6.4 7-S Model 101

7.1 Factors in Implementation Plan of Strategy of Tourism in

Lakshadweep 104

Copy Right Reserved

- VII -

ACKNOWLEDGEMENT

I would like to express my gratitude to the Government of India for deputing me to study the

course Master in Development Management at the Asian Institute of Management (AIM),

Manila. I am also grateful to Honorable Administrator Mr B.V. Selvaraj and Mr. A. K. Wasnik,

Secretary, Lakshadweep Administration for encouraging me to take this eleven-month training

program. I will always be grateful to Centre for Development Management of the AIM.

My special thanks to my primary advisor Prof. Mario Antonio G. Lopez, who combined his

incisive knowledge of the tourism industry with his insights as an academician of repute, to

guide me in this Management Research Report. My second advisor, Prof. Nihal Amerasinghe,

was tough on me, but his painstaking efforts and constant drive to help me improve this report

greatly contributed to the final result. I am also thankful to Prof. Soledad A. Hernando, Course

Director, and Prof. Benjamin C. Bagadion for advising and guiding me in the preparation of this

MRR. My gratitude is also to third panelist, Mr.Tsewang Namgyal for his knowledge and

practical experience of managing government reforms.

My colleagues at the Lakshadweep Administration provided me relevant data and insights as

to existing functional arrangements at the Department of Tourism, Lakshadweep. I thank them

for their timely and useful cooperation for this research.

My wife Kamlesh Meena and my son Navdeep have been my source of inspiration and love,

caring for me all the way from Delhi. They could not join me as my son is studying in Fourth

Standard at Delhi. But they did not miss calling me, even for a single day and reminded me to

study.

I would also like to acknowledge the encouragement of my relatives, friends, MDM

batchmates and, especially, my younger brother Jaisingh.

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EXECUTIVE SUMMARY

The Lakshadweep is an archipelago in the Arabian Sea, a distance of 220 to 440 kms

from the coastal city of Cochin in the Kerala State of India. It has considerable potential to attract

high-class tourists because of its geographic location in the Global Eco-region called

Lakshadweep-Chagos-Maldives. The National Tourism Policy-2002 has also advised the tourism

industry to position India as a ‘Global Brand’.

Tourism is a priority sector for the sustainable development of Lakshadweep. The XIth

Plan (2007-2012) under implementation has a proposed outlay of Rs 7539.839 million for

tourism. Tourism growth in the Lakshadweep was 2-3 percent until 2004, lower than the

projected 7 to 9 percent due to insufficient infrastructure. The launch of the Star Cruise ship in

2006-2007 resulted to the influx of 21,522 tourists in Lakshadweep, whose carrying capacity was

a mere 8,000-10,000 tourists per year. It is therefore possible that unplanned introductions by

any development like Star Cruises may damage the ecofragile islands measuring 0.45 to 4.5

square kilometers.

That total bed capacity be raised from 184 to 675 in all inhabited and uninhabited islands,

the individual numbers to be determined according to the carrying capacity of each island, has

been suggested. Expansion of tourism to all inhabited islands and the uninhabited islands of

Cheriam and Thinkara should be taken up in the implementation of the XIth plan using the

pattern of the Bangaram Development Model. Star Cruise operations should promote the sale of

local handicrafts, coconut and fish products in the inhabited islands. The small, sensitive island

rich in marine life and beautiful beaches should be differentiating considerations allowing for

high prices for water sports and accommodations among such segments as rest seekers, nature

lovers, rich cosmopolitans, family-oriented sun and sea-loving tourists.

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Apart from the four ships of the Department of Shipping, the Department of Tourism of

Lakshadweep has acquired three high-speed vessels and placed an order for the acquisition of

two more ships. One helicopter is available for interisland services.

Ship-based tour packages are available: the Coral Reef Package, the Marine Wealth

Awareness Program, the Palm Package, Taratashi, the Weekend Package, and the Scuba Diving

Package. Unique and distinct in the region, they should also be differentiated to attract high

prices, except for the Coral Reef Packages and the Weekend Packages which are for general

tourists like backpackers and students/youth. High value, low volume tourism should be adopted

for sustainable development.

It is proposed that the competitive advantage strategy market unique products to gain

high value by maintaining the gap vis-à-vis other major regional domestic tourist destinations. A

holistic approach is possible through the integration of the tourism sector with transport and

ecosystem for the effective utilization of resources.

It is proposed to incorporate a corporate body, namely, Lakshadweep Tourism

Development Corporation Limited (LTDCL) that would merge SPORTS and tourism assets from

Lakshadweep Development Corporation Limited to achieve economies of scale. Modern

technology for waste management and training of staff to improve distinct skills for the

differentiation of products and the preservation of biodiversity are essential.

LTDCL should be able to manage resources to obtain high returns to society for the

sustainable development of tourism in the Lakshadweep, thereby reducing poverty and

unemployment and improving the quality of life of the native people.

- 1 -

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND AND RATIONALE

The Union of India (UOI) comprises 28 states classified as semi federal units and 7 Union

Territories (UT). An administrator of the UOI directly administers these UTs. Compared to the

mainlanders, the people of Lakshadweep, which is one of the smallest UT of the Union of India

in the Arabian Sea, are poor. Twenty-seven percent of its population lives below the poverty line.

They rely on government for additional livelihood opportunities because coconut farming and

fishing, the main occupations in the territory, cannot adequately provide for their survival.

During the period 2001-2002, coconut production was estimated at 53.1 million nuts, while fish

landed was estimated at 12,800 tons, effectively engaging 7,828 fishermen.1In 2004, Per the 61st

round of the National Sample Survey (NSS) the criterion used for poverty line was monthly per

capita consumption expenditure, with figures below Rs. 356.35 for the rural areas and Rs. 538.60

for the urban areas classified as below poverty line.

Through advanced planning, the government ensures the supply of all essential

commodities from the mainland to the people of Lakshadweep, an undertaking that is

particularly difficult during the rainy season from May to October. But, even then, the poor

people do not have sufficient income to buy these commodities, significant government subsidy

notwithstanding. Meanwhile, the development of tourism is expected to further increase the

demand for all items, thereby necessitating additional efforts and planning to meet the

requirements of the tourism sector. In these planning efforts, the very low inflow of tourists from

1 Lakshadweep official website-home page-http://www.Lakshadweep.nic.in

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June to September due to the uncertainty of interisland air and sea transport from the mainland to

Lakshadweep should be borne in mind.

In 2002 the Government of India launched its National Tourism Policy while for its part,

the Lakshadweep administration had not yet framed a policy for tourism, despite the XIth Plan’s

highlighting the need for such policy. Just like the other places in India, the territory did not

employ a holistic approach in the formulation of its strategy for the development of tourism,

which is crucial given that each territory, particularly Lakshadweep, exhibits unique socio-

economic and environment constraints.

Similarly, ways must be found to make society self-sufficient and to improve the quality

of lives through employment generation. Lakshadweep, in particular, has at least 12,700

unemployed educated youths. Thus far, government has invested heavily in infrastructure,

especially in sea transport and communications, in an effort to enhance contact with the

mainland and explore new avenues for reducing unemployment in this Union Territory. Keeping

in mind the National and International Laws of Coastal Management and Ecotourism, the

Government of Lakshadweep has realized how the tourism sector can change the life of the

people of Lakshadweep through the successful employment of large numbers of people and the

generation of revenue. Tourism being an emerging Industry in Lakshadweep, it needs to be

planned and organized for it to flourish without affecting the ecology of the area.

All policy issues and geographical and environmental constraints should be considered

for the sustainable development of the sector, with proper linkages to other sectors of the

economy established. Doing so will ensure the creation of an appropriate strategy for the

development of Lakshadweep.

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1.2 OBJECTIVE AND SCOPE

This Management Research Report (MRR) has prepared a strategy for the sustainable

development of tourism in Lakshadweep Islands, considering the available resources and

associating the local people in tourism activities to improve the overall economy of the Union

Territory of Lakshadweep.

It is evident that the Department of Tourism of Lakshadweep and its agencies can be

strengthened to improve their effective utilization of resources for the development of tourism

through an appropriate strategy. The strategy developed under this study would be useful to the

government of Lakshadweep for the sustainable development of its tourism sector.

There is a lot of scope to study in such circumstances, given that tourism is an emerging

industry in the territory that hopes to help eliminate poverty. This study will focus on the

development of tourism in association with the native population to whom it would provide

employment and make self-sufficient without affecting the ecology of the area, while

simultaneously fulfilling the social objectives of the Government of India. The study would also

focus on the likely environmental and social implications of the development of tourism and its

contribution to the economy of Lakshadweep.

The social structure, religion, customs, the eco fragile nature of the Islands, the scarcity

of land, limited opportunities, and related national and international laws would be the limiting

boundaries in the study and preparation of the strategy.

1.3 RESEARCH METHODOLOGY

This MRR focuses on the internal and the external factors that affect the biodiversity of the

area. It will explore opportunities and the ways and means to counter threats to the tourism sector

in Lakshadweep. Data has been gathered from various sources such as related studies on the

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national and international levels, the Internet, books, government reports, etc., to come up with a

doable strategy. The following tools were employed to obtain the necessary information and

relevant data for this study:

• Prior to joining the MDM course, the author was a registrar of the Co-operative Societies of

Lakshadweep, a stint that provided him with insights that constitute meaningful inputs to this

study, like direct observation method would. Further, given that the official mentor for this

study is the Secretary of the Department of Tourism (DOT), Lakshadweep, the Secretary

issued instructions to concerned government officials to provide information to the author for

this study. The Government is, after all, currently exerting sincere efforts to develop the

tourism sector for the creation of a self-reliant economy in Lakshadweep.

• Secondary data were obtained from relevant records and reports of government, in the public

library and the Internet. The Internet has proved very useful in accessing information relating

to the Coral Islands, the International Ecotourism Law, etc., and for the external analysis of

the tourism sector.

• In analyzing data and developing strategy, various tools of management taught in MDM, like

SWOT, 7-S Model, Problem/Object Tree analysis, were used.

The author has tried to obtain all relevant data including international laws on the

conservation of the biodiversity of atolls and the protection of the ecosystem. The relevant

provisions of these laws have been taken into consideration in the formulation of an appropriate

strategy for the sustainable development of tourism in Lakshadweep.

1.4 LIMITATIONS OF THE STUDY

The Lakshadweep is a group of 12 atolls with a fragile ecology, thereby limiting the focus

of the study within the boundaries of the laws prescribed for other sectors of government. This is

- 5 -

done to ensure proper inter-sector linkages for the sustainable development of tourism. Being a

new study on tourism in Lakshadweep, it looks into the causes and effects of existing problems

and determines the means-end relationship for achieving the objectives of developing tourism in

the territory. Time constraints hindered the conduct of more field visits for ascertaining the views

of various stakeholders. Data collection was limited to obtaining feedback from government

officials, documents/reports and the website of the Lakshadweep administration and my working

experience with Lakshadweep Administration. Still, the author can claim to have captured all

relevant data for this MRR.

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CHAPTER 2

THE LAKSHADWEEP ARCHIEPELAGO

2.1 LOCATION AND AREA

The tiniest Union Territory of India, Lakshadweep is an archipelago of 12 atolls, 3 reefs

and 5 submerged banks. It is located between 8 º and 12 º 13” north latitude and between 71º and

74º east longitude, 220 to 440 kilometers away from the coastal city of Kochi in Kerala state of

India, in the Arabian Sea. It has 4,200 square kilometers of lagoon area, 20,000 square

kilometers of territorial waters and about 400,000 square kilometers of economic zones.

The island does not contain any elevated land stratum. All islands are located 4 to 7

meters above the mean sea level. The Map of the Union Territory of Lakshadweep is given

below in figure 2.1.

It is a uni-district Union Territory with an area of 32 square kilometers comprising10

inhabited Islands, 16 uninhabited Figure 2.1: Map of the Lakshadweep

islands with attached islets, and 5 sub-

merged reefs. The inhabited islands

are Kavaratti, Amini, Agatti, Kadmat,

Kiltan, Chetlat, Andrott, Kalpeni,

Minicoy and Bangaram, and Bitra.

The area of each Island is given in

Annex 1.

Source-Lakshadweep.nic.in N E

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2.2 HISTORY2

Legends have it that small settlements first emerged in the islands of Amini, Kavaratti,

Andrott and Kalpeni, after which people from these islands moved to the other islands of Agatti,

Kiltan, Chetlat and Kadmat. Local traditions attribute the first settlements in these islands to the

period of Cheraman Perumal, the last king of Kerala, in 7th century ( A.D). The advent of Islam

in Lakshadweep also dates back to the 7th century around the year 41 Hijra. Even after the

conversion of the all the people of islands to Islam, sovereignty remained in the hands of the

Hindu Rajah of Chirakkal for some years.

In the beginning of the 16th century, the arrival of the Portuguese in India again made

Laccadives an important place for seafarers. Its finely spun coir was much sought after for use by

ships. So the Portuguese started looting island vessels. They forcibly landed at Amini to procure

coir sometime in the early 16th century, but the people of the island allegedly killed all the

invaders by poisoning, thus ending the Portuguese invasion.

After the battle of Seringapattom in 1799, the islands were annexed by the British East

India Company and administered from Mangalore. The British later issued Lakshadweep

Regulation 1912, which conferred limited power of judicial and magisterial status to

Amins/Karanis of the islands. A reasonable restriction upon outsiders was also enforced by the

above regulation, which remains in force under the Lacadive and Minicoy Island (Entry

Restriction) Regulation 1962. An entry permit is thus required for a non-native to visit

Lakshadweep. In 1973 the Union Territory formed as Lacadives and Minicoy Islands in 1956

was re-named Lakshadweep.

2 Vacation India home page- history, accessed as http://www.vacation India.mht

- 8 -

2.3 SOCIO-ECONOMIC PROFILE

2.3.1 Demography3

Demographic data were obtained from the office of the Registrar of India which issues

such every decade, the latest in 2001. Per the census that year, the total population of

Lakshadweep was 60,650, with the Muslims numbering 57,903. Meanwhile, 57,321 persons

(94.5 percent) were Scheduled Tribes (STs), 2,221 were Hindus and 509, Christians.

The entire indigenous Muslim population has been classified as Scheduled Tribes

because of their geographical isolation. According to the Scheduled Castes and Scheduled Tribes

list (modification orders) in 1956, the inhabitants of Lakshadweep, whose parents were born in

these islands and treated as Scheduled Tribes, registered the highest proportion of ST population

besides Mizoram, among all the states/UTs of India. Island wise population data are given in

Annex 2, with Androth Island registering the highest population at 10,720, followed by Kavaratti

Island at 10,113 per the 2001 census, and Bitra Island registering the lowest population at 225.

The territory’s literacy rate of 87.52 percent is the second highest in the country among all

states/UTs. It is higher than the average National Literacy rate of 64.8 percent. Kerala State, on

the other hand, has the highest literacy rate among all States and Union Territories of India at 90

percent.

In year 2001 the overall sex ratio of the population of Lakshadweep was 947, while the

sex ratio of the indigenous Muslim population was 1003 females per 1000 males, indicating a

change from the 994 reported in the 1991 Census of the indigenous population. The population

density of Lakshadweep is 1,894 per square kilometer as per census 2001. Health indicators

trends4 from 1992-2001 are represented in figure 2.2.

3The Scheduled Tribes, Census of India,2001:Data Highlight: Lakshadweep, pages 1 and 2 published in 2004 4 Census of India-2001, The Registrar General of India.

- 9 -

Source: www://Lakshadweep.nic.in

Trends of improvement after census 2001 are given below:

• As per Census 2001, birth rate was 18.05. This decreased to 16.17 in the period 2005-

2006, while the national rate was 24.1 in 2004.

• Death rate of 3.87 in 2001 decreased to 3.50 in 2005-2006; the national rate was 7.5 in

2004.

• Infant mortality rate of 28.88 in 2001 slid to 6.73 in the period 2005-2006; the national

rate was 58 in2004.

• Maternal mortality rate of 0.18 in the period 2000-2001 was down to nil between 2005

and 2006.

2.3.2 Social

Ninety-five percent of the population of the territory is Muslim, majority of them

belonging to the Shafi School of the Sunni Sect. Comparisons of the population of Lakshadweep

FIGURE: 2.2 DEMOGRAPHY OFTHE LAKSHADWEEP

0

5

10

15

20

25

30

35

40

45

50

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Birth rate

Death rate

Infant Mortality

Maternal Mortality

- 10 -

on the basis of religion vis-à-vis the national figure and those of neighboring states are presented

in Annex 3.

Malayalam is spoken in all the islands except Minicoy, where people speak Mahal, which

is written in Divehi script and spoken in Maldives also. Social customs and the stratification of

society in the territory are similar to those of the Hindu society despite adoption of the Muslim

religion. Social customs are similar to the mainland community’s, namely Nayar, in the sense

that like them, the Muslims of Lakshadweep have a matriarchal society, i.e., the women play an

important role in the social and economic lives of the people. The educated youth are well

conversant in English.

The Marumakkathayam is a system of inheritance, under which Tharawad (ancestral)

property descends through the female line, in effect protecting the economic rights of the

females. Thus the Tharawad property system has given economic freedom and independence to

women in the social system of the Lakshadweep. In contrast, the Tharawad property is equally

shared among the members of the joint family in the Kavaratti and Agatti islands. Said property

is managed by the eldest male member of the family known as Karanavan, wh` vo, however,

has no right to alienate or sell any portion of the Tharwad property. The wife and children of the

Karanavan are not entitled to any share from Tharawad.

The predominance of women from all walks of life is a peculiar feature of Minicoy. The

husband takes the wife’s family name after marriage. All family affairs are managed by the

female of the house. Being the breadwinners of the family, most males from Minicoy serve in

international ships as seamen. In his travelogue, the famous traveler Marco Polo (1254-

1324A.D.) made a reference to Minicoy as the island of females.

- 11 -

2.3.3 Economy

The main occupations of the people are fishing, coconut cultivation and coir twisting.

Coconut production patterns covering 1992-1993 and 2001-2002 are presented in figure 2.3.

During the period 2001-2002, production rose to 22,310 nuts per hectare, the highest in the

country. The coconut production of 52.8 million nuts in 2001-2002, which marked the start of

the 10th plan, was topped by the end of the plan in 2006-2007 when production increased to 58.0

million nuts.

Source: Home page on economy of Lakshadweep:http://Lakshadweep.nic.in

The 2001 yields from the second major sector, fishing, are presented in figure 2.4, which

shows major species of fish landings in Lakshadweep. The fish catch for the 10th plan was

52,726 tons. Two new ventures were also initiated in 2001: an ornamental fish hatchery and a

cucumber hatchery.

FIGURE: 2.3 COCONUT HARVESTED (IN ‘000 NUTS)

0

100

200

300

400

500

600

1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02

Nuts

- 12 -

Tourism gained notice as an emerging industry. Poultry, boat-making, and the production

of coconut fiber-based produce like copra-based food items and coir are also among the

occupations of the people of Lakshadweep.

The people of Minicoy are employed in large numbers as seamen. Total labor engaged in

Lakshadweep is 26 percent, inclusive of marginal laborers who account for 3 percent. Twenty-

seven percent of the population lives below the poverty line. In the territory, 11,710 account for

main laborers and 3644 for marginal laborers.

The work participation rate (WPR) indicates the percentage of workers vis-à-vis the total

population. In 2001, the male WPR was 38.6 percent and the female WPR 7.1 percent.

Source: Home page on economy of Lakshadweep: http://www:Lakshadweep.nic.in

Consistent with the previous censuses, the Census 2001 did not report any cultivators or

agricultural laborers from this UT.5 The percentage of unemployed persons registered in the

5 Data Highlight: Lakshadweep, The Scheduled Tribes, Census of India, 2001, pages 1 and 2.

1% 1%

1% 0%

1%

72%

23% 1%

Cornex Purchase RR Sail Sear Shark Tuna Others

FIGURE: 2.4 MAJOR SPECIES OF FISH LANDING IN LAKSHADWEEP 2001

- 13 -

employment exchange is around 19.5 percent (12,700) of the total population. The territory’s

geographical isolation explains the lack of employment options for the educated youth.

2.4 POLITICAL AND ADMINISTRATIVE SETUP

The Administrator is the politico-administrative head of the Union Territory of

Lakshadweep. He is appointed by the President of India on the recommendation of the Ministry

of Home Affairs (MHA), Government of India, per article 239 of the Constitution. Normally a

senior civil service officer of the government of India, the administrator functions under the

Minister for Home Affairs who is responsible to the Parliament. A Member of Parliament (MP)

elected by the people of Lakshadweep represents who represent them in the lower house (Lok

Sabha) of the Parliament. The territory’s politico- administrative set-up is shown in figure 2.5.

President of India

Ministry of Home Affairs Parliament

Member of Parliament Administrator

President Panchayat Lakshadweep

Development Comm issioner/Collector

1 Superintendent of Police/9,Sub. Div.Officer 10 Dweep(Island)

President

Director, DOT

Secretary-Tourism

FIGURE: 2.5 Politico-administrative set-up

- 14 -

2.4.1 Political

The UT of Lakshadweep has no state legislature so that it is the Administrator who, as

the Head of Union Territory, exercises limited rule-making powers in accordance with the

guidelines set by of the Union of India (UOI), its statutes/Laws. In the inhabited islands, a two-

tiered Panchayati Raj system functions under the supervision of the Administrator. On these

institutions are vested the duty of providing basic services and rural development schemes.

Each inhabited island has a Dweep (village) panchayat whose number of elected

members is proportionate to its population. Ten Dweep panchayats have 79 elected members,

each Dweep panchayat headed by a Dweep President elected from amongst the elected members

of the respective island.

The District Panchayat has its Headquarters at Kavaratti, where there are 33 directly

elected members from all the inhabited islands. These 33 members, in turn, elect one president-

cum-chief councilor, and two vice presidents-cum-councilors in the District Panchayat. From

amongst themselves are chosen the head and sub-head of district Panchayat of the UT of

Lakshadweep.

The MP and the chairpersons of the Dweep Panchayats are ex-officio members of the

District Panchayat by virtue of their respective positions. A senior civil service officer who acts

as the chief executive officer to the Panchayati raj assists the district president-cum-chief

councilor.

2.4.2 Administration

The Administrator’s secretariat and district administration function as compact units

under a single file system, Lakshadweep being itself a uni-district administration. To bring the

administration closer to the people, all the inhabited islands along with their attached islands and

- 15 -

the sites of the district were divided into nine sub-divisions in 1983, each headed by the Sub

Divisional Officer under the District Collector/Magistrate, Lakshadweep. Matters relating to the

district administration, law and order fall under the purview of the District Magistrate who also

acts as Development Commissioner.

The developmental subjects of Lakshadweep were allocated to the Collector-cum-

Development Commissioner and the Managing Director (MD), Lakshadweep Development

Corporation (LDCL), who were also designated secretaries of various departments in an ex-

officio capacity. The MD, LDCL, for instance, is also Secretary to the Department of Tourism

(DOT), Lakshadweep, which the Director of Tourism who is under the Secretary’s supervision,

heads. The LDCL is a corporate body that acts as catalyst for the growth of the Lakshadweep. It

looks after value-added activities relating to fisheries and coconut products. It likewise manages

civil supply operations and supplies, as well as passenger ships-related work. A director heads

each of the following departments: Public Works, Agriculture, Co-operation, Social Welfare,

Industries, Electricity, Education, Ports, General Administration, Planning and Statistics,

Finance, Environment and Forest, and Employment.

Vision Statement: The vision adopted by the Lakshadweep Administration under the

Eleventh Development Plan (2007-2012), while not explicitly stated, is expressed in the

objectives of XIth Plan document of the Lakshadweep Administration as follows:

To make the economy of the islands self-reliant through faster and sustainable

development without disturbing the ecology, environment and socio-cultural

heritages.

More specifically the Lakshadweep Administration seeks to do the following:

� Enhance the quality of life of people through the enhancement of income and by

increasing employment opportunities for the youth, particularly the educated youth.

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� Preserve the ecology, the existing social structure, and cultural values.

� Prevent migration from the mainland and highlight the carrying capacity of the islands.

� Strengthen democratic decision-making via the widest level of participation.

Principal Objectives: The overall objective of the Administration is to promote a self-

sustaining economy, which can also make vital and strategic contributions to the economic

development of the nation by increasing the productivity of sea and land, mainly through the

development of agriculture, fisheries, tourism and industries that generate revenue for

development.

2.5 ECOSYSTEM

There are three main natural ecosystems in the Lakshadweep Islands: the lagoon, the and

the Ocean ecosystems. The islands are flat (Land) and scarcely rise more than two meters from

the sea level. They are made up of fine coral sand and boulders, which have been compacted into

sandstone. Rivers and streams are absent, while water seepage occurs a few meters below the

land surface and is replenished by annual rainfall of about 150cm.

As coral reefs are the most productive of marine ecosystems, the contributions of the

reefs to the island ecology are very important. The palm-clad islands of the Lakshadweep, with

their lagoons and reefs, attract large numbers of tourists. The natural and man-made ecosystems

are closely linked together. The coral area is a living museum of the islands because it provides

shelter for the breeding of various marine organisms, even as the environment of these islands is

very fragile and unique.

2.5.1 Ecology of Lakshadweep

The Maldives-Chagos-Lakshadweep atoll is an important global eco-region. No less than

the WWF scientists have pronounced it to be the largest atoll system in the world, with the most

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extensive coral reef systems in the Indian Ocean.6 The global eco-region’s science-based global

ranking indicates it’s having the earth’s most biologically outstanding terrestrial, fresh water and

marine habitats that provide a critical blueprint for biodiversity conservation on a global scale.

Ecoregions, used as the unit of scale for comparison and analysis, are large areas with a

relatively uniform climate that harbor a characteristic set of species and ecological communities.

WWF scientists developed the Global Ecoregions in collaboration with regional experts

in the hope that conservation efforts around the world would contribute to the global bio-

diversity strategy.

As Maldives lies just 80 nautical miles from Minicoy Island of the Lakshadweep, making

it nearer to the territory than the mainland of India, its impact on the ecology of Lakshadweep

merits discussion herein. Tourism development7 in the Maldives is based on the principle of

isolation of tourists from the bulk of the indigenous Muslim population who speak the Dhivehi

language like in Minicoy. A reef encircling a shallow lagoon surrounds each island in the

Maldives, where all the low-lying islands are not more than 2 meters or 7 feet above sea level.

According to the Department of Emigration, Maldives’8 tourist arrivals increased from 467,154

in 2000 to 616,716 in 2004, for an occupancy level of 87 percent of available accommodations.

Like the Maldives, the tiny Lakshadweep Islands sit on top of the coral reefs and are

covered with coral sand. These coral reefs are the habitat of a rich marine life, including various

species of turtles. Aside from coral reefs and sandy beaches, Lakshadweep has small mangrove

patches and lagoons covering a large area, in addition to important wetlands alongside the coral

6http://www.panda.org/index.cfm. Maldives, Chagos, Lakshadweep Atolls - A Global

Ecoregion page from the WWF website. 7mht: http://www.travel guide.com. Maldives Travel Guide, Maldives island resorts web page 8 http://www.tourism.gov.mv/pub./stat-2005. Maldives’s official website, Tourism page.

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reefs. Lakshadweep does not enjoy legal protection because it has not been classified as a Marine

Protected Area (MPA).

2.5.1.1 Geology of Atolls9

Perhaps, volcanic eruptions created these Islands out of the sea, but for thousands of

years, some have been slowly sinking back. The reefs and lagoons that remain form complexes

known as atolls.

While no conclusive theories about the formation of these coral atolls exist, the most

accepted theory is that by the British evolutionist, Sir Charles Darwin. In 1842, he concluded that

the subsidence of a volcanic island resulted in the formation of a fringing reef while the continual

subsidence allowed this to grow upwards. Sandbags first naturally formed in an atoll became the

nesting grounds for sea birds until the humans took over. Meanwhile, the fringing reefs were

quickly built, restored and strengthened by a microorganism called the ‘polypous’, which may be

considered the architects and engineers of these atolls. The hard calcareous skeleton of these

polypous are said to make up the corals, a concept that fundamentally remains valid, although

many believe the submerging volcanic islands to be the result of the melting of Pleistocene ice

sheets.

The salinity index of the island groundwater system indicates that no fresh groundwater

without any saline contamination is available in any island of Lakshadweep. It has also been

observed that the quality of water deteriorates as the duration of pumping lengthens. There is no

doubt, therefore, that over-extraction would deteriorate the quality of fresh groundwater in these

islands.10

9 http://en.wikipedia.org/wiki/Attoll_page 10 Ramachandran, K.K. and Ajaykumar Varma, “A Review of the Contribution of Centre for Earth Science Studies (CESS) Towards Understanding the Totality of Environment of Lakshadweep, India,” http://www.fao.org/docrep.

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2.5.1.2 Flora and Fauna11

The flora of the islands include Banana, Vazha (Musaparadisiaca), Colocassia, Chambu

(Colocassia antiquarum) Drumstic moringakkai (Moringa oleifera), Bread Fruit (Artocarpus

incise), and wild almond (Terminalia catappa), which are grown extensively. Coconut (Cocos

nucifera) is the only crop of economic importance in Lakshadweep. Two different varieties of

sea grass are evident near the beaches: Thalassia hemprichin and Cymodocea isoetifolia. They

prevent sea erosion and the movement of beach sediments.

Tharathasi (Sterna fuscata) and Karifetu (Anous solidus) are oceanic birds generally

found in Lakshadweep, particularly in one of the uninhabited islands known as PITTI. This

island has since been declared a bird sanctuary.

Molluscan forms are also important from the economic point of view of the islands. The

money cowries (Cypraea monita) abound in the shallow lagoons and reefs of the islands. Other

cypraeds found here are the Cypraca talpa and Cyprea maculiferra. Among the crabs, the hermit

crab is the most common. Colorful coral fish such as the parrot fish (Callyedon sordidus), the

butterfly fish (Chaetodon auriga), and the sturgeon (Acanthurus lineotus) are also a plenty.

Turtles likewise proliferate in Lakshadweep. Meanwhile, the following flora and fauna have

been designated state symbols of the territory:

Animal - Butterfly fish locally known as “Fakkikadia”

Bird - Sooty tern locally known as “Karifettu”

Tree - Bread-fruit (Artocarpus incise) locally known as “Chakka

11 http://Lakshadweep.nic.in

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2.5.1.3 Climate

Lakshadweep has a tropical climate. The atmosphere is humid with temperatures ranging

from 22 to 33 degrees Centigrade. From October to April, the climate is very pleasant and

suitable for tourists.

During the rainy season lasting from May to September, the sea is very rough due to the

southwest monsoon. The transportation system to the various Islands is thereby affected. Further,

heavy sea erosion in almost all the islands seriously threatens to destroy houses and the very

existence of some of the smallest islands.

Common features of all the Islands in Lakshadweep include a storm beach on the eastern

rim, a coral sand plain to the west, and white boulders strewn across intertidal space on the

western side, alongside a shallow lagoon.

2.5.1.3.1 Environment12

Damage done to this precious environment can be gleaned from severe soil erosion, the

depletion of corals, fishes and also other flora and fauna. The greatest threat to coral reefs comes

from the relatively rapid establishment and growth of the tourist industry, the introduction of

mechanized fishing, the coral mining construction of breakwaters, barriers and jetties, and

anchor damage and siltation caused by speed boats. Other threats include pollution, increased

shipping traffic, risk of oil spills and dumping, inadequate water disposal and the overuse of

water pumps and fertilizers for agriculture.

It is estimated that annually, more than 8,000 tourists can be accommodated in the islands

of Lakshadweep on a sustainable basis. This amounts to more than five times the number of

tourists of both Indian and foreign origin, who visited these islands in the period 2000-2001. The

12 XIth Plan Document of the Department of Planning and Statistics, Lakshadweep chapter of Environment.

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economics of tourism notwithstanding, the experiences of many islands where the tourism

industry has taken root worldwide show that, unless proper care is taken right at the investment

stage of various development projects, improvements (infrastructure) might prove detrimental to

the environment, economy and culture. In his study on the natural environment of Lakshadweep,

Ramachandran (1982)13 particularly discussed its “land use capability, problems and prospects”.

Thus apprised, proposed total outlay for the environmental protection needs of

Lakshadweep alone, per the XIth Plan, is Rs. 1053.71 million, an investment that is expected to

help promote tourism in the area through the institution of suitable environmental measures. The

scheme-wise allocations for the XIth Plan (2007-2012) are presented in Table 1 in Annex 4.

Special Eco-friendly Features of Tourism in Lakshadweep – In _2004 appreciation

for the Lakshadweep Tourism Department’s efforts to promote eco-friendly tourism at the

International Tourism Bourse in Berlin, Germany was evinced. Some of its important features14

are as follows:

1. All the tourism properties use largely PVC solar streetlights. Solar plants supply electricity

during the day, and compact fluorescent lamps are used.

2. Tourists are encouraged to live in harmony with nature. The islanders are educated to adopt

eco-friendly ways like the burning of coconut husks, rather than the use of pesticides which can

harm the environment and ecology, to tackle mosquitoes and pests.

3. A film informing tourists about the island, its environment, the coral reefs, and their

management is shown to them once they board the ship on the way to Lakshadweep islands.The

13 Ramachandran and Varma, “A Review of the Contribution of Centre for Earth Science Studies (CESS).” 14 XIth Plan Development Document of Department of Planning and Statistics, Lakshadweep Administration. Chapter on Tourism.

- 22 -

boats, vessels, and ships of the Lakshadweep Administration, especially of the Lakshadweep

tourism sector, carry the names of Island territories that have great ecological value.

4. Most tourist accommodations take on the form of thatched huts and tiled roofs.

5. Fishing in Lakshadweep is carried out using the pole and line method only, as this is the most

eco-friendly method of fishing for tuna in the sense that it allows only the mother fishes to be

caught. The young ones, along with other marine creatures are spared, which would not be the

case if other fishing methods were used.

2.6 TRANSPORT: AIR AND SEA

As the Agatti Island airport is connected to the International Airport at Cochin, Kerala and

Kingfisher, Indian airlines fly between Agatti and Cochin. One helicopter with 20 seats that is

intended for emergency services for the Lakshadweep administration is also used for tourists

from various islands to the Agatti airport.

Four passenger ships, namely, the MV Tippu Sultan, MV Bharat Seema, MV Amindivi and

MV Minicoy, operate between Cochin and Lakshadweep. The passage takes between 14 and 20

hours. The ships offer different classes of accommodations, as follows: A/C Deluxe Class with

two berth cabins, A/C First Class with four berth cabins, and Tourist Class with A/C seating.

The ships MV Tipu Sultan and MV Bharat Seema have cafeteria and snack bars, an

entertainment lounge, video shows, and an upper deck promenade, among others. A doctor is

available on call aboard these ships. MV Amindivi and MV Minicoy also offer comfortable A/C

accommodations.

New Ship Arrival: Star Cruises, an international luxury ship liner, began operations in

October 2005. For its part, the Lakshadweep Administration has entered into various contracts to

acquire the following:

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• Three-passenger high-speed vessels with 150 seating capacity, which arrived in 2007.

MV Black Marlin, one of the high-speed crafts (150 seats), flagged off on Republic

Day, 26 January 2008.

• One-passenger high-speed vessel with a seating capacity of 20 and one passenger

high-speed vessel with a seating capacity of 15 from NGV Tech SDN, BHD,

Malaysia.

• Two passenger-cum-cargo ships with capacities of 250 seats and 100 tons each.

Contracts for these were signed with Sri Lanka in March 2008.

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CHAPTER 3

THE TOURISM SECTOR

The tourism industry employs 260 million people and generates 10.6 percent of the

world’s GDP, making it the largest as well as the fastest growing industry worldwide. Planning

and management are essential to reaping benefits from the industry, and more importantly, to

protecting and conserving the biodiversity of tourist destinations. The effective allocation and

utilization of resources are challenging tasks for the development of sustainable tourism, which

requires conserving resources, valuing the local culture and traditions, and contributing

significantly to the economy.

Tourism in India has grown substantially over the last three decades. Its contribution to

GDP reached 6.1 percent in 2006. In 2003, 10.98 percent of total international tourists visited

Kerala, a neighboring state of Lakshadweep.15 Meanwhile, domestic and international arrivals in

the Kerala increased by 18.1 percent and 13.5 percent, respectively. Tourism has apparently

become one of the largest foreign exchange earners of the country. For its part, domestic tourism

generated employment for 46.16 million people in 2006.

On 31 March 2004, Lakshadweep’s gross state domestic product for the period 2003-

2004 was estimated at $60 million. Given the fact that in the UT, only coconut cultivation and

fishing constitute the major sources of income and employment, tourism is looked to, as another

major source of revenue.

Unfortunately, the growth of tourism inflow has been very erratic in Lakshadweep.

Normal growth has, in fact, been observed to range between 7 and 9 percent per annum. In the

period 2005-2006, the total number of tourists in Lakshadweep was 15,203, up from 4703 in

_2003-2004 due to the starting of the Star cruise. Still, tourism is expected to provide a market

15 http://tourism.gov.in.

- 25 -

for local products, just as the poor natives are expected to benefit from infrastructure

development that will allow them to market their products in time.

3.1 SUSTAINABLE TOURISM

Sustainable Tourism: According to the World Tourism Organization, sustainable

tourism is “envisaged as leading to the management of all resources in such a way that

economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity,

essential ecological processes, biological diversity, and life support systems” (Honey 2002).

This is a conscientious form of tourism and tourism development, which encourages

going back to natural products in every aspect of life and helps preserve nature in the process. It

is also the key to sustainable ecological development. Therefore, in the case of Lakshadweep

tourism, sustainable tourism is a significant aspect of the sustainable development of the UT of

Lakshadweep.

3.2 TYPES OF TOURISTS AND FACILITIES

Tourists vary in terms of their interests, nationality, and age. Lakshadweep, for its part,

has classified tourists into either domestic or international.

There are many international researches on the various types of tourists. The most relevant for

this paper is the study done by Westvlaams Ekonomisch Studiebureau (Johnson et al. 1994, 21)16 in

Belgium, in the sense that 70 percent of tourists from Europe visit India. The organization interviewed

3,000 adults, of whom 75 percent were identified as potential holiday-makers. Said research viewed

such aspects of these tourists as the following: socioeconomic characteristics, behavior, and

patterns of expenditure during holidays.

16 Irina Kozlova Svetlana Ševèenko, “Identifying Customer Needs:Competitiveness of Liepaja in the Tourism Market,” thesis under the supervision of Hans-Joachim ZilckenBachelor, 2004. http://www.types of tourist.pdf

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The typologies of tourists used by Westvalaas Ekonomisch Studiebureau, while

convenient for Lakshadweep, have to be complemented by the additional groupings of

cosmopolitans and students/youth backpackers among domestic tourists, for a more complete

profile. Similarly, the official/VIP and corporate business groups, who frequently visit for

official reasons or wish to organize business meetings in an isolated and peaceful environment,

must be considered in light of tourism in Lakshadweep. In table 3.1, these groups have been

regrouped on the basis of similarity of choice of Lakshadweep facilities. However, the types of

tourists for domestic/international and facilities in Lakshadweep are mentioned with their general

preference according to the interest of each group indicated. (See the ‘Yes’ or ‘No’ matrix in

table 3.1.

Table 3.1: Matrix of Typology of Tourists and Choice for Facilities

Family-oriented sun and sea lovers

Cosmopolitan rich and rest seekers

Traditional, contact- minded holiday makers

Discoverer, nature viewers and sea lover

Officials/VIP and business conferences

Youth/Students, Backpackers

Beaches/Lagoon Yes Yes Yes Yes Yes Yes Rich biodiversity Yes Yes Yes Yes Yes Yes Uninhabited islands No Yes No Yes Yes No Hut/cottage with all modern 3-star facilities in uninhabited islands

Yes, but not all

Yes No Yes Yes No

Water sports like scuba diving, snorkeling, yatching, boating, canoeing, training centers, etc.

50 percent Yes 50 percent No

Yes No Yes 50 percent Yes 50 percent No

Yes

Traditional distinct culture, history, mosque, lighthouse

Yes Yes Yes Yes No No

Flora and fauna on all islands and Pitti Island Bird Sanctuary

Yes Yes Yes Majority Yes

Majority yes

On board ship and Star cruise operation with Non-AC/AC and AC deluxe accommodation under various tour packages. Details are mentioned in Annex7.

Yes Majority No but some of them Yes.

No Yes No Yes

Type of

Tourists

Type of

facilities/Products

in Lakshadweep

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Available facilities and tariffs vis-à-vis the geographical features of individual tourist

destinations in the Lakshadweep are mentioned in detail in Annex 5. The land and lagoon areas

of each island are also given in Annex 1.

In line with this research, seven clusters were formed. The biggest cluster, the family-

oriented sun and sea lovers (27.2 percent), shared several common traits, namely: an appreciation

for beautiful sceneries, ‘making time for each other’, and an appreciation for kind hospitality,

good food, and ‘child-friendly’ activities. On the other hand, 25.8 percent of the visitors were

considered rest-seekers. The next group was constituted by nature viewers (12 percent) who

preferred visiting beautiful landscapes, followed by discoverers (10.1 percent) who liked to

establish contacts with people, and adored cultural holidays and adventures. Traditionalists

represented 9.9 percent of respondents, who were particular about safety and security. A group

of almost the same size, or about 9.5 percent, attached great importance to a hospitable reception,

to ‘making time for each other’, and ‘making contact with new people’. These were the contact-

minded holiday makers. The smallest group was made up of active sea lovers (5.5 percent) who

considered the presence of the sea and beach the most important factors; these people were also

interested in active leisure and sports activities.

3.3 INTERNATIONAL LEGAL FRAMEWORK

The entire world community is concerned about environmental degradation, particularly

because the problem of global warming is increasing and threatening the existence of life, aside

from causing imbalances in the ecosystem. Therefore, the conservation of biodiversity is an

utmost concern of international agencies which have deliberated on these issues and formulated

guidelines for promoting eco-tourism in a sustainable manner.

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3.3.1 The Global Code of Ethics

The World Tourism Organization has launched the Global Code of Ethics for Tourism,

which promotes environmental, social, and economic principles for sustainable tourism. Articles

3, 5, and 9, in particular, address the environmental and social aspects of sustainability. The text

of the Code provides a useful resource for anyone drawing up similar agreements at the national

or regional level. The Mohonk Agreement17, for instance, provides guidelines for sustainable

tourism. The framework indicates the principles for the certification of ecotourism and

sustainable tourism, adopted unanimously at an international workshop in Mohonk Mountain

House, New Paltz, New York in November 2000. Workshop participants recognized that tourism

certification programmes need to fit particular geographical reasons and sectors of the tourism

industry, while also agreeing on a basic set of principles that should form the basis of any

ecotourism and sustainable certification programme.

Green Globe 2 is the global affiliation, benchmarking and certification program for

sustainable travel and tourism. The Green Globe brand signifies better environmental

performance, improved community interactions, savings through the use of fewer resources and

the generation of greater yields from increased consumer demand.

3.3.2 Conservation of Biodiversity and the Coral Reefs

The environment and tourism are intertwined and cannot be separated. That is, the

environment protection law cannot be ignored while developing tourism. That the conservation

of biodiversity and coral reef protection are relevant to tourism is given credence by the

following:

The Convention on Biological Diversity (CBD) that came into force in December 1993

and Article 10 of the convention, which relates to the sustainable use of biodiversity. Tourism as

17http://www.eco India.com/eco-tourism main page

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a potential sustainable use of biodiversity was recognized in the programme structure of the

CBD, and a “sustainable use and tourism” programme was established.

- In 2000, the conference of parties of the convention on biological diversity considered

the relationship between tourism and biodiversity during its 5th meeting in Nairobi.18

3.3.3 Coral Protection Initiatives

Addressing the threats posed to coral reefs requires two separate areas of action:

protection of the reefs themselves and pollution prevention. While admittedly domestic laws

would be the most effective in addressing these issues, it has also been noted how very few

international laws directly addressed coral reefs conservation in the past. Then in the 1992 Earth

Summit, coral reefs finally received some attention, with Chapter 17 of Agenda 21, the blueprint

for sustainable development, declaring that;

States, acting individually, bilaterally, regionally or multilaterally and within the

framework of international organizations, should assess the need for additional measures

to address the degradation of the marine environment from shipping, by supporting wider

ratification and implementation of relevant shipping conventions and protocols, and

taking action to ensure respect of areas designated by coastal States, within their

exclusive economic zones, consistent with international law, in order to protect and

preserve rare or fragile ecosystems, such as coral reefs and mangroves.”

Further, international efforts to address the problem of coral reef degradation were

spearheaded by the International Coral Reef Initiative (ICRI) created in 1994. The ICRI calls on

governments and international organizations to strengthen their commitment to conserve, restore

and promote the sustainable use of coral reefs and associated environments, with each country

18 : Integrating Biodiversity into Tourism sector: A Guide to Best Practice-UNEP/UNDP Biodiversity Support Program.

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and region incorporating into its existing local, regional, and national development plan,

management and provisions for the protection, restoration, and sustainable use of the structure,

processes and biodiversity of coral reefs and associated environments.19

3.4 NATIONAL POLICY AND LAWS

As Lakshadweep is a restricted area, non-tourists, as well as domestic and international

tourists must obtain an entry permit from the Lakshadweep Administration to gain entry. The

entry restriction rule imposed by the British Administration under Regulation 1912 meant to

protect the rights and property of the natives. Thereafter, the Government of India also realized

the need to restrict/regulate the entry of non-natives to Lakshadweep in order to protect the

property and social rights of the natives of these Islands. To this end, it issued the Laccadive

Minicoy and Aminidive Islands (Restriction on Entry and Residence) Rules, 1967.20 The

Lacadive, Minicoy and Aminidive Islands Land Regulation, 1962, also prohibited the transfer of

land to non-natives of Lakshadweep, except government agencies.

The main tourism policy is formulated by the national government. Within it, concerned

state/UTs, according to the nature of tourism and ecology of the area, determine respective

policy. However, the Ministry of Environment and Forest, Government of India, also has

policies on the conservation of biodiversity, which the tourism sector abides by.

3.4.1 Tourism Policy of the Government of India21

While the Ministry of Tourism and Culture of the Government of India is the nodal

ministry for formulating policies for the development of tourism, the Ministry of Environment

and Forest plays an important role in regulating the environmental activities of the tourism

19 Source for Coral reef initiative - UNEP industry and environment Oct.-Dec-1998, page-47. 20 http://www.Lakshadweep.nic.in 21 http://tourism.gov.in-Website of Ministry of Tourism, Government of India Lakshadweep page.

- 31 -

industry to protect the ecosystem of the area. In line with these principles, the international

convention ministry advises state and Union Territories to formulate appropriate guidelines for

the protection of the environment and for the sustainable development of tourism. Coastal zone

regulations are strictly adhered to by all branches of government throughout their quest to

develop the area, including the tourism industry.

To develop tourism in India in a systematic manner, the sector should be positioned as a

major engine of economic growth. To harness tourism’s direct and multiplier effects for

employment and poverty eradication in an environmentally sustainable manner, the National

Tourism Policy formulated in 2002 decreed the following:

� Position tourism as a major engine of economic growth;

� Harness the direct and multiplier effects of tourism for employment generation, economic

development and providing impetus to rural tourism;

� Focus on domestic tourism as a major driver of tourism growth;

� Position India as a global brand to take advantage of the burgeoning global travel trade

and the vast untapped potential of India as a destination;

� Acknowledge the critical role of the private sector with government working as a pro-

active facilitator and catalyst;

� Create and develop integrated tourism circuits based on India’s unique civilization,

heritage, and culture in partnership with States, private sector and other agencies; and

ensure that the tourist to India gets physically invigorated, mentally rejuvenated,

culturally enriched, spiritually elevated and “feels India from within”.

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3.4.2 Law of Conservation of Environment and the Coral Reef22

Coral reefs were declared ecologically sensitive areas under the Environment (Protection)

Act 1986, which banned their exploitation followed by a Coastal Regulation Zone (CRZ)

Notification in 1991 that prohibited development activities and the disposal of waste in the

mangroves and coral reefs. Taking into consideration the importance of coral reefs and the factor

responsible for their deterioration, Andaman and Nicobar Islands, Lakshadweep Islands, Gulf of

Mannar and Gulf of Kachchha, have been identified for conservation and management.

The Coast Regulation Zone (CRZ) Act of 1991 was enacted by the Government of India

to protect the Indian coast from degradation. The area influenced by tidal action of up to 500

meters from the High Tide Line (HTL), and the land between the Low Tide Line (LTL) and the

HTL, have been declared part of the Coastal Regulation Zone (CRZ). The area is relaxed to 50

meters in the Lakshadweep. The CRZ-I zone includes ecologically sensitive areas, mangroves,

coral reef areas close to breeding grounds of fish and other marine life, areas of outstanding

natural beauty and Marine Protected Areas.

Under the Wildlife (Protection) Act, 1972, India initiated action through state

governments to create a network of MPAs that would provide protection to critical and important

marine ecosystems. While Lakshadweep is in CRZ-1, it is not covered under the MPA.

Recently, the Ministry of Environment and Forests, Government of India was notified of

some marine life-like corals and whale sharks in Schedule-I of wildlife under the Wildlife

(Protection) Act, 1972 so it would provide strict protection against poaching and destruction.

22

H. S. Singh, “Marine Protected Areas of India: Status of coastal wetland conservation,” page-3

* Morrison 2 Desktop Folder: Current Project :new wcpc:MPA_WCPA:India.doc-Website

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3.5 CORALS IN INDIA23

Corals, which are very sensitive, are found in tropical seas housing many other types of

organisms. Serving as the base of small land masses in the sea, they generally entice nature-

loving tourist to spend their holidays in beautiful sand beaches.

In India, coral reefs have been distributed in six regions, viz. the Gulf of Kachchha,

Lakshadweep Islands, Gulf of Mannar, Palk Bay, Andaman and Nicobar Islands. More recently,

table reefs were identified in the Malwan coast (Ratnagiri) of Maharashtra State. Fringing and

barrier reefs are also found in Andaman and Nicobar Islands (Anon 2000).

Andaman and Nicobar24 constitute a UT of India like Lakshadweep. They lie over an area

of 8,249 square kilometers in the Indian Ocean, 193 kilometers away from Cape Negrais in

Myanmar, 1,190 kilometers from Chennai, and 1,255 kilometers from Kolkata.The marine

ecosystems25 of the Andaman and Nicobar Islands are unique because of their very high degree

of biodiversity and the endemism in their fauna and flora. The coral reefs have also come under

heavy pressure due to uncoordinated and inconsistent developmental activities along the coastal

lands, activities that have led to deforestation, mangrove habitat destruction, and the degradation

of marine ecosystems. These islands are unlike Lakshadweep in that they are without a lagoon or

beaches for water sports facilities.

Atoll reefs are recorded in the Lakshadweep archipelago. The total coral reef area in

Lakshadweep is 816.1 square kilometers, the second highest in the six regions. The presence of

various types of reefs can be better appreciated in Annex 6, which shows the extent of the coral

reef biodiversity of Lakshadweep.

23 Singh, Marine Protected Areas of India.. 24 http://www.exotiqueindia.com 25 K. Dorairaj1 and R. Soundararajan, “Status of Coral Reefs of Mahatma Gandhi Marine National Park, Wandoor, Andamans.” http://www.fao.org/docrepj.htm.

- 34 -

Tourism is increasingly being advocated as a means of increasing economic returns from

the use of the reefs with minimal damage. However, in several reef areas, especially in the very

popular ones to which access is easy, tourist activities have exceeded the carrying capacity.26

Though the major impact of these activities is predicted to be generally on the reef biota, the

fallout of tourism is expected to cover all factors that might otherwise strain the carrying

capacity of the reefs. These factors include: construction activities on or near the reefs, boat

traffic and oil spills, pollution with sewage and non-degrading material (plastic bags, soft drink

cans), abandoned or lost diving and reef-walking accessories. Examples provided by Andaman

and Nicobar will prove useful in assessing environmental impact while developing tourism, to be

able to reap the benefits of rich biodiversity.

3.6 MAJOR ECOTOURISM DESTINATIONS IN SOUTH-WESTERN INDIA

Ecotourism success stories abound in India despite there being nothing new in

ecotourism, given that the concepts27 of tourism have already been integrated with the principles

of environmental management, and such practices are in vogue in all parts of India. In a sense,

therefore, ecotourism is a western concept that entails putting “old wine in a new bottle”. It is not

new or unique to countries like India, where ecological balance is a way of life for a large section

of the populace.

The following are important ecotourism destinations along the southwestern coast of the

Arabian Sea. They have influenced the marketing of the tourism products of Lakshadweep.

3.6.1 Goa28

Goa is a state of India situated along the coast of the Arabian Sea. Lying on

26 M. Wafar, “Carrying Capacity of Coral Reefs”, National Institute of Oceanography, Dona Paula P.O., Goa -4 27 O.P. Kelkar, Ecotourism and Green Productivity in India. 28 http://www.goa.nic.in.

- 35 -

the western coast of the Indian Peninsula, Goa is geographically located between the

latitudes of 15° 48' N to 14° 53' N, and longitudes between 74° 20' E to 73° 20'E.

Transport: Indian Airlines, Jet Airways, and Air Sahara fly to Goa from Delhi,

Mumbai, Bangalore, Chennai, Kochi, Kozhikode, Pune and Agatti. The most important

railhead in Goa is Madgaon, which is also known as Margao. Konkan Railways runs

various trains en route to Goa from distant places like Delhi, Mumbai, Bangalore, Kochi,

etc.

The main national highways that cross Goa-4A, 17 and 17-A lead to Goa. The

distances between Panaji and other major cities are as follows: Mumbai - 594km,

Belgaum - 154km, Bangalore - 632km, Pune - 471, Ratnagiri - 236km. State transport

buses as well as private coaches ensure comfortable journeys.

Goa is famous for ecological tourism activities like wildlife viewing, trekking,

rafting, bird watching, angling, camping, sea beaches navigation, and many others.

Besides its natural beauty, fabulous beaches and sunshine, Goa takes pride in the laid-

back, peaceful, warm and friendly nature of its people. Goan cuisine is a blend of

different influences to which Goans have been exposed over the past centuries. Since the

arrival of the hippies in the sixties, Goa has been a major destination of international and

domestic tourists.

Two types of tourists with distinct needs visit Goa. The first type consists of domestic

tourists who comprise 80 percent of all tourists in the island and come to experience the Goan

culture which is known for its mysticism, sense of freedom and an unconventional dress style.

The second type consists of international tourists who visit Goa purely for its natural

environment, sun, and beaches. The tourist season in Goa begins in late September and carries on

through early March. The weather gets fairly hot around May up till the end of June.

- 36 -

Large chains of hotels may be found among the more than 20 four- and five-star hotels in

Goa, in addition to which are various other hotels and cottages. For double bedrooms in five-star

hotels, tariffs range from US$150 to US$500 per day.

3.6.2 Kerala29

Kerala is a state of India located at its southwestern tip along the coast of the Arabian

Sea. Some 560 km long, the narrow stretch of land has a population of 31.84 million dispersed

over 38, 863 square kilometers. The Malayalam and English languages are widely spoken in

Kerala, which has 7 five-star, 9 four-star, and 66 three-star hotels, in addition to other small

hotels. Tariffs in three- to five-star hotels range from US$100 to US$700 per day for a room.

Transport: The state has three international airports located in Thiruvananthapuram,

Kozhikode and Nedumbassery (Kochi), which cater to domestic flights, as well. It has a good

system of roads and railways. Kochi is a major seaport, while Beypore (Kozhikode), Alappuzha,

and Kollam are minor seaports.

The most loved tropical paradise of India, Kerala boasts of having some of the richest

biodiversities in the World. Today it is one of the most sought-after tourist destinations in Asia,

and represents one of India's three richest tropical moist forest areas. This part of the country

with its wet evergreen forests has the most complex and species rich vegetation assemblage in

the country. Endemism is very high especially among flowering plants, small mammals and

amphibians. Kerala is also home to a kaleidoscope of people and cultures.

It has been significantly successful in its tourism efforts, in creating a key tourism

platform for the state and in positioning itself competitively in the international tourist market.30

In 2003, Kerala registered the highest growth in international arrivals in India at 26.8 percent.

29 http://www.ecoindia/kerala 30 Kerala’s Approach to Tourism Development: A Case Study, Ministry of Tourism & Culture, Government of India.

- 37 -

Acclaimed as India’s only ‘tourism superbrand’, Kerala has been able to develop strengths in

certain core areas of product development and infrastructure creation.

The palm-lined beaches of Kerala are most visited for their gentle surf and soothing

azure waters. Some of its beaches--Alappuzha Beach, Kovalam Beach, Pthiramanal Beach,

Sankhumugham Beach, Thirumullavaram Beach, and Varkala Beach Kerala--provide a tranquil

and healthy ambience for yoga, meditation and Ayurveda activities.

3.6.3 Bangalore31

Bangalore is an ecofriendly business city which has become a major tourist destination in

the region. Southeast of the South Indian State of Karnataka, it is positioned at 12.97° N 77.56°

E and measures 741 square kilometers. Situated about 300 kms away from Cochin and 650 kms

from Goa, Bangalore is connected by air, road and train to various areas in the region. Tourists

can travel from Bangalore to Cochin, Goa by any mode of transport. Air tariff from Bangalore to

Cochin is approximately Rs5000-6000.

The city has a large number of hotels in all categories. Tariffs of high category hotels in

Bangalore range from US$125 to US$550.

It is home to numerous public sector, heavy industries, software companies, aerospace,

telecommunications, machine tools, heavy equipment, and defense establishments. Bangalore is

known to be the Silicon Valley of India due to its preeminent position as the leading contributor

to India's IT industry. It has developed into one of India's major economic hubs. Its various

corporate houses can be attracted to Lakshadweep for confrences and holiday trips.

31 http://en.wikipedia.org/wiki/Bangalore#Geography_.26_Climate

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CHAPTER 4

ORGANIZATION OF TOURISM IN LAKSHDWEEP

4.1 DEPARTMENT OF TOURISM

At present, the Department of Tourism32 (DOT) is supervised by a Managing Director,

Lakshadweep Development Corporation Ltd., who serves as ex-officio secretary under the

overall supervision of the Administrator, Lakshadweep. A Director appointed in an ex-officio

capacity from among senior officers of the Lakshadweep Administration heads the DOT because

there is no sanctioned post for Director of Department of Tourism in the Lakshadweep

Administration. Under the Director are a superintendent (Administration) and an accountant

assisted by clerical staffs. At present, four tourism officers and three water sports instructors of

the DOT work with the Society for the Promotion of Nature Tourism and Sports (SPORTS) in an

ex-officio capacity.

Given the increasing significance and sensitivity of tourism, the Administration of

Lakshadweep reorganized and substantially strengthened the Department of Tourism in 1990

with the appointment of five tourism officers and four ministerial staff to look after and manage

tourism-related issues. Being responsible for the implementation of various schemes and plans,

the DOT is currently responsible for the implementation of the XIth Plan.

4.2 TOURISM ACCOMMODATIONS

DOT is the owner of accommodations in the various islands, while SPORTS manages

these on lease for tourism activities. The details of accommodations are given in Table 4.133.

32 Director Pravesh Jha, Department of Tourism, Lakshadweep. 33 http://www.lakshadweep.nic.in

- 39 -

Accommodation facilities indicated are with respect to specific resorts with water sports

facilities, to be discussed in the next sub-section.

Table: 4.1 TOURIST ACCOMMODATIONS ON ISLANDS Name of

Island

Family

Huts

Beds Restaurants Honeymoon

Huts

Beds Executive

Huts(AC)

Beds Prefab

Huts

Beds Private Hut Be

ds

Total Bed

Capacity

Kavaratti 5 10 1 10

Bangaram 30 60 1 8 16 8 22 1 2 60

Kadmat 10 20 1 4 60

Kalpeni 1 3 8 8

Minicoy 2 10 20 6 26

Agatti 10 20 20

Total 45 90 6 8 16 28 62 1 2 7 14 184

Source-http://www.lakshadweep.nic.in

4.2.1 Resorts and Huts34

All infrastructures were developed by the DOT through the Department of Public Works

as per the Public Works Manual for construction. However, seven private huts also operate under

SPORTS at Kalpeni and Minicoy. Facilities and geographical features are mentioned in section-

3.2 of chapter 3 and in Annex 5. Tariffs for facilities and packages linked with transports are

given in detail in Annex 7, per resort/island.

1. Agatti Beach Resorts (AIBR) - The resort is situated within walking distance

from the Agatti airport. High-speed boats for hire by groups of tourists from AIBR to other

islands are available. High quality basic amenities at three-star facilities for indoor sports, water

sports like snorkeling, scuba diving, deep sea fishing, lagoon fishing, bottom-glass boats, etc. are

similarly available. Facilities and tariffs are listed in Annex 7. Resort structures built by the

government are on lease to the resort operator, Mr. Muthukoya, who determines the schedule of

tariffs and types of packages available.

34 Department of Tourism, Lakshadweep.

- 40 -

2. Kadmat Island Resort – The Kadmat Island Resort built by the Lakshadweep

Administration consists of two complexes: a family hut complex and a water sports complex.

The island resort has a total bed capacity of 58. Since it began operations in 1995, it has been

managed by SPORTS which pays a monthly rent of Rs. 20,000 and will continue to do so up to

31 May 2010. Both air-conditioned and non-air-conditioned cottages are available in the island.

SPORTS offers tour packages lasting from four to six days at the resort. Said package is

called the Marine Wealth Awareness Programme. Kadmat is also the base for Star Cruise

operations. It hosts the scuba divers in the island.

3. Bangaram Island Resorts (BIR) – The Bangaram Island Resort (BIR) with its

sixty cottages/beds and connected support facilities was constructed by the Lakshadweep

Administration on land leased from local landowners. The resort was opened to international

tourists in 1972. BIR is on lease to SPORTS, which further subleased it to the Casino Group of

Hotels. Figure 4.2 shows the Bangaram Beach, a tourist hut, and the interior of a cottage. Tariffs

of rooms are listed in Annex 7 A. These range from US$325 to US$750 per day.

Figure 4.1 Agatti Beach cottage

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4. Minicoy Island Resort - The 20-bed Minicoy Island Resort was also built by the

Lakshadweep Administration. On the uninhabited southern part of the island, the Department has

put up 10 cottages and 20 beds. Apart from these, there are three private cottages set up with the

help of the DOT. Unlike other resorts, Minicoy resorts are not leased out to SPORTS. SPORTS

pays Rs. 250/- per day per room, and Rs. 750/ for the dining hall and kitchen as rent for the days

of occupancy to DOT. The 10 cottages and the three private cottages are marketed by SPORTS

which operates Swaying Palm in the Minicoy Resort. These are geared for tourists who avail of

tour packages.

5. Kavaratti Island Beach Resort – The Kavaratti Resort constructed by the

Lakshadweep Administration has been on lease to SPORTS at a nominal rent since 1983. The

resort has five non-A/C cottages with a capacity of 10 beds. Managed by SPORTS at a nominal

rent, they mainly cater to students groups and scuba diving enthusiasts. The cottages are used in

line with the the Taratashi tour package of SPORTS. Occupancy in the resort is generally very

low due to the limited number of beds which cannot accommodate tour groups. Moreover, the

cottages are rather old. The Kavaratti unit of SPORTS acts mainly as the catering wing of the

Lakshadweep Administration.

SPORTS manage the Dolphin Dive Center at Kavaratti built by the Administration. The

center has two instructors in Water Sports from the Department.

The ten-bed capacity of Kavaratti, which is the capital of Lakshadweep, should be

increased to at least 100, so that groups who take the waters sports course can be accommodated.

Figure 4.2 Bangaram Beach Resort Island

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Likewise, accommodation at Agatti, Kadmat, Kalpeni, Bangaram and Minicoy should also be

increased to 100-bed capacities. Existing accommodations can hardly meet the normal growth in

tourist demand, which is pegged at 7 to 9 percent. Packages, accommodations, and transport

need to be coordinated to achieve the targeted growth of tourism.

4.3. TOURISM PRODUCTS-TOUR PACKAGES

The schedule of costs of package tours including transport and lodging as determined by

lessees and SPORTS is given in Annex 7. Taxes, tariff and lease terminology used in annexures

or in report are defined as follows;

• Taxes – Local taxes by tour operators are charged as per policy of Kerala state like- sales

tax, service tax, etc. The Lakshadweep Administration does not impose local taxes.

However, income tax/corporate tax is applicable as per national policy on this matter.

• Tariff - Cost of packages, cottages and ship fares, including or excluding food and other

services, as specified.

• Lease - Rent of resorts received by DOT or SPORTS, as the case may be, in lieu of

leased resorts.

The details of tour packages operated by Lessees of SPORTS are as follows:

1. Coral Reef Package: This five-day tour package covers the islands of Minicoy,

Kavaratti and Kalpeni, aboard M.V.Tipusultan. The said ship has 150 seats/berths reserved for

the Coral Reef package tourists. SPORTS pays for the tourist tariffs to the Port Department and

operates the package covering three islands. For three days, tourists spend the day in the islands

and stay onboard the ship at night. Three classes of accommodations are available onboard M.V

Tipusultan: deluxe, first class and tourist class. The main attractions of the package are the visits

to three islands, snorkeling at Kalpeni, an aerial view from atop the century-old lighthouse in

- 43 -

Minicoy, and scuba diving/ a ride in the glass-bottomed boat to explore marine life at Kavaratti.

Also available is a wide range of water sports activities like kayaking, canoeing, swimming, etc.

This major package of SPORTS used to be the mainstay of the organization before Star Cruise

operations began, prompting SPORTS to diversify its offerings.

2. Marine Wealth Awareness Program: The five-night package to the island of

Kadmat aboard M.V.Tipu Sultan/M.V.Amindivi/M.V.Minicoy takes place in the full-fledged

Water Sports Institute in the island. The Institute has scuba diving facilities.

3. Swaying Palm Package: The five-night package to the island of Minicoy begins

with a trip onboard M.V.Tipu Sultan/ M.V.Amindivi/ M.V.Minicoy. At the island are ten twin-

bed Cottages (AC) and three private (non-AC) cottages. A full-fledged Water Sports Institute

with scuba diving facilities is also available in the island.

4. Taratashi : The five-night package in the island of Kavaratti, the Administrative

Capital of Lakshadweep, begins with a trip onboard M.V.Tipu Sultan/ M.V.Amindivi/

M.V.Minicoy. Five twin-bed cottages (non-AC) are available in the island, along with a full-

fledged Water Sports Institute with scuba diving facilities.

5. Weekend Package: The one-day excursion package to the island of Kalpeni

begins with a boat ride at Kochi on a Saturday and ends with a ride back to Kochi on Monday

morning. Sunday is spent on the island of Kalpeni where several water sports activities are on

hand.

6. Scuba Diving Package to Kavaratti: At the Dolphin Dive Center, Kavaratti

offers a Discover Scuba and a PADI Open Water Dive Course lasting eight days. Approved by

world-recognized diving institutes (Pacific Asian Diving Association, SAVA, Mauritius Scuba

Diving Association, CMAS), the Professional Association of Diving Institution (PADI) course

has attracted clientele from the upcountry markets of Germany, Italy, UK and the Pacific area.

- 44 -

Excellence in quality and the ability to impart the latest techniques in the diving arena are

important criteria for the institute’s higher capacity utilization and appreciation by the customers.

These tourism products are suitable to the ecosystem of Lakshadweep in view of the

sensitive eco-fragile island and the scarcity of resources. The tourists stay on board during the

night and travel to the different islands in the daytime, where they enjoy the beauty of the islands

and water sports. For organizing such packages, SPORTS pays the tariffs to the port department.

These packages which are for different periods ranging from one day to eight days provide

choices to different types of tourists whose interest and budgets may vary. The packages help the

Administration invest much less in accommodations while maintaining the carrying capacity of

the islands. In 2005, group tours dramatically increased following the start of Star Cruise

Operations. This increase created market opportunities for products of the native population, not

to mention better prices for the same.

7. M/S Star Cruises: M/S Star Cruises operating cruise ships to Lakshadweep started out

with MV Superstar Libra’s sailing from Mumbai to Kadmat on a regular basis from October

2005 onwards. Apart from this, M/S Ocean Cruises India Pvt Ltd also began the operation of an

exclusive cruise ship, the MV Ocean Odyssey, to the islands of Suheli Valiyakara, Cheriyam and

Thinnakara since January 2007. At present, two ships, namely, M.V. Superstar Libra and MV

Ocean Odyssey operate in Lakshadweep, generating revenues amounting to Rs20 million.

SPORTS is managing these operations, having leased/rented the infrastructures of DOT

at Kadmat. It has also set up basic facilities in the uninhabited islands of Suheli Valiyakara,

Cheriyam and Thinnakara.

- 45 -

The number of voyages made by a passenger ship is decided based on its dry-docking

and annual maintenance schedules and the monsoon season. On an average these three ships

together are dry-docked and under maintenance for about 250 days a year.35

4.4 CO-OPERATIVE SOCIETIES AND TOURISM36

It is important to mention here that cooperative societies play a crucial role in the

Administration of Lakshadweep. Under Lacadive and Amini Island, Co-operative Societies

Regulation 1962, there are 55 societies registered. Each inhabited island has its own Marketing

and Supply Society. An apex society, the Lakshadweep Co-operative Marketing Federation

(LCMF) is responsible for procurement and supplies all materials through Island Marketing and

Supply Societies to its members. Majority of the natives are members of their respective island

society, and these cooperative societies, are in turn, members of the LCMF. The LCMF functions

at the mainland, Cochin, Calicut and Manglore, and supplies materials to all island societies

according to their need. The secretaries of these societies are government officials appointed by

the Registrar of Cooperative Societies, Lakshadweep. The societies receive grants and transport

subsidies from Lakshadweep administration, and also act as Public Distribution Retail outlets of

essential commodities to the poor people of Lakshadweep.

Apart from the above-mentioned societies, Lakshadweep has many other societies

registered with the Registrar of Co-operative Societies, Lakshadweep under the National

Government Act, the Society Registration Act 1860. Relevant provisions37 of the said act are

quoted below, verbatim:

35 Department of Ports, Lakshadweep. 36 XIth Plan Document, Department of Planning and Statistics. 37 Society Registration Act. 1860.

- 46 -

Section 1: Any seven or more persons associated for any literary, scientific, or

charitable purpose, or for any such purpose as described in section -20 of this Act, may,

by subscribing their names to a memorandum of association, and the filing the same with

Registrar of Joint –stock Companies form themselves into a society under this Act.

As per Section 20 of the Societies Registration Act 1860, the following societies may be

registered:

Charitable societies, the military orphan funds or societies established at the

several presidencies of India, societies established for promotion of science, literature, or

the fine arts for instruction, the diffusion of useful knowledge, [the diffusion of political

education], the foundation or maintenance of libraries or reading-rooms for general use

among the members or open to the public museums and galleries of paintings and other

works of art, collections of natural history, mechanical and philosophical inventions,

instruments, or designs.

Inspired by the success of these societies in associating with the native people, thereby

allowing the benefits of the developmental programs of government to reach the grassroots level

without disturbing the social fabric of the indigenous Muslim community in the Lakshadweep,

the Administration put up an organization to ensure the success of tourism: the Society for the

Promotion of Nature Tourism (SPORTS). Established in 1982 and registered under section 1 of

the Societies Registration Act 1860, its Chairman is the Administrator, U. T. of Lakshadweep.

The registration number of the Society is S. R. XLV. Its main objective is the promotion of

recreational tourism and sports in the U. T. of Lakshadweep.

4.4.1 Society for the Promotion of Nature Tourism and Sports (SPORTS)

The Lakshadweep Administration’s entirely different socio-economic, environmental and

administrative constraints prompted it to try to evolve a new organization to promote eco-

- 47 -

friendly tourism in the Lakshadweep. The impossibility of changing or even creating a new post

in the DOT, because the power to do so is vested in the National Government, also convinced the

Administration to establish SPORTS to manage and promote tourism activities in the

Lakshadweep. This effort of the Administration shows how the DOT requires professionalism

and flexibility for the effective utilization of resources.

4.4.1.1 Organizational Set-up of SPORTS38

Under the Lakshadweep Administration, SPORTS, a society fully funded by the DOT,

was set up to act as a flexible nodal agency for tourism operations in Lakshadweep. Tourism

officers are tasked to serve as its Deputy General Managers (DGMs). Its organizational chart is

presented in figure 4.3, Annex 8. Presently, it has 87 employed staff.

Six members of the Board of Directors of SPORTS are heads of the following

departments: Tourism, Industries, Public Works, Ports, Collector and Registrar of Co-operative

Societies. The Administrator acts as Chairman, while the Secretary of the DOT acts as its

Managing Director. Four tourism officers and three water sports instructors of DOT work with

SPORTS, to which DOT has transferred tourism infrastructure on rent or lease. SPORTS has, in

turn, leased tourism infrastructure to private tourist operators who provide and manage tourism

facilities at par with international standards.

4.4.1.2 SPORTS as the Administration’s Hospitality Wing39

The society has been acting as the hospitality wing of the Administration. Since 2003,

SPORTS has been managing the State Guest House, Kavaratti. Its activities have yielded not

only additional revenue for the society, but have also guaranteed employment for 36 local

unemployed youths. Efforts are on to bring forth the operation of Minicoy and the Agatti Dak

38 Department of tourism, Lakshadweep. 39 Department of Tourism, Lakshadweep.

- 48 -

Bungalow and Lakshadweep Bhavan New Delhi under SPORTS. Such moves would offer direct

employment to nearly 50 local youths in the hospitality industry. SPORTS also looks after the

catering requirements of visiting dignitaries.

4.4.1.3 Lessees of SPORTS40

1. Mr. T. Muthukoya: SPORTS leased the Agatti Island Beach Resort to Shri T

Muthkoya of Amini Island for a period of five years on 1st November 1996. Lease of the resort

to SPORTS by the Lakshadweep Administration had expired by then. Then when the lease to

Shri T Muthkoya expired in 2001, the Lakshadweep Administration intervened, citing the fact

that the property belonged to the government. Accordingly, Shri Muthkoya was directed to remit

a lease rent of Rs. 800,000.00 per annum directly to the DOT, rather than to SPORTS, starting 1

November 2001.

On completion of lease period, Shri T Muthkoya filed a case in the District Court,

Kavaratti regarding the operation of the resort as the lease was not renewed for the next five

years. After detailed deliberations, the lessee was allowed to renew the lease for a period up to

31 October 2011, subject to the fulfillment of certain conditions. The terms and conditions were

not acceptable to Shri T Muthukoya.

The court passed an order to renew the lease up to 31 October, 2011. However, the lease

agreement had yet to be signed by the lessor and the lessee.

2. Casino Group of Hotels: The Bangaram Island Resort (BIR) resort started

operations in 1974. Since then, it has catered to international tourism exclusively. The Hotel

Corporation of India managed the island resort until 1982. On 22 October 1988, the Casino

Group of Hotels, Cochin entered the field of Lakshadweep tourism through a lease with

SPORTS, to operate the Bangaram Island Resort. Since then, the Casino Group of Hotels has

40 Ibid.

- 49 -

been operating Bangaram. It has since renamed its hotel chain to CGH Earth (Casino Group

Hotels). The CGH group is paying an average of Rs5.5 million per annum to SPORTS.

3. Lacadives: The Mumbai-based tourist establishment focuses mainly on diving

operations. It runs one dive shop in Kadmat and another in Bangaram. The Kadmat dive shop is

leased from SPORTS, while the Bangaram one is leased from CGH.

4.5 LINKAGE WITH THE NATIONAL TOURISM ORGANIZATION

The Ministry of Tourism and Culture, Government of India, is the nodal ministry for the

formulation of developmental and regulatory policies with regard to tourism. That this is so is in

accordance with International and National Laws. Like other states/UTs, Lakshadweep has no

Legislative Assembly to make state level laws. Instead, state and union territories submit their

policy proposals for new developments to the Ministry of Home Affairs (MHA) for approval.

The Administrator, who is the Head of State, represents Lakshadweep in all policy making

deliberations pertaining to it.

At the national level, a corporate body, India Tourism Development Corporation (ITDC),

promotes and manages tourism under the Ministry of Tourism, Government of India. ITDC

assists states/UTs in the conduct of skills development programs for tourism professionals

through its nationwide network of 14 training institutions dedicated to hotel management and

catering services. Similarly, all state Government/UTs haves State Tourism Development

Corporation to promote and regulate the tourism sector in their respective state/UT, except in

Lakshadweep. These corporate bodies are public sector entities under the Department of Tourism

of the concerned state/UT. They seek to inculcate flexibility and professionalism in the tourism

sector so that it would be run like a business organization.

- 50 -

4.6 THE XIth DEVELOPMENT PLAN (2007-2012)

The basic objective of the XIth five-year plan is to build a strong infrastructure base for

the development of tourism in Lakshadweep. In the course of the implementation of the plan,

transport facilities, accommodations, and training will be improved. The DOT will be

strengthened to manage tourism in a larger and better way.

4.6.1 Schemes

The proposed outlay for the following six schemes under the XIth five year plan41 is

Rs7539.897 million. Details given in Table 4.2 indicate higher goals relative to those set under

the Tenth Plan.

Table 4.2: Proposed Outlay for the XIth Plan(Rs in millions)

Table 4.2

Proposed Outlay at a Glance (Rs. In millions) Sr No. Name of

Scheme

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

Total

1 Human Resources 8.6 10.04 12.54 13.0 14.4 58.58

2 Tourism Marketing and Promotion

10.0 11.5 12.02 13.3 14.5 61.32

3 Opening of More Islands for Tourism

10.0 11.314 12.216 13.5 14.8 61.83

4 Public/ Private Participation in Tourism

8.0 10.02 12.0 13.8 15.0 58.82

5 Strengthening of Tourist Transport

110.0 655.219 1600.0 1800.0 2000.0 6165.22

6 Infrastructure/Civil Works

153.4 100.0 169.554 331.29 379.884 1134.13

Total 300.0 798.093 1818.33 2184.89 2438.58 7539.9

Scheme No. 1: Human Resource Development - The primary functions of the

Department are to develop and strengthen the infrastructure base for tourism development in

41 XIth Plan Document, Department of Tourism, Lakshadweep administration.

- 51 -

Lakshadweep. The DOT functions without a single Group A or B officer, except for the ex-

officio Director. New posts will be created and filled up during the plan period, and the much-

needed training of the staff will be conducted. The development of Lakshadweep as a water

sports destination has been proposed, along with the procurement of water sports equipment for

the newly opened tourist centers. The total proposed outlay for the scheme’s implementation is

Rs5.858 million.

Scheme No. 2: Tourism Marketing and Promotion - In Lakshadweep, it is even more

inevitable than in the mainland that the potential tourists are not only informed about the

facilities available but that they are also educated about the fragile ecosystem of these islands.

Therefore, the department will undertake to streamline tourism marketing vigorously through

exhibitions, seminars, fairs, etc. Total plan outlay for the scheme is Rs61.32 million.

Scheme No. 3: Opening of More Islands to Tourism - Encouraged by the Bangaram

model of development, the Lakshadweep administration obtained the approval of the Ministry of

Tourism, Government of India, for the development of tourism in two uninhabited islands:

Thinnakara and the Cheriam islands. Land will be made available to the resort at concessional

rates, i.e., 9 percent of the land value so that the viability of the projects would not be affected.

Appropriate decisions with regard to the opening of more islands for domestic tourism, i.e.,

Amini, Kiltan, Chetlat, Bitra and Androth, were to be made. The proposed outlay for the scheme

is Rs61.83million.

Scheme No. 4: Public/ Private Participation in Tourism - The market for handicraft

items for tourists will be developed to provide employment opportunities for the youth and the

women. The entrepreneurs will be extended a grant of approximately 50 percent of the

construction cost of the shop. The individual entrepreneur should put up the remaining 50

- 52 -

percent. As the nodal agency, SPORTS will carry out tourism functions in Lakshadweep. The

proposed outlay for this scheme is Rs58.86 million.

Scheme No. 5: Strengthening of Tourist Transport - The Lakshadweep Administration

has no tourist ship/boats/helicopters exclusively for tourists, who are thus transported from the

mainland to the island by the MV Tippu Sultan Passenger Ship, along with the local passengers.

For this reason, the administration has included provisions in the XIth plan for the acquisition of

speedboats and helicopters, and a big cruise ship dedicated to transporting tourists. The proposed

outlay of Rs6165.22 million for this scheme is expected to strengthen transport.

Scheme No. 6: Civil Work - The Department of Tourism has been functioning since

1988 without a separate office building. The Administration has thus proposed the construction

of a separate building and of huts, health clubs, bathing huts, etc. on islands, where the

development of tourism has been recommended. It has also been proposed that information,

tourism and cultural cum convention centers be opened at Lakshadweep Bhawan, New Delhi to

facilitate the presentation of a “virtual Lakshadweep” to all concerned stakeholders, tourists,

investors and media. Total proposed outlay for this scheme is Rs1132.84 million.

- 53 -

CHAPTER 5

PERFORMANCE AND FUTURE OF THE TOURISM SECTOR

5.1 PERFORMANCE

Analysis of data for the assessment of the performance and achievement of the tourism

sector is important to instituting improvements and future planning. It is also necessary to study

the external environment to be able to appreciate the effects of external forces, resources, and

other important legal issues relating to the development of tourism.

The people of Lakshadweep constitute an indigenous tribe with unique social values and

customs. The place is a rare case where so many elements are scarce and even the population

density is high at 1,894 per square kilometer. The achievement of government’s Tenth Plan in

terms of budget utilization and physical targets is given in Annex 9. Macroeconomic indicators

like the level of growth of tourism and the reduction in employment exhibit a direct impact on

the achievement of the overall goal of government, i.e., the attainment of a self-reliant economy.

Similarly, an analysis of organizational performance indicates the level of efficiency and

effectiveness of the DOT in the utilization of resources. Therefore, it appears necessary to study

the trend of tourist arrivals in Lakshadweep to better appreciate the other constraints to

development.

< 5.2 TOURIST ARRIVALS

Performance in terms of tourist arrivals can be seen in table 5.1 and figure 5.1. In figure

5.1, it appears that the increase in tourist arrivals from 2588 during the period 2004-2005, to

15,203 during the period 2005-2006 is due to the operation of the Star Cruise. The breakdown of

foreign and domestic tourism from1992-2002 is given in Annex 10.

- 54 -

Tourism sector growth was very erratic until 2000-2001 when it averaged between 2 and

3 percent rather than the projected growth of 7 to 9 percent.

Table42

: 5.1 Figure 5.1: Tourist Arrivals from 1992-1993 to 2006-2007

The trend in tourists inflow clearly establishes the negligible rise in tourist arrivals and

its decrease from 1998-1999 to 2001-2002. Inadequate accommodations and transport facilities

have been identified as the main causes of such erratic growth. On the other hand, the sudden

increase in arrivals from 2005 onwards is credited to the commencement of Star Cruise

operations that allowed tourists to stay on board the ship during the night.

5.3 CONSTRANTS TO TOURISM DEVELOPMENT

The Government of India has allocated a sufficient budget for tourism development and

provided subsidies for food and transport to the Lakshadweep. It supplies all food, grain, oil, and

other essential items at reasonable prices, through distribution networks consisting of cooperative

societies in each island.

-

5,000

10,000

15,000

20,000

25,000

1992

93

1993

94

1994

– 95

1995

– 96

1996

– 97

1997

– 98

1998

– 99

1999

– 00

2000

– 01

2001

02

2002-

03

2003-

04

2004-

05

2005-

06

2006-

07

Year

To

uri

st

152032005-06

21,522 2006-07

2,588 2004-05

4,703 2003-04

5,004 2002-03

3,798 2001 02

3,863 2000 – 01

2,120 1999 – 00

2,735 1998 – 99

4,123 1997 – 98

4,861 1996 – 97

4,680 1995 – 96

4,225 1994 – 95

3,373 1993 94

3,437 1992 93

TotalYear

Table -Tourist arrivals, 1992-2007

152032005-06

21,522 2006-07

2,588 2004-05

4,703 2003-04

5,004 2002-03

3,798 2001 02

3,863 2000 – 01

2,120 1999 – 00

2,735 1998 – 99

4,123 1997 – 98

4,861 1996 – 97

4,680 1995 – 96

4,225 1994 – 95

3,373 1993 94

3,437 1992 93

TotalYear

Table -Tourist arrivals, 1992-2007

1 Source: Lakshadweep Administration’s Web Page://lakshadweep.nic.in/Tourism.PDF

- 55 -

But literacy rate is 87.5 percent and employment opportunities in government jobs are

very limited. The development of industries is slowed down by environmental constraints and

the scarcity of raw materials. Agriculture cannot be developed as much either due to the paucity

of land and the soil quality, which effectively limits agricultural opportunities to coconut

production.

While some laborers are engaged in coir twisting and fisheries, inadequate pricing of

their produce due to the inaccessibility of the market does not make the sectors lucrative. Fish

catch at present is 12,800 tons. Further, these sectors are not able to provide employment to the

educated youth.

As per census 2001, total labor engaged in Lakshadweep is 26 percent, inclusive of 3

percent marginal labor. The percentage of unemployed persons registered in the employment

exchange is 12,700 or around 19.5 percent of the total population.

In view of above data, it appears that the high unemployment problem is due to limited

job opportunities, leading in turn to low values for local products due to the lack of

customers/markets for their products. This predicament has forced the locals to contend with a

vicious cycle of poverty. The need to align the development of various sectors to achieve the

mission/objectives of the Lakshadweep Administration is apparent.

It is also important to analyze how best to achieve the objectives of the Lakshadweep

Administration in view of the basic interconnected issues mentioned above. It is necessary to

acknowledge that tourism is core to having a self-reliant economy in Lakshadweep.

As mentioned earlier, the 2 to 3 percent growth of the tourism sector which was lower

than the expected 7-9 percent failed to provide job opportunities for the unemployed youth in

Lakshadweep. Therefore, the Low Growth of the Tourism Sector is the core development

problem of Lakshadweep, as shown in the Problem Tree in figure 5.2.

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It is also clearly inferred from the Problem Tree that the four major constraints to

development are the weak institutional set-up, low returns on resource utilization and lack of

backward/forward linkages, inadequate infrastructure development in all islands, and threats to

the ecosystem. These four constraints have caused the low growth of tourism that has in turn

resulted to the slow growth of the economy of Lakshadweep. Similarly, the cause of these

problems can be inferred from looking at the Problem Tree downward. The Problem Tree

explains very well the cause-effect relationships of various constraints leading to the low growth

of tourism in the islands. These are discussed as follows.

1. Weak institutional set-up: There is no corporate body to manage and utilize

resources effectively, because SPORTS is managing all infrastructure on a lease basis.

Top management of SPORTS consists of DOT officers and lower level staffs are

employed by SPORTS itself. Both these organizations’ lack of professionalism and

shortage of skilled manpower have been blamed for the slow development of tourism.

Ever since resources were transferred to SPORTS, which further transferred these

resources to private parties for managing on a sublease basis, a delay in the lease renewal

was experienced, while low returns on resources resulted for the DOT. For instance, the

lessee of AIBR managed to extend the lease without any lease enhancements effected in

the last ten years.

2. Low return on resource utilization and lack of backward and forward

linkages: As the DOT forged long-term leases of its resources with private parties, it

failed to benefit much from revenues of new distinct products like water sports. Further,

marketing promotion was not explicitly directed at high class and rich tourists for

differentiated products in the domestic western region of India. Since, tourism operations

were handled by different entities, labor’s increased participation in tourism activities

- 57 -

was curtailed and unemployment increased. The market could not be developed, thereby

allowing the low value of local products like handicraft, coir and fish and coconut-based

products to persist.

3. Inadequate infrastructure in all islands: Available accommodations

equivalent to 184 beds were not sufficient for water sports institutes, which could not, in

turn, utilize the insufficient accommodations. Delays in the expansion to other islands

also added to the slow growth of tourism, as did the insufficiency of air and sea transport.

DOT did not undertake marketing promotions of products because products pricing and

use were under the purview of SPORTS and its lessees. These arrangements further

lowered the returns on resources for DOT.

4 Threat to the Ecosystem: Insufficient coordination between the DOT and the

environment and forest agencies increased the chances of environment degradation. So

did the lack of people’s participation, the low involvement of NGOs and social groups.

The distinct and highly sensitive culture of the Muslim also obstructed participation in

tourism development. The absence of an institutional arrangement to protect marine life

and promote solid waste management likewise created major threats to the ecosystem.

Constraints like the lessee and lessor relationship between DOT, SPORTS and tour

operators were subject to the adjudication process. The adoption of the existing lease agreements

ignores all accountability to the Government of India. The rich cultural heritage has not been

documented, so this could not be shared with tourists. Traditional skills in preserving marine

biodiversity have not been utilized. The aforementioned constitute institutional failures.

There is an urgent need to integrate the three ecosystems--lagoon, sea and landmass-- for

the sake of sustainable development. This could be done using information from various national

and international studies, and from the experiences encountered in the course of developing the

- 58 -

Coral Islands. Having one agency like the Department of Environment and Forest undertake

environment and ecology protection by itself is ill-advised. Taking a holistic approach in the

sustainable development of tourism or any other sector in the Coral Islands of Lakshadweep

would be more prudent. Marine life is put at risk by development activities, especially water

sports, and by the waste_disposal of solid and garbage by various forms of transport and tourists,

because Lakshadweep is home to live corals. It is the second largest atoll with only 32 square

kilometers of landmass.

FIGURE 5.2. Problem Tree: Sustainable Development of Tourism in Lakshadweep

Low Growth of Tourism Sector

Weak Institutional set up

Low return on resource utilization and lack of backward/forward linkage

Inadequate Infrastructure in all Islands

Threat to Sensitive ecosystem

No Corporate business entity

Shortage of skilled Manpower

No value addition in all products

Limited air/Sea Transport

Less tourist Accommodations

Poor Marketing Promotion

No Institution to preserve Marine Biodiversity

No Mechanism to Associate & Preserve Social Culture & People/NGOs

No Solid Waste Management System

No Development of Market for Products

Less opportunity for employment

Low Mobility of Native Population

High Unemployment & High Poverty

Low Coordination of Environment & Forest Agencies

Causes

Effect

- 59 -

The weaknesses and strengths of the organization can be analyzed using a diagnostic tool

like the 7- S Model.

5.4 ANALYSIS OF ORGANIZATIONAL PERFORMANCE

Leaders and consultants often use the 7-S framework to help them capture the

multiplicity of factors that shape an organization’s behavior and performance.43 The 7-S

framework, which emerged from a stream of researches for analyzing organizations, was

developed by a team of McKinsey & Company consultants, the Harvard Business School and the

Stanford Business School. It has been used to analyze the DOT’s operations as follows:

5.4.1 Strategy

DOT does not have any strategic approach for marketing its products on a competitive

basis because it operates through SPORTS. The DOT has plans to expand tourism

infrastructure/resorts to more islands, namely, Thinnkara and Cheriam; to uninhabited islands in

the pattern of Bangaram Island for international tourism, and to the inhabited islands of Amini,

Kiltan, Chetlat, Bitra and Androth for domestic tourists. No cost-benefit analysis has been done

and expenditures are being made on the presumption that tourism will create employment

opportunities for native educated youths. No inference was made with regard to the extent of

benefits given to natives in the form of job creation in tourism or its allied sectors, like the

development of markets, the participation of locals in tourism, etc. The XIth plan also stipulated

that loan schemes would be extended to natives so they could construct shops for selling their

products to tourists. However, no strategy was made available to show how this scheme would

be executed. Neither has a strategy been formulated to promote the locals’ products in the market

nor to launch new ones to attract tourists to utilize infrastructure.

43Harvard Business School (9-497-045) , ‘Organizational Alignment: The 7-S Model’, Rev. November 19, 1996.

- 60 -

The DOT has not been able to accelerate the development of tourism in line with the

major goals of the Lakshadweep Administration, i.e., the creation of a self-reliant economy

through sustainable development. The strategy to align goals with the preservation of ecology as

determined by the environment authorities for the mitigation of the impact of waste disposal on

marine life and coral islands does not exist, even if ecology protection is the most important

issue in the development of eco-friendly tourism as per the Lakshadweep Administration’s

mission statement.

There is no strategy for targeting high-end tourists, especially foreign tourists and rich

domestic honeymoon couples from Bangalore, Goa, Kerala and other domestic/international

jump-off points to Lakshadweep, to balance population tourist ratio vis-à-vis national standards,

and to get high returns for the use of the pristine beauty of the Virgin Islands without disturbing

the ecology. There is also no strategy to ensure that organizational functions comply with

international laws.

5.4.2 Structure

The DOT has a hierarchical form of organization and the Administrator, Secretary and

Director are civil servants who function on a division basis rather than specialize, being as they

are top management. Lower-level officials/managers who specialize in tourism work with

SPORTS make the DOT a network-like organization.

Its association with SPORTS through a lease system makes porous boundaries for DOT,

thereby creating confusion across the different functions and causing mismanagement due to

function overlaps.

The top managements of DOTS and SPORTS’ sharing dual responsibilities results into a

very weak system of governance. The DOT is left with the tasks of planning and budget

disbursement without any accountability mechanism that would allow it to check the practices of

- 61 -

tour operators and SPORTS offices. There is no mechanism pertaining to the welfare of

employees in the tourism sector to ascertain whether such employees receive remuneration

corresponding to their work or not.

The DOT does not even have a separate building for its office, so that the construction of

one for its exclusive use has been proposed by the XIth Plan. The same plan has proposed the

creation of a cultural and publicity center at Lakshadweep Bhawan, New Delhi.

Working conditions are very hard for the staff because harsh weather conditions disrupt

the supply of food articles and vegetables during the rainy season, given that everything has to be

procured from the mainland. Sometimes, even vegetables are not available during the rainy

season. However, there is no pollution in Lakshadweep so that everyone can fully enjoy the

beautiful beaches and marine life.

5.4.3 System

There is no system within the DOT to facilitate the efficient management of tourism

through the effective utilization of resources. Its lessee arm is similarly full of weaknesses, being

managed as it is by borrowed staff from the DOT. Other employees of SPORTS are not

professionally competent to be able to add value to tourism products. As for the earlier lease,

there has been no enhancement of lease/rents in the last 10 years, resulting to losses on the part

of government. Operating through SPORTS has also created confusion and legal complications

for DOT. Those who benefit from the arrangement without promoting the participation of the

native people are the private individuals. As things stand, the Department of Tourism has very

good and modern developed infrastructure that meet international standards like-AIBR, BIR

Island resorts. But these are leased to private parties by SPORTS. Further, performance measures

and rewards systems do not exist in the organization so that employees receive no more than

- 62 -

regular government salaries at par with those who work in other government departments. There

have been no serious efforts to re-engineer the DOT to revitalize its functioning either.

The financial performance of DOT, SPORTS could be gleaned from the following:

5.4.3.1 Financial

The Department of Tourism has beautiful resorts like AIBR, Agatti, BIR Bangaram,

Kadmat, Kavaratti and Minicoy that have been transformed into water sport diving centers

equipped with modern facilities. All these resorts were built using government funds exclusively

and then leased to SPORTS. Details on the lease/rent revenue (Rs. 9.09 million per annum) they

generate are shown in table 5.4.

Income of DOT- Income44 from the tourism sector accrued from the lease of facilities

by the DOT, Lakshadweek to SPORTS are presented in the table 5.2. The lease/rent rates have

remained constant throughout almost 10 years.

Table 5.2: Estimated Revenue from Lease/Rent to DOT

Sr.

No.

Name of Resort/Hut Lease/Rent per

annum (in Rs.

Millions)

Remarks

1 Agatti Beach Island Resort 0.8 Lease 2 Bangaram Beach Resort 5.5 Lease 3 Kadmat Beach Resort Rent Rs. 20,000 per

month 4 Minicoy Beach Resort 2.65 if occupancy is

full Rs 250 for room and

Rs 750 for dining per day for 26

cottages 5 Kadmat and Bangaram Diving

centers 0.14

6 Kavaratti Beach Resort Nominal, No figure 7 Total Lease /Rent 9.09

Income of SPORTS: Income generated from other tour packages managed by SPORTS

44 Sent by Mr. A . M. Hussain, Tourism Officer, Department of Tourism, Lakshadweep.

- 63 -

and tariffs for travel and night stay are paid to the Department of Port and to the Star Cruise Line

operators by SPORTS. Details on the different tour packages are not available in the DOT but

revenue generated by SPORTS from Star Cruise was Rs20 million in 2006-2007. SPORTS

further leased infrastructure to private tour operators who organized tour packages.

Details on the gross profit of SPORTS from financial year 1996-97 to 2000-01 as of 31st March

2001 are shown in table 5.3. Details45 on the percentage income breakdown from different

activities are as follows:

(a) Package tour collections: 49 percent, (b) Lease rent, royalty, etc.: 23 percent (c) Catering and related activities: 10 percent, (d) Water sports, scuba diving, etc.: 2

percent e) Miscellaneous income (interest from FD, income tax refund, rent, etc.): 16 percent

Table: 5.3- The income and expenditure patterns from 1996-1997 to 2000-2001

(in Rs millions)

Year Income Expenditure Gross Profit 1996-97 23.98 16.287 7.641 1997-98 27.976 10.680 17.296 1998-99 27.613 18.911 8.725 1999-00 12.704 14.340 - 1.6.36 2000-01 29.888 18.570 11.318 2001-02 33.489 23.950 9.539

Source: SPORTS, Lakshadweep

Further, SPORTS income from lease/rent and package products is but 23 percent and 49

percent of total revenue respectively, despite tariffs paid to the Department of Shipping,

Government of India. These indicate that package products have the potential to generate

revenue. Similarly, income from water sports is shown to account for only 2 percent of

SPORTS’ total income from these distinct products.

45 SPORTS, Lakshadweep

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Incomes of Lessee - Lessees charge US$240 and US$470 average per day for one double

room in Agatti and Bangaram islands, respectively. Actual tariffs for AIBR/BIR charged by the

Casino Group Hotel are given in Annex 7 and 7A. It is clear that Bangaram, Agatti Resort

facilities and water sports facilities are at par with international products/resorts in the same

category. The projected income statement as per tariff fixed by the Casino Group of Hotels is

shown in table 5.4. It shows that a profit earned by the lessee in lieu of lease of Rs. 5.5 million is

six times of lease/rent. The estimated income statement of BIR is sufficient to estimate actual

revenue generated from DOT‘s tourism resorts which are presently on lease to CGH through

SPORTS.

Table 5.4: Estimated Income Statement of BIR Estimated Income Statement of BIR

Lease from BIR to DOT per annum =Rs 5.5 million In USD

Assume occupancy 70 percent and 250 days tourist days

BIR Tariffs $ 290 to $650 per day for double bed as per Annex 7A

470 Avg

Assume 55 percent operating cost including Salaries, Total Cottage at Bangaram – 30

A- Total Gross Revenue in a Year 2467500

B- Salary and Administrative Expenses 108140

C- Operating and Maintenance Costs 1233750

Total Operating and Maintenance Costs (B+C) 1341890

Gross Profit A-(B+C) 1125610

Corporate Taxes @ 30 % 337683

Net Profit 787927

In Rupees (1 USD =Rs.43) As of 23 May 2008 33880861=Rs.33.88Million

Lease per annum to DOT in Rs. 5.5 Million

Estimated difference between lease to DOT and net income of BIR per annum in Rs.

28.38 Million

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5.4.3.2 Xth Plan Budget Expenditure

The financial allocation46 for the Tenth Five-Year Plan (2002-2007) was Rs 501.55

million, as given in Table 2, Annex 4. But actual financial allocation was increased to

Rs1062.88 million for the Xth Plan. Actual financial and physical targets for the Xth Plan, along

with achievements for each scheme, are shown in detail in annex 9.

Performance measurements are given in terms of funds utilization during the plan years,

but no return on investment in DOT as per achievement presented in Annex 9 is shown. For

example, actual equity participation of Rs60 million with LDCL under scheme 4 is shown

against the original plan outlay of Rs13.5 million given in table 2 in Annex 4. This example

shows that funds allocated for tourism development were used as equity with LDCL in the

absence of strategic planning for tourism development. Similarly, Rs 67.28 million was used

under scheme 1 for the procurement of water sports equipment and the training of 144 personnel,

whereas DOT has no such large number of staffs and all water sports infrastructure are on lease

to different lessees through SPORTS. Data show the lack of accountability in the use of funds

and the non-existence of performance measurement systems in the DOT.

Presently, the XIth Plan is in progress. An outlay of Rs7539.89 million has been

proposed for the development of tourism. There is a provision in Scheme 1 for the development

of infrastructure and human resources, but nothing is mentioned about the type of infrastructure

and the requirements of professionals and skilled staffs. Scheme 6 speaks about civil works,

which actually refer to infrastructure, and there is provision of Rs1132.841 million for the

development of new infrastructure.

For marketing promotion under Scheme 2, proposed outlay is Rs61.32 million, but the

scheme mentions that tourists will be educated on eco-fragile ecology through exhibitions.

46 XIth Plan Document of Department of Planning &Statistics (2007), Lakshadweep Chapter on Tourism.

- 66 -

Government, for its part, stipulated separate provisions for the Department of Environment to the

tune (in the amount) of Rs1053.71 million for environmental protection.

The Department of Tourism could not utilize the allocated fund under the Tenth Plan.

Increase in tourist arrivals was due to the private ventures of cruise liners, and revenue generated

was for the account of SPORTS rather than the Government of Lakshadweep. Therefore, the

goal set by DOT is not clear and the measurement of output is not possible due to the DOT’s not

setting clear enough goals and performance indicators for its lessee.

5.4.4 Staffing

As already mentioned, the Administrator, Secretary and Director of the Lakshadweep

Administration are responsible for setting the direction and policy making functions, but they

cannot devote much time to monitoring and supervising the regular functions of the DOT

because they are busy in various other priority areas of administration.

The Director who is the head of DOT is also in ex-officio capacity, in addition to his

other designations. There is no sanctioned post of Director to provide direction and supervise

work at the DOT. The Director is assisted by one superintendent (Administration), an Account

Officer to look after the budget and disbursement of funds, and one Upper Divisional Clerk

(UDC). Five tourism officers and three sports instructors work with SPORTS. Targets have not

been attained in terms of human resource management and physical achievement, as mentioned

in Annex 9, which stipulated the filling of six posts but ended up in the filling of none. Similarly,

training was proposed for 325 personnel, but only half were trained whereas DOT does not have

sufficient staff as shown. This development shows that the training proposed was unrealistic.

The Government of India recruited officers and created lower staff vacancies through the

normal bureaucratic system of recruitment and selection, which was cumbersome and delayed

the recruitment process.

- 67 -

5.4.5 Skill

The DOT’s core competencies are the Bangaram and Agatti Beach Resorts, which meet

international standards with regard to facilities. Distinct skills are available at the Diving

Institute, Kadmat, Bangaram and Kavaratti, which have water sports facilities like snorkeling,

scuba diving, etc. The emergence of Star Cruise line operators in Lakshadweep is a recent major

achievement of Lakshadweep tourism.

The DOT is fully competent and can efficiently fund the development of infrastructure

through the Department of Civil Works, which can, in turn, complete tasks within the time frame

and advance further to the other islands. Still they need to learn to maximize the use of marine

biodiversity for sustainable tourism, amidst the available resources and ecological constraints.

5.4.6 Style

The Administrator and Secretary who are both government heads set the style. Their

functioning is purely authoritative and bureaucratic; rarely do they get the opportunity to meet all

the managers of all the resorts, which lessees operate under their supervision.

The decision-making process in the DOT is hierarchical so that everything is done the

way it is in any other government department.

5.4.7 Shared Values

The DOT has no corporate culture, but the vision of the Lakshadweep Administration for

the sustainable development of Lakshadweep through the participation of the local people

without disturbing the ecosystem of the area, serves as the guiding principle for obtaining the

budget allocation for tourism. As mentioned earlier, tourism has already been identified as a core

area for the development of the economy.

The people of Lakshadweep have high expectations of the tourism sector because the

other two sectors--fisheries and agriculture have limited scopes due to the scarcity of land and

- 68 -

the smallness of the market. The DOT’s main motto is to provide employment opportunities to

the local people through the development of tourism. The natives and the DOT have a shared

understanding that tourism can make for Lakshadweep a self-reliant economy.

The 7-S Model is a helpful tool for discerning the strengths and weaknesses of organizations, as

discussed herein.

5.5 ORGANIZATIONAL STRENGTHS AND WEAKNESSES OF THE DOT

A 7-S analysis highlights the areas that might limit the effectiveness and cause the

internal misalignment of the DOT. “Nonetheless, the 7-S framework, when used as a tool by

leaders and consultants to understand the strength and weaknesses of organization, can offer

powerful insights to guide management,”47 Here the tourism organization is the Department of

Administration of the Union Territory, Lakshadweep. The objective of government is to carry

out the development of the area in order to improve the quality of life of the people. In this

particular case, government wants to promote the tourism industry vigorously, through the

development of tourism activities via associating the people of Lakshadweep. Through the

territory’s sustainable development, the people can make the economy self-reliant.

The strengths and weaknesses inferred from the performance analysis of the DOT are

discussed in following sub-sections.

5.5.1 Strengths

1. Bangaram Island Resort is a successful model for the development of tourism in

uninhabited islands and for the opening of international tourist spots that meet international

standards. Other resorts and huts in various islands with water sports facilities have

established their reputation, among them resorts that are presently on lease to different tour

47 Harvard Business School (9-497-045), ‘Organizational Alignment: The 7-S Model’ , Rev. November 19, 1996.

- 69 -

operators. The Tourism Department’s efforts to promote eco-friendly tourism were

appreciated at the international tourism bourse in Berlin, Germany. Water sports and PADI

training courses, are available in various islands like Kadmat, Kalpeni Minicoy,and

Bangarm, along with the distinct skills of the native employees. The Star Cruise Line

operations constitute a recent achievement. Package tours have been successful.

2. Financial assistance from the Government of India for the development of Lakshadweep

along with a subsidy component strengthens the resource base of DOT. Total proposed

outlay per the XIth Plan is Rs7539.897 million for the development of tourism in

Lakshadweep.

3. SPORTS have gained experience, knowledge and skills through tourism-related impact

activities, in conducting awareness programmes on the importance of preserving

biodiversity, and in organizing training programmes for water sports personnel as per

sections 1 & 20 of the Society Registration Act 1860. SPORTS can provide valuable

support to the DOT in protecting the ecosystem for the sustainable development of tourism.

4. The DOT works under the Administrator of UT of Lakshadweep, who is appointed by the

President of India as a constitutional head with the power to frame rules for the affairs of

the Lakshadweep Administration, within the guidelines set by the Government of India. It

provides flexibility compared to other states/UTs and minimizes delays in functioning.

5. The experience of using eco-friendly thatched roofs for cottages and solar energy, the

acquisition of high-speed vessels/boats and the plan to acquire ships and a helicopter are

worthwhile moves.

6. The national government’s approval of expansion to uninhabited islands and the proposal

of DOT to expand to other inhabited islands provide scope for the future development of

tourism in the Lakshadweep.

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5.5.2 Weaknesses

1. The DOT is headed by an ex-officio director under an ex-officio secretary, who is also

charged with other responsibilities. Its role is confined to the implementation of plan

schemes and to expediting budget allocations from the Government of India. As explained

in Annex 9, the DOT could not meet the physical targets. The budgetary financial

allocation had increased from the proposed plan layout of Rs501.55 million to Rs1062.88

million under the Tenth Plan.

2. The DOT lacks professionalism. Tourism officers and water sports instructors are deputed

to work with SPORTS, and even the Director, the Secretary and the Administrator are with

the Board of Directors, performing dual functions for the sake of tourism. Top management

has experience and competency, but lacks professional support from middle and lower

management.

3. The DOT invests funds as per the Government of India’s financial rules. Hence, it is

accountable for adequate revenue generation and increased employment opportunities for

the native of Lakshadweep. But the DOT leased developed structures to SPORTS, which

further leased these to private tour operators who are gaining in real terms from these

resorts, paying as they are lease rates fixed ten years earlier under garb of court litigation.

Return on investment is very low for the DOT due to the modus operandi of SPORTS.

4. The DOT’s budgetary expenditure allocation for the Xth Plan (2002-2007) was Rs1062.88

million, whereas income of DOT from rent and lease is Rs9.09 million per annum

approximately. Performance is measured in terms of budget utilization, instead of rate of

return on investment.

5. SPORTS is a society registered under the Society Registration Act of 1860 and cannot be a

business organization as per provision of said act. This gives an opportunity to the lessee to

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exploit legal weakness in the court of law because society is also a lessee, not the owner;

and per mandate of said act SPORTS is not a business organization.

6. The DOT has transferred its resources and manpower to SPORTS, and does not have a

separate building for its office. Linkage with the environment and the marine agency is not

clear.

7. Six heads of departments of the Lakshadweep Administration under the Chairman are

members of the board of directors of SPORTS. The management of SPORTS is unable to

meet frequently because the Board of Directors, Chairman, Secretary and General Manager

look after the other functions of their respective departments, while the work of SPORTS is

managed by Deputy General Managers and lower level managers are unable to manage

tourism in a business-like manner and could not muster the much-needed impact of job

creation for the local people. A mechanism does not exist to ensure the people’s

participation either.

8. Corruption and malpractices cannot be checked in the functioning of SPORTS because it is

a separate non-government legal entity, being a society of some kind. Hence, it lacks

accountability.

9. The DOT lacks corporate governance and culture, just like the other states/UTs Tourism

Development Corporation created by their respective governments.

5.6 SCOPE FOR TOURISM ORGANIZATION

Along with internal alignment, organizations must also stay aligned with their external

environment (e.g., product and labor market, the socio-political environment). The internal

alignment must support the strategy of seeking opportunities and manage threats as per skill, to

ensure the effectiveness of the organization. Opportunities and challenges identified using the ‘7-

S’ analysis is elaborated hereunder.

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5.6.1 Opportunities

Lakshadweep is strategically located in the Arabian Sea, some 200 to 440 kilometers

away from Kerala mainland, which is one of the important ecotourism destinations in India. The

Lakshadweep lies along an international sea route connecting major international tourist

destinations, namely, Kerala, Goa, and Mumbai in India, Chagos, and Maldives, which are part

of the same eco-region of the Coral Islands. These major international tourist destinations can

provide high-value tourists to Lakshadweep, which has beautiful uninhabited Islands. Alongside

the uninhabited islands that have yet to be opened to tourism to provide employment to the local

people are five inhabited islands. Maldives is just 80 nautical miles from Minicoy Island, where

tourist accommodations have reached the 85-percent occupancy level. Star Cruise operates from

India’s business capital, Mumbai, and sails to Lakshadweep via the international tourist

destination, Goa. Bangalore is the biggest center of an eco-friendly corporate house, and its

potential of high-end tourists provides opportunities for the tourism sector.

All islands of the Lakshadweep have a rich marine life, inclusive of live corals, rich flora

and fauna. They offer vast potentials for water sports that allow the discovery of the pristine

beauty of Virgin Islands and vast lagoon areas. Various species of fishes, turtles, and a bird

sanctuary at Pitti Island are valuable assets for tourism.

Private tour operators, Kingfisher and Indian Airlines, Star Cruise Operators, Department

of Shipping, and all government departments, would like to exploit the potential for the

sustainable development of Lakshadweep, which could prove helpful to the development of

tourism. The islands have available 19.6 percent unemployed educated youth and 26 percent

labor force.

Local resource management of coir twisting, coconut-based food and seafood production

can cater to the needs of tourists, and can attract tourists to buy locally made handicraft items.

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The Government of India’s goal is to provide opportunities for the development of

natives of Lakshadweep, through various development programmes. On the other hand, the

Lakshadweep Administration is determined to provide all essential commodities through the

network of co-operative societies. It also encourages the people’s participation in the

development process without disturbing the sensitive social fabric. Subsidies are granted for

various activities including transport. Therefore, budgetary resources can always be availed of

from the national government to make the economy of Lakshadweep self-sufficient.

The unique and distinct culture of the matriarchal, indigenous Muslim society and the

history of advent of Muslim religion provide an opportunity for tourists to be acquainted with

these rich cultural heritage and values.

ITDC has programs/schemes to support states/UTs in the development of tourism

through the network of its training institutes. The Lakshadweep administration can register a

corporate body like the other states and UTs do, to manage tourism and a transport system in a

business-like manner.

5.6.2 Challenges

The biggest challenge is to preserve the sensitive ecosystem, which includes a rich

biodiversity and the eco-fragile nature of Coral islands. Also forming part of the challenge is to

associate the native people with the tourism sector without disturbing local cultural values. The

indigenous community may oppose tourism development if it will affect their social values.

The supply of essential commodities and other items to different uninhabited islands

including drinking water and essential services, like health, requires great effort to coordinate

and logistical support for the development of the tourism sector.

Scarcity of land is a major constraint that requires a balance in the population to tourist

ratio, especially in the inhabited islands. Special care should be taken in the uninhabited islands,

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like-the Pitti bird sanctuary, to preserve ecology. As per international convention and national

laws, the protection of the environment and the biodiversity of these areas is a major challenge.

Increase in waste and its disposal are likewise major concerns as there is no Solid Waste

Management program at present. To preserve the corals, all coastal areas should be protected

during construction activities and ship movements.

Rough weather is also a major challenge during the monsoon season from May to

September when continuous rains and high tides disrupt life in these islands, including transport

from the mainland to Lakshadweep and interisland. One helicopter is used for emergency

operations in these locations.

Finally, all development activities have to be done in consonance with local customary

laws and International/National laws on the protection of corals, biodiversity, and the

environment.

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CHAPTER 6

STRATEGIES FOR SUSTAINABLE TOURISM IN THE LAKSHADWEEP

6.1 GENERAL

As mentioned in Chapter 2, Lakshadweep is the smallest UT of India strategically located

in the Arabian Sea. It has a distinct Muslim culture interspersed with traces of the culture of the

mainland Hindu communities in India and the Muslim religion as practiced in Maldives. Native

inhabitants of the Lakshadweep are declared indigenous (ST). To its people the Government of

India has committed to improving the quality of life at par with the mainland.

Lakshadweep has a sensitive ecology with rich marine resources of a high atheistic value,

the preservation of which is a big challenge. In Chapter 3 various international and national

standards/laws were discussed, highlighting the importance of coral reefs to the tourism sector.

Threats to the coral atolls were also taken up in light of national and international tourism

experiences, the domestic and regional market, etc. in an effort to asses the position of the

tourism sector of Lakshadweep. In Chapter 5 that atolls are truly only resource for the

development of Lakshadweep was emphasized, while recalling how institutional weaknesses of

the Lakshadweep Administration as mentioned in Chapter 4 have delayed their positive

economic impact on the native people of the Lakshadweep. To reiterate, the vision, mission and

objectives as explicit in the XIth Plan document of the Lakshadweep Administration and

mentioned in Chapter 2 are: “To make the economy self-reliant through faster and sustainable

development to enhance the quality of life of people through people’s participation without

disturbing ecology of islands, lagoons, sea and, culture of natives of the Lakshadweep….” The

Administration’s overall objective is to promote a self-sustaining economy through the

development of agriculture, fisheries, tourism and industries for them to make a vital

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contribution to the national economy. Apparently, the sustainable development of tourism can

bring about the realization of the aforementioned objectives, vision and mission of the

Lakshadweep administration. That the schemes of government espouse the same substantiates

the crucial role of tourism in sustainable development of the Lakshadweep.

6.2 MEANS-END RELATIONSHIP IN THE TOURISM SECTOR

The constraints to the development of the overall economy were analyzed using the

Problem Tree, which showed cause and effect relationships of various factors leading to the slow

growth of the tourism sector which has, in turn, delayed the overall development of a self-

sustaining economy in the Lakshadweep. Using the Objective Tree to determine the means-end

relationships relating to the overall objective of sustainable development would help in the

solution of the Problem Tree.

The traditional strategic planning process recommends the use of the “end-ways-means”

Model48 for the plan of action. The first step per this model is to establish corporate objectives

(ends), followed by the development of a strategy (ways) for attaining them. Thereafter, one

should marshal the necessary resources (means).

Figure 6.1 explains how studying the means-end relationship helps in the solution of

problems identified in ‘Problem Tree’. As per the Objective Tree analysis, the core development

objective is the sustainable development of tourism in the Lakshadweep for the sake of

improving the people’s quality of life, reducing poverty and unemployment. The four major

objectives identified from the Objective Tree are discussed below.

K-1: Institutional strengthening: There is need to establish a corporate body to manage

tourism resources. It is also essential to recruit skilled manpower and professionals to manage

48 Robert H. Hayes, prof. of Management and technology at Harward business school “ Why strategic planning goes awry” from book-“Readings in strategic management” by Thompsons, Stricklands and Fulmer 2nd edition.

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the affairs pertinent to tourism organization to further enhance capacity and expand the reach of

tourism in the Lakshadweep.

K-2: Increasing rate of return: The participation of the people in the sale of local

handicrafts will increase tourism and ensure high values for local products due to market

development, through the provision of backward and forward linkages to fisheries, coconut and

other products.

The consolidation of tourism packages to inhabited and uninhabited islands will similarly

enhance the value of these products. But marketing promotion of these products is important to

attracting the rich and a particular nature lover, sea discoverers, Sun and sea oriented segment of

the tourism market.

K-3: Adequate infrastructures in all islands: At present, the six islands have but a 184-

bed capacity. This number should be increased and existing facilities expanded to other inhabited

islands and uninhabited ones. Existing sea transport and helicopter services, however, are not

sufficient to meet future demand. They thus need to be strengthened.

K-4: Preserving the ecosystems: There are three ecosystems: the sea, the lagoon, and

land. Sustainable development requires adopting an integrated approach to preserve these

ecosystems. There should be a mechanism to associate distinct social groups and NGOs in the

development of tourism, without affecting their social fabric. It is also important to have

institutional mechanisms for solid waste management and preserving marine biodiversity to

ensure sustainable development. Establishing a co-ordinating mechanism between the

environment and forest agencies for a holistic approach is crucial.

It can be inferred from the Objective Tree analysis that a holistic and integrative approach

will provide opportunities to develop a strategy for the sustainable development of tourism in the

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Lakshadweep. Therefore, it is necessary that a plan of action to achieve the four, above-

mentioned major objectives be made to increase growth in a sustainable manner.

FIGURE 6.1: Objective Tree-Analysis for the Sustainable Development of Tourism.

Environmental scanning, be it internal or external, can make its soundest contribution to

strategic planning when it provides perspectives from both the macro/long-term and micro/short-

term analysis. Strategic issues have emerged from the assessment of opportunities, threats to the

external environment, and the weaknesses and strengths of the internal environment of the

tourism sector. Logical connections should be established for the development of a strategic

Sustainable development of Tourism

Strengthen Institutional set up-K-1

High Return to Investment- K-2

Adequate Infrastructure in all Islands- K-3

Preserve Sensitive ecosystem- K-4

Establish corporate business entity

Recruits Profess. and Training to Existing staff

Consolidate distinct Products & promote people part

Improve Air/Sea Transport

Increase tourist Accommodations

Improve Marketing Promotion

Institutionalize to preserve Marine Biodiversity

Establish Mechanism to Associate & Preserve Social Culture & People/NGOs

Establish Solid Waste Management System

Development of Market for Local Products

Increase in Employment Opportunities

Integration of Society with Mainland Societies

Sustainable Development, Low

poverty, improved quality of life

Mechanism of Coordination with Environment & Forest Agencies

MEANS

END

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framework. A SWOT matrix will be relevant and useful to developing strategic options for the

achievement of the identified objectives.

6.3 STRATEGIC OPTIONS

The use of SWOT analysis to identify strategic issues can be justified on the basis of a

proposition that the key strategic issues can emerge from the fit or tension between an

organization and its environment, rather than from the gap between its goals and the actual or

projected performance. This is consistent with those definitions of strategic management which

see it as the management of the relationship between an organization and its environment

(Ansoff 1968, 18; Kay 1993, 335).49 Assessment of SWOT is arranged in Table 6.1, in order of

importance of the strategic actions from sections 5.5 and 5.6 of Chapter 5.

Four major objectives were identified in the objective analysis. These are denoted as K-1,

K-2, K-3, and K-4 in the Objective Tree. These are also shown in the SWOT matrix against each

relevant option, which will be adopted for strategic action. Strategic issues were identified by

considering the interaction of opportunities/threats and strengths/weaknesses in the SWOT

Matrix in four groups, namely O-S strategy, W-S strategy, T-S strategy, and T-W strategy. One

option or a combination of these strategic options should propel a tourism organization to attain

the development goals/objectives of the government of Lakshadweep, as identified in the

objective analysis. It is seen in the matrix that there are four options each under the O-S and W-S

strategy, three under the S-T strategy and two options are under the T-W strategy. K-1, K-2, K-

3, and K-4 objectives are shown in the matrix against relevant strategic options to serve as a

guide in choosing the option for achieving the sustainable development of tourism.

49 Paul Joyce & Adrian Woods “Essentials of strategic Management” First Edition-1996, p. 66

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TABLE 6.1 SWOT MATRIX OF TOURISM ORGANIZATION OF LAKSHADWEEP

STRENGTHS-(S) WEAKNESSES-(W)

S-1. BIR, Model is a success at par with international standards for uninhabited Islands.

W-1. Weak institutional system. No corporate body like other states/UTs which have tourism development organizations. No office building.

S-2. Courses like the PADI course to develop distinct water sports skills available in dive institutes with training facilities.

W-2. Insufficient number of skilled staff and professional executives.

Internal Environment Assessment

External Environment Assessment S-3. Success of products of package tours. W-3. Lack of financial accountability and low return on investment and equity with LDCL.

OPPORTUINITIES-(O) S-4. Experience of Star Cruise Line operations. W-4. Dual functions of senior officers connected with DOT and SPORTS.

O-1. Strategic geographic location in Maldives-Chagos – Lakshadweep global eco-region near domestic tourist destinations namely, Kerala, Bangalore, and Goa

S-5. Experience of developing of a organization like SPORTS.

W-5. Experience of lessees of SPORTS, litigation, low lease/rent.

O-2. Rich in marine life in coral islands, lagoon, and reef including Pitti bird sanctuary. No such biodiversity/ecosystem and water sport facilities in domestic market in this region.

S-6. Experience of developing tourism infrastructure.

W-6-SPORTS has legal limitations in functioning. as a business entity as per the Society Registration Act.

O-3. Uninhabited islands for development, with pristine natural beauty.

S-7. Acquisition of high-speed vessels/boats and institution of plan for the purchase of two ships and a helicopter.

W-7. Lack of a waste management system and coordination with ecology/environment agencies.

O-4.Six inhabited islands yet to be opened.

S-8. XIth plan allocation with subsidy from the Government of India for the development of tourism (Rs. 7539.9 million)

W-8. No reward and welfare system for employees in the tourism sector.

O-5. CRZ and MRA Laws are relaxed in the case of Lakshadweep. W-9.No mechanism for people’s participation. O-6-Financial outlay for XIth plan of Rs 1053.71million for the environment and forest in Lakshadweep under XIth Plan.

W-10.No institutional arrangement for managing acquired ships/boats and other means of transport

O-7. Availability of local handicrafts and fish products.

11. Insufficient accommodations and infrastructure.

O-8. Network of a large number of cooperative societies, and provisions for the establishment of a corporate body like in other states/UTs.

12. Marketing promotion of its packages and products, water sports facilities and Bangaram model’s distinct value.

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O-9. Support of training institute network of ITDC. O-S strategy O-W Strategy

O-10.Availability of educated youth.

1-[(O-1,O-2,O-3)+(S-1,2,6,7,8)]: Expansion and differentiation strategy in uninhabited islands. - K-3

1-[(O-5,6,8,9)+(W-1,2,3,4,5,6,7,8,9,10)]: Organizational niche through linkages of various organizational functions for sustainable development - Establish a corporate body for strengthening institutional arrangement -K-1

2.[(O-1,2,4,,7)+(S-2,3,4,6,7,8)]: Expansion to inhabited islands and differentiation of water sports-linked packages, K-3

2-[( O-8,9)+(W-2,4,8)]: Strengthen human resource management –K-1

THREATS-(T)

3.[(O-1,2,3,4)+(S-1,3,8)]:Marketing promotion of products. K-2

3-[(O-1,2,3,4)+(W-1,11)]: Anchor projects development - Development of infrastructure on inhabited and uninhabited islands. expansion and improvement of existing infrastructure.-K-3

T-1.Scarcity of land, population pressure and restricted entry and land laws in favor of native.

4. [(O-4,5,6,7,8)+(S-3,4,5,8)]: Backward and forward linkages with other sectors - Development of market for local products with people’s participation, linkaging with cooperative societies and environment agencies, K-2

4- [(O-1,2,3,4)+(W-1,2,5, 12)]: Marketing niche in domestic tourism. –K-2

T-2.Environmental degradation, especially of atolls due to increase in tourism. T-S Strategy T-W Strategy

T-3.Opposition to change by indigenous community due to sensitive social fabric.

1. [(T-1,2,3,4,5) +(S-1,2,6,7,8)],Differentiation

of BIR model like development- K-2

1- [(T-1,2,3,5)+(W-1,2,7,9)]: Promote value of environment, biodiversity and sensitive social fabric. -K-4

T-4 Bad weather/climate may affect supply of energy and commodities.

2- [(T-2,,5)+(S-2,4,5,7,8)]: Contingency mechanism to protect eco fragile ecology - Solid waste management system and the protection of the environment and biodiversity-K-4

2- [(T-1,5)+(W-4,5,6,)]: Merger and acquisition-Merger of SPORTS and acquisition of transport and equity from LDCL _K-1 & K-2

T-5.Waste disposal by sea transport and local people and tourists. Garbage disposal by local market and resorts.

3. [(T-1,2,3,4,5)+( S-3,4,7,8)]: Consolidation of tour packages and Star Cruise operations to inhabited island.- K-2

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There are two types of options in the matrix i.e., external and internal. External strategic

options mean the action plan of an organization for interaction with its surroundings and

environment to increase its business and other related activities. Internal strategic options refer to

essentials to support the external strategies. They mean equipping or designing the organization

to implement external strategies for the growth of an organization. The placing of the SWOT

analysis in the strategy process can be crucial to how it works in practice. Evaluations of

proposals for strategic actions are usually done against set criteria in a business organization; but

in this case, it is a government department that is in need of multifold strategic reforms.

Therefore, the 7-S Model is again a very useful tool for designing an organization to support

external strategies and testing relevant strategic options for final strategy formulation, which will

be discussed as follows.

6.4 STRATEGY IMPLEMENTATION DESIGN FOR SUSTAINABLITY

The organizational performance of the DOT, Lakshadweep was assessed using the 7-S

Model developed by McKinsey & Company consultants, the Harvard Business School and the

Stanford Business School. This tool is also useful for designing various organizational fits for

proper alignment, which is essential to the sustainability of organization for it to attain the

overall goal of ensuring the sustainable development of tourism by the government of

Lakshadweep. The challenge is to find a good and doable strategy.

“Is there an easy way to tell which strategies are likely to run amok because a company

does not have the wherewithal to make them work? My claim is that there is, and my aim to

propose an answer to that question. The answer lies in the use of the McKinsey’s 7-S

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Framework. Originally developed a way of thinking more effectively, the framework also proves

to be an excellent tool for do ability of strategies.”50

Therefore, it is necessary here to arrange various strategic options from the strategic

platform (SWOT matrix) under the 7-S Framework, with justifications for suitable linkages. In

7-S analysis, external strategic options are considered as strategy while other strategic options

are for internal changes in the organization. They are suitable for designing various fits of for the

organization to support strategy where the alignment of each of ’S’ to eliminate the execution

gap is evident. Strategic options found in the matrix suggest that the DOT should have a

corporate body. Other options have been evaluated in terms of designing a corporate body for the

implementation of the external strategy.

6.4.1 Structure: Establishment of a corporate entity

O-W Strategic option 1 has indicated the need (advisability of reorganization) to

reorganize the institutional arrangement to overcome weaknesses, as mentioned in SWOT. So, it

is necessary to suggest a form of organization to test the strategic option in the 7-S Model for the

achievement of objective K -1.

O-W Strategy 1: Set up an organizational niche through linkages of various

organizational functions for sustainable development - Establish a corporate body for

strengthening institutional arrangement. This strategic action will help to overcome weaknesses

and help to gain from opportunities mentioned in the SWOT matrix.

50 Robert H. Waterman, Jr. Thomas, J.Peters, R Philip in “structure is not organization” Business Horizons-June 1980 ,page-288, Book- Reading in strategic management by Thompson, Stickchand,Fulmer, 2nd edition.

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The Lakshadweep administration should form a corporate body like all other states/UTs

to manage its tourism sector. A name suggested for the proposed body is “Lakshadweep Tourism

Development Corporation Limited” (LTDCL), with headquarters in Kavaratti, Lakshadweep. As

defined in Section 617 of The Companies Act-1956, the type of corporate body it should assume

should be as follows:

Any company in which not less than 51 per cent of the share capital is held by the Central

Government, or by any State Government or Governments, or partly by the Central Government

and partly by one or more State Governments. In the case of a Government company, the auditor

of a Government company shall be appointed or re-appointed by the Central Government on the

advice of the Comptroller and Auditor-General of India.51

The Lakshadweep Administration should register a company with the office of the

Registrar of Companies per The Companies Acts-1956. The Registrar is empowered to register

under section 12 of the said Act.

At the Lakshadweep transport connectivity from the mainland is provided by the

Department of Shipping of the Government of India. The tourism department of the

Lakshadweep has acquired high-speed vessels/boats, and has proposed the acquisition of a cruise

ship and a helicopter to improve interisland connectivity and connectivity to and from the

mainland. The Lakshadweep has no separate department for transport due to the virtual non-

existence of public road transport, except for a few private vehicles/ taxis because of the small

size of the islands. The DOT has no structure to manage transport in consonance with tourism

51 The Companies Act-1956, Government of India.

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activities for the effective utilization of resources. Hence, it is necessary to have LTDCL rather

than any other agency manages tourism-related transport.

A newly formed corporate body, the LTDCL will be a registered corporate company

under the Companies Act-1956It will be a separate legal entity so it could carry out its business

of tourism and its transport of tourists in the Lakshadweep, so as to avoid any legal

complications. This arrangement will provide flexibility to its functioning and will instill

professionalism in the management.

The LTDCL will be a business-like organization with the flexibility to formulate its

internal policies to create division of work on the basis of a mix of specialization and division or

area basis to coordinate, monitor and implement its programmes. The LTDCL will also integrate

functions relating to the environment, biodiversity and the social system of the indigenous

population for the sustainable development of the tourism sector. Accountability and

responsibility will be established to check malpractices so as to ensure better governance of the

tourism sector. The proposed organizational set up based on function and division is shown in

Annex 11. Top management consists of generalist civil service officers supported by a diverse

field of members constituting the Board of Directors.

Various strategic fits have been designed using the 7-S Model of LTDCL by testing

strategic options for achieving objectives identified in the objective analysis for sustainable

development of the Lakshadweep. The external strategy for LTDCL as per strategic options for

objective K-2 is mentioned under ‘Strategy’.

6.4.2 Strategy: Market Niche and People’s Participation

Per the analysis in section 4.6, the DOT does not have a strategy to market its products on

a competitive basis to create high value. It has not undertaken any marketing promotion efforts

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for these products targeting suitable market segments due to the fact that tourism functions are

operated through SPORTS on a lease/rent basis despite a liberal resource allocation and

expansion plans to the new islands.

O-W Strategy 4: Marketing Niche Strategy – The marketing efforts of DOT were

confined to ecology awareness and film showings in the ships about the importance of atolls. The

niche strategic option emphasizes product outputs that fulfill the special needs of a few buyers.

Because need-fulfilling products outputs present very high value to their consumers and are

produced in lower numbers, the route to profitability consists of high profit margins and pricing

policies. When a business unit decides to offer existing products or technologically new or

improved products that fulfill the need of a particular buyer in an industry, it has chosen the

strategic option of niche.52

Hence, a business unit competing through the niche option should be prepared to face and

cultivate highly inelastic market demand for its product.

There are several opportunities for LTDCL to develop its own marketing niche for the

products of Lakshadweep that target tourism. Possible targets are as follows: nature viewer and

sea lover, discoverer, rest-seekers, family-oriented sun and sea lover, corporate houses, the

cosmopolitan rich tourists segment from the domestic region, which international tourists also

visit in large numbers. Details on these segments of tourists and their choices have already been

mentioned in section 3.2 of chapter 3; and these groups of tourists account for almost 75 percent

of total tourists. In neighboring state Kerala, the influx of international tourists grew by 26.8

percent, which shows immense potential for this strategy. However, the limited carrying capacity

52 P. Wright, “ MNC-Third World Business Unit Performance: Application of Strategic Element.” Strategic Management Journal.August,1984, pp.231-40, Book, Reading in Strategic Management , by Thompson, Strickland, and Fulmer.

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of islands as per the study conducted by the center for Earth Science Studies mentioned in

review given sub-section 2.5.1.3.1 of Chapter 2 should be kept in mind.

O-S Strategy 3: Marketing Promotion- The LTDCL should launch its website for

products promotion. The website should feature the importance of distinct eco value, rich

biodiversity; water sports facilities, various packages and the unique culture of the native people.

Online advanced booking facilities should be made available to tourists. Further, the Marketing

Division of LTDCL should establish a network with big hotels in Cochin, Mumbai, Goa, and

Delhi and in European countries from where the above-mentioned segments of tourist arrivals in

the region are high. Kerala was visited by 26 percent of international tourists to India in 2003,

which indicates the possibility of a boon for the Lakshadweep’s tourism thrust in the future due

to the superiority and uniqueness of its tourism products.

The Marketing Niche strategy should be followed by the LTDCL because the domestic

sector has competitive advantages to offer, given its capability of providing unique products like

Bangaram Island Resort, water sports, etc. The concept of competitive advantage reinforces the

recommendation to follow this strategy for Lakshadweep tourism, as represented in figure 6.2

Compared to its regional competitors Kerala, Bangalore, and Goa, LTDCL has been

maintaining ecology protection to prolong the capability gap by preserving biodiversity.

Competitive advantage will last over the long term due to the advantage of geographic location.

The differentiation strategy of tourism products will prolong the sustainable advantage for the

sustainable development of tourism, which will be discussed under the Skill strategic fit.

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FIGURE-6.2: Capability and Position Interaction in Lakshadweep Tourism

O-S Strategy 4: Backward and forward linkages with other sectors – The

development of a market for local products with the people’s participation, the establishment of

linkages with cooperative societies and environment agencies. The XIth plan under scheme 4

provides for people’s participation in market development involving the sale of value-added

coconut and fisheries products to tourists. Total allocation proposed is Rs58.86 million, which is

inclusive of the Rs 10 million subsidy components. LTDCL will be legally competent to issue

shares to private individuals up to 49 percent, which will motivate natives, employees and

present lessees/tour operators. Shareholders, on the basis of the volume of their shareholdings,

can be elected to the board of directors.

Private cottages in the inhabited islands should also be promoted, and such cottages

should be operated upon the accreditation of the LTDCL, to ensure their compliance to the laws

on sustainable tourism and the participation of the native people.

Capability-Development of Bangaram Model, for uninhabited islands and Package tour products with rich biodiversity and water sports facilities at all islands like Scuba diving, Snorkeling, PADI course

Geographic Location in second largest eco region of Atolls,200-400kms away from mainland &just 80 kms from Maldives. Major domestic tourist destination Kerala, Goa, and Bangalore without such facilities in this region of India

Competitive Advantage Compared to Kerala, Goa, Bangalore, and can attract international Tourist from Maldives also in long run.

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The cooperative societies, which can play an important role, can also hold shares. The

apex society’s Managing Director from the LCMF should be a member of the Board of LTDCL.

A cooperative society for organizing the youth so they could avail of loan schemes should also

be a useful mechanism for the development of local market and for regulating the marketing of

backward and forward linkages of LTDCL with other sectors. Market development for local

products will attract more tourists, thereby supporting LTDCL indirectly. Moreover, the local

people will get a high price for value added to local products, thereby enhancing the income of

individual households. This will also help provide jobs and develop the entrepreneurial skills of

local people, as well as expose them to modern ideas that will help integrate them with

mainstream society.

The two aforementioned strategic options found suitable for high-price, low-volume

tourism and the people’s participation will ensure sustainable development by integrating society

and other sectors of the economy of Lakshadweep. Therefore, LTDCL should be designed as per

the internal strategy to support the external strategy. It should have as vision the in response to

sensitive ecology and social fabric. Strategic option T-W is relevant, and organization and its

business should revolve around the vision to achieve the goal of the Lakshadweep

Administration. The proposed vision should be as described herein.

6.4.3 Shared: Proposed Vision of LTDCL

T-W Strategy 2: Promote the value of environment, biodiversity and sensitive social

fabric - There is a need to integrate the ecosystem for sustainable development due to the eco

fragile ecology and the sensitive social system. The distinct social culture and environmental

benefits will enhance and maintain the atheistic value of nature to attract nature lovers, discovery

and rest seekers from among the international and rich cosmopolitan tourists, to earn high value

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for tourism products, while maintaining the ecology for the sustainable development of tourism.

The Muslim culture of these islanders is distinct from the rest of the world because they continue

to practice many customs like those of the Hindu mainlanders, but they are very sensitive and

avoid mixing with outsiders. Therefore, modern facilities like a liquor bar; massage spa, etc. are

prohibited in the uninhabited islands.

It is also suggested that an institutional arrangement be forged within the LTDCL to

control the adverse impacts on the ecosystems and environment, especially those from tourism

and transport and, in general, from other sources because ecosystems have high value for the

LTDCL, being of the small islands. These values are shared by everyone in the organization and

by the natives. This strategic option seeks to achieve the overall objective for the sustainable

development of tourism in the Lakshadweep. It reflects the vision and mission of the LTDCL

which should be as follows:

“To Position the Lakshadweep as a unique tourist destination in the world tourism

map by providing high quality, distinct sustainable tourism products as per

international law in the region with the participation of the native people”.

In view of the above external strategies, organization and vision, all strategic options

related to the internal design of LTDCL like staffing, system of functioning, skill of staff and

leadership are discussed under the ‘S’ of the 7-Model for the alignment of its various fits to

support it external strategies.

6.4.3 System: Expansion, Business Practice and Performance Criteria

Relevant strategic options to achieve objectives K-2 and K-3 are discussed hereunder.

O-W Strategy 3: Anchor projects development - Development of infrastructure on

inhabited and uninhabited islands for expansion and improving existing infrastructures - There is

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a 184-bed capacity for all types of existing developed tourist resorts, and these are not sufficient

to meet the present demand of tourists and distinct tour packages. Each island should have a total

of 50 to 100 bed capacities in the existing resorts as well as improved facilities, out of which at

least 30 to 50 bed capacities should be like the BIR model, catering to high-value tourists in each

island. However, bed capacity should consider the area and population of each island to maintain

the carrying capacity within the limit for sustainable development. Expansion will be financially

viable as assessed in Annex 12.

The projected income statement for the beginning of the year of business after

completion of development work is given in Annex 12. Financial analysis of LTDCL is

explained in the income statement. In the year 2011-2012, net profit is estimated at US$11.89

million, and net profit margin ratio is 28.7 percent. Return on assets is 11.4 percent. Payback

period will be less than 10 years, assuming the life of all assets like cottages, ships,

infrastructure, and the helicopter to be 30 years. As per analysis, the new strategy will be

financially viable in addition to reaping tangible and intangible economic benefits to attain a self-

reliant economy for the Lakshadweep.

Therefore, the XIth plan allocation should be utilized for infrastructure development to

promote tourism in the uninhabited islands (Bangaram, Thinkara, and Cheriam), and in the

inhabited islands (Kadmat, Minicoy, Kalpeni, Kavaratti, Agatti, Androth, Amini, Kiltan, Bitra

and Chetlat).

T-S Strategy 2: Mechanism to protect eco fragile ecology- Due to the scarcity of land,

LTDCL should adopt a solid waste management system with modern recycling technology due

to the scarcity of land. All strategies like competitive advantage and differentiation of products

depend on nature-based objects like the lagoon, rich biodiversity, the ecology of the area.

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Biodiversity and ecosystems are assets for the tourism sector in the Lakshadweep, while

degradation of the ecosystem will result in Lakshadweep’s devastation. Waste from sea transport

should also be checked and controlled, and corals should be fully protected from water sports

and construction activities.

The fundamental principles of waste management, well known to be “REDUCE,

REPLACE, REUSE and RECYLE” should be followed. Therefore, solid waste management,

including transport-based garbage, should be collected and recycled using modern technology.

Apart from awareness and training programmes, there should be a provision imposing fines on

violators. The Department of Forest and Environment should also be associated in this

mechanism for an integrated approach which has an allocation of Rs1053.371 million in the XIth

Plan.

Rules of Behavior to preserve ecology: Infusing the vision of LTDCL in the culture of

the staff and the local people is necessary to preserve ecology. Therefore, LTDCL should ensure

the issuance of ecology protection rules in pursuance of laid down principles on this matter from

the administration of Lakshadweep and it should also ensure compliance to such rules as listed

herein.

• In educational institutes, encourage the teaching of biodiversity conservation/tourism

interaction as per principles laid down in Chapter 10 of the Convention on Biodiversity

(CBD) to inculcate an eco-sensitive culture.

• Set up specific environmental educational programmes for the entire staff to practice the

best methods in the preservation of ecology as per Chapters 3, 5 and 9 of the Global Code

Ethics launched by the World Tourism Organization.

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• Use the Internet and other communication systems to disseminate biodiversity

conservation principles, as well as sustainable tourism standards.

Dos and Don’ts:

• Support sustainable fishing- fishing should be done using the eco-friendly pole and line

method for its fish catch, as practiced at present in the Lakshadweep.

• Ensure and educate tourists not to touch the corals, not even with the lightest touch of the

hands during diving and snorkeling, to avoid damage to sensitive coral polyps.

• Don’t dump trash inthe beach or at sea; plastic bags and other debris can injure or kill

marine animals.

• Don’t throw any waste in sea or at land, and always ensure that such waste be delivered

in provided dustbins for degradable and non-biodegradable trash, or in such places as

may provided by the authorities.

• A film should be shown in ships, and passengers should be educated on the importance of

marine biodiversity. Rules for good behavior should be imparted to all visitors.

• Ships should not dispose of garbage near the lagoon area and coral reefs. All non-

biodegradable waste should be disposed of in the mainland or as advised by the solid

waste management agency.

O-S Strategy 2: Suggest to expand to inhabited islands and differentiate water sport-linked

packages. LTDCL should expand tourism to uninhabited islands, and water sports products

should be differentiated by pricing high in segmented markets because such tourism products are

not available, particularly in the western domestic region. Similarly, the O-S 1 strategic option

suggests expanding to more uninhabited islands, which should be differentiated from inhabited

islands because in the uninhabited islands, tourists gain more from the islands’ pristine and

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atheistic value compared to inhabited islands. A consolidation strategy should be followed to

support the differentiation strategy which will be improved via skills enhancement.

T-S Strategy 3: Consolidation Strategy for tour packages and Star Cruise

operations - As discussed in section 4.2 of chapter 4, two products, namely, the Coral Reef

Package (5-night) to Minicoy, Kavaratti and Kalpeni, and the weekend package should be

considered as awareness products. On the other hand, the other four package tours should be

improved through a differentiation strategy to get high value at low volume. The name of the

Marine Wealth Awareness Program to Kadmat should be changed to “Discover Marine Wealth

Package”. No ship-based packages should be offered to uninhabited islands including Star Cruise

Operators to protect their ecology and high atheistic value. Only air transport-based tourism

packages should be allowed in these islands. SPORTS earned 49 percent of the total revenue

from 1996 to 2002 from its package tours which explains the high returns on from tour packages.

The tour packages should be improved to retain competitive advantage.

Stopping the cruise ship operation of M/S Ocean Odyssey to uninhabited islands, namely,

namely Suheli, Valyakara, Cheriyam and Thinkara, which began in January 2007, has been

recommended. Cruise ship operations should be restricted to inhabited islands to promote the

sale of local value-added eco-friendly products, thereby promoting the people’s participation and

creating job opportunities. The latest computerized information system will be essential to the

LTDCL for communication purposes.

Benchmarking - Performance measurement is necessary to support the above strategies.

Benchmarking for success is essential to assessing the position for continuous improvement to

ensure fulfilling the need of the market segment. In evaluating the performance of an

organization, an understanding of benchmarking is essential. “Benchmarking is the collection of

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data by management on their own organization’s performance and that of other organizations

and it is used to make comparisons in terms of performance. Benchmarking assumes that firms

are trying to catch up with the best and can create a copycat mindset in which firms are not

creating their own differentiated products and processes.”53

None of the tourist destinations is capable of offering such unique products in the

domestic tourism sector in the western region of India. Major tourist destinations in neighboring

Kerala, Goa, and Bangalore will provide opportunities for LTDCL. But Lakshadweep offers a

unique and different experience to tourists in the lap of nature where human activities have not

yet been taken up in the virgin island some 200 to 400 kilometers away from the mainland. The

sizes of these islands range from 0.35 to 2.00 square kilometers, with major constraints like lack

of supply of materials, energy, etc. Therefore, visits to such places provide a unique experience

that is priceless for sea discoverers and nature lovers. Three-star hotel equivalent facilities are

available in the Bangaram for which the tariff rates of the present operator (CGH), the highest in

the region, are given in Annex 7A.

The strategy of differentiation does not require benchmarking, but it will be useful to the

improvement of the brand. Eco-friendly tourism as practiced in the Lakshadweep was

appreciated at the International Tourism Bourse in Berlin, Germany. Therefore it is suggested to

follow the Global Code Ethics launched by the World Tourism Organization to address the

environmental and social aspects of sustainability by obtaining Green Globe 21 branding under

the Benchmarking and the Certification program as mentioned previously under rules of

behavior and also explained in section 3.3.1 of Chapter 3.

53 By Paul Joyce & Adrian Woods Book; Essential Strategic Management, First Edition Published in 1996. page-81

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The National Tourism Policy-2002 also advised positioning tourism products through

Global Branding at the international level, to tap the rich potential of tourist destinations.

Adopting tourism practices as per the principles in chapter 9 of the Agenda-21 of the World

Tourism Organization for environment, social and economic sustainability will help obtain

certification from international agencies like Green Globe 21 for benchmarking, which will, in

turn, provide the opportunity to avail of the Global Environment Fund (GEF) for future

development. Such certification will promote the branding of unique products of the

Lakshadweep for expanding the market to high-end tourists. Skilled staff and professional

management are necessary to carry out the above functions. Strategic option O-W suggests

achieving objective K-1 to strengthen the institutional set-up as discussed as follows.

6.4.4 Staffing - Human Resource Management of LTDCL

O-W Strategy 2: Strengthen Human resource management – The new organizational

set-up of LTDCL will have corporate human resource practices. Recruitment, training reward

and performance systems will be established to motivate employees. It is difficult to improve the

staffing reward and pay system in the DOT due to uniform set-ups for all sectors of government.

A corporate body will have the flexibility to adjust the rewards system of its employees,

according to their performance. It can also then recruit professionals on the basis of their

competency and knowledge. However, top management from the General Manager upwards will

have to come from civil service cadres like in the other states/UTs on deputation, as per their

selection by the board of directors to bring new ideas and provide neutral leadership to the native

employees of LTDCL. The LTDCL will have operations and marketing, finance, administration,

transport, ecosystems functional heads at the headquarters level. An Assistant General Manager

will manage tourism in the island on an area basis, supported by assistant managers depending

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on the volume of work in a respective area. The details on the staffing pattern are given in the

organogram in Annex-11.

The staffing pattern is based on a functional and an area basis. The recruitment of staff

will be done at the level of Assistant Managers from among the native population. The

candidates should posses a bio-science or an environment science background graduate degree,

as well as a diploma in hotel management. The selected candidate should undergo a one-year

training program on tourism, finance, human resource and environment with ITDC and an

environment agency. However, at the entry level, the staff of construction and maintenance

works, finance, and administration should possess a degree in his/her respective field and will

work in that area till his/her promotion to AGM. The Assistant Manager is usually promoted to

Manager after four years, while the Manager will be eligible for promotion to Assistant General

Manager (AGM) after six years, depending on his/her performance and the availability of

vacancies. Similarly, the AGM will be promoted on completion of his sixth year as to Deputy

General Manger (DGM). The GM and MD will become civil service officers on deputation.

Details on the managerial staff are given in Annexure 11. However, each Manager and AGM

will be provided one computer-literate clerk and one peon, while the DGM will be given two

computer literate clerks and one peon. The GM will be assisted by two computer literate clerks,

one personal assistant and one driver. The MD will have two clerks, two personal assistants and

one driver.

Personnel for services like housekeeping, restaurants, etc. or those below the rank of

Assistant Manager will be hired on the basis of transparent criteria through open tendering, on

the condition that only native population will be employed for such. The contracting out of

services will provide opportunities for local people to participate in the process of development,

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and these will help them develop entrepreneurial skills related to the hotel management and

tourism sectors. The practice will also increase the efficiency in operation, will eliminate

problem of unionism. Such service providers will work under their respective Assistant Manager,

and their contracts should be renewed every year on the basis of performance. However, water

sports skilled instructors, numbering three per diving institute, will be regular employees of

LTDCL who will be trained for the purpose in water sports institutes. Per the law, all employees

would be from the native populace whose cultural values are distinct. By sharing these values

with rest of the organization, they will somehow transform it into a family. There is a scope to

develop a one family type work culture similar to that in South West Airlines.

The training of staff should be arranged with the central agency, ITDC, which is charged

with the continuous learning of the employees and provides training to the local people in

Lakshadweep for their participation and social development. Water sports instructors should be

provided training on skills enhancement with international institutes in their respective field. It is

necessary to impart training on the latest developments related to skills enhancement on the use

of marine resources in a sustainable manner. Higher pricing should also be instituted to increase

profit margins and the rate of return (K-2).

6.4.5 Skills: Differentiation in Resorts and Water Sports.

As already discussed, the differentiation of products like the BIR model resort within

Lakshadweep and all tourist islands and water sports products in the region could be maintained

by promoting marine wealth. Doing so would allow the LTDCL to maintain its competitive

advantage over other tourist destinations where such unique products are not available. The

discussion on this T-S strategic option follows:

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T-S Strategy 1: Differentiation strategy - A firm that decides to offer products which

are considered unique in the industry chooses the strategic option of differentiation. Products that

are considered unique are normally priced well above production costs. And their sales potential

is relatively insensitive to price (inelastic). “Differentiation strategic option, however, according

to a number of studies, higher profitability may correlate with both smaller or greater production

capacity and market share.”54 Competitive advantage strategy should be supported by

differentiation of products, while core competencies should be embodied in core products, which

are components of the end products as shown in figure 6.3. This model was developed on the

basis of a model given by Prahalad and Hamel (1991, 281).55

Lying 450 kilometers from the mainland, the Bangaram Island Resort is the embodiment

of the core competence of tourism in the Lakshadweep; with accommodation facilities at par

with three-star hotels with distinct water sports based products. The Lakshadweep is located in

the world’s largest eco-region of atolls with live corals and rich biodiversity, which provide it

competitive advantage over other domestic tourist destinations like Kerala, Goa, and Bangalore.

The BIR like resort has no domestic competitors in India in this category. Maldives is its only

international competitor in this class, given that it has the same type of ecosystem. The Maldives

is on the verge of reaching full capacity utilization, and has reportedly registered some adverse

impacts on biodiversity. In contrast, Lakshadweep’s uninhabited islands have retained their

pristine beauty. Therefore, it is necessary to organize all tourism-related activities, so that

management and leadership can mobilize all resources through its staff for effective utilization.

Co-ordination of transport, accommodation and the issuance of entry permits are necessary.

54 Cardyn Y Woo and C. Cooper, “Strategies of effective Low Share Businesses” Strategic Management journal, July-Sept 1981,Book- Reading in Strategic Management By Thompson, Strictland, Fulmer ,pp.-99. 55By Paul Joyce & Adrian Woods; Book- Essentials Strategic Management First edition-1996, p.163.

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Strategic option T-W 3 suggests a merger and acquisition strategy to achieve K-1 and K-2. This

is discussed under Style.

FIGURE 6.3 Competitive advantage Based Strategy through Differentiation of Products

6.4.6 Style: Merger and Acquisition Strategy

T-W Strategy 2: Merger and acquisition Strategy –SPORTS is a de facto government

body without the features of accountability and legality due to its defined mandate per section 20

of Society Registration Act-1860. The merger should cover all assets and staff without loss of

skills and experience in tourism. The merger strategy would improve the morale of the

employees with the overall reorganization sending the message of a change in leadership style.

All tourism and its transport related activities including the equity of the tourism

department should be taken over from the LDCL under the Acquisition strategy. The style of

Discover Marine Wealth Package to Kadmat (5-night) with Scuba Diving

Bangaram Beach Resorts on Uninhabited Island with 3 star hotel facilities and water sports, Beach, sun, Lagoon, sand and biodiversity

Tour packages to Kadmat, Kalpeni, Minicoy, and Kavaratti with modern facilities and water sports, Sun, Sea, Lagoon & Beach,.

Bangaram Beach Resorts with 3 star Accommodation and water sports with pristine beauty of uninhabited island

Swaying Palm Package to Minicoy (5- night), Scuba Diving

Taratashi (5-Night) &Scuba Diving Packages to Kavaratti-PADI course( 8days)

Tourist resorts on inhabited and uninhabited islands, Bangaram, Minicoy, Kadmat, Kalpeni, and Kavaratti with water sports facilities which will be expanded as expansion strategy.

3star-accommo dations uninhab.is

Snorkeling Scuba Diving Diving Institute with latest water sports equipment

Opportunities- O-1,O-2, O-3, O-4 , O-5, O-7, O-11. Tourist Market Segment- Nature Lover, Discoverer, Rest Seekers, Corporate house, and Rich cosmopolitan. International to uninhabited islands.

Integrated LTDCL Approach

Differentiated products

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functioning of top management should be corporate rather than the existing pattern. The merger

of SPORTS and the acquisition of the transport ship/boats and equity from the LDCL will result

in the effective utilization of resources through improved coordination between tour packages,

entry permits, accommodations, local markets and transport facilities. The benefits of economies

of scale in the internal operations of the LTDCL will be reaped.

Members of the Board of Directors will come from diverse backgrounds representing all

important stakeholders to facilitate the creation of a holistic view in policy making. The Board of

Directors, which will assist the Chairman, should include government officials, women, NGOs,

politicians and shareholders.

FIGURE: 6.4 7-S Model

The 7-S Model in figure 6.4 shows that 6 other ‘S’ are supporting strategy, ‘S’ ,meant for

external strategy. Similarly each ‘S’ is responsive to the other related ‘S’ as shown by lines about

their each other’s relationship_for proper alignment of various fits of LTDCL_in order to ensure

high financial returns, economic benefits through the effective utilization of resources, and

improved efficiency through sustainable institutional arrangements for the sustainable

development of tourism in the Lakshadweep. Thus, responsive relationship of proper alignment

Structure- O-W Strategy 1- Organizational Function Niche

Strategy- O-W strategy 4:

Marketing Niche Strategy O-S Strategy 4: Backward and forward linkages

Systems- O-W Strategy -

3 T-S Strategy 2 & 3 Expansion, consolidation, Eco protection mechanism

Shared Values T-W Strategy 2 value of environment, biodiversity and sensitive social fabric

Style T-W Strategy 2: Merger and acquisition Strategy

Staff -O-W Strategy 2: Strengthen Human resource Management

Skill- T-S Strategy 1: Differentiation strategy

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of 7-S evaluated the various strategic options to retain as external and internal strategy for

LTDCL to achieve its vision.

6.5 HIGH VALUE AND LOW VOLUME STRATEGY

Considering all the above formulated strategies, it is clear that a strategy of “High Value

and Low Volume” is suitable for Lakshadweep. The distinct and unique products of tourism are

priced high by virtue of high atheistic value. Such products would attract the market segment of

tourists mentioned earlier. However, within these products, differentiation of inhabited and

uninhabited island resorts and the categorization of tour packages and star cruise operations also

suggest organizing internal business concerns accordingly. Therefore, high value and low

volume tourism should be promoted. Meanwhile, Star Cruise operations and two packages,

namely the Coral Reef and Weekend packages should be considered awareness packages to

attract backpackers/youth and students who can be future customers of the highly priced

products. Water sports can be availed of by all categories at the uniform price as applicable to

inhabited and uninhabited island.

6.5.1 Price Determinants

All materials are supplied to Lakshadweep from the mainland, so that in the island,

energy, water, and food cost higher than in the mainland. Apart from these constraints, the

distinct value of the products and their differentiation, as discussed above, water sports not

available in the domestic region. Distinct products and high atheistic value should be the main

determinants in pricing the various facilities and products in Lakshadweep. Uninhabited islands

like Bangaram should be priced highest, while inhabited islands like Kadmat should be priced on

the pattern of AIBR. Transport should be charged separately as per existing patterns, except for

helicopter service. Normally food cost is also included in the tariffs of rooms.

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CHAPTER 7

IMPLEMENTATION PLAN

7.1 IMPORTANCE

We have seen that problems of the tourism sector of Lakshadweep were analyzed using

the Problem Tree model, for which the objective analysis was done using the Objective Tree.

Strategic options to meet these identified objectives on the basis of objectives analysis of the

Lakshadweep tourism were found in the ‘SWOT Matrix’. The strategy implementation design

for the internal and external strategies evaluated and developed using the 7-S Model will ensure

sustainability, with all parts of the organization supporting each other in the implementation of

the business strategy of LTDCL. This will ensure the achievement of the targeted growth of the

tourism sector in a sustainable manner and the attainment of the overall objectives of the

Lakshadweep administration to improve the quality of life of the native people of Lakshadweep.

While these factors will help to minimize ‘contradictions’ in the existing system of government,

it is important to state here that:

“Any business is always an amalgam of important contradictions-cost versus

service, operations versus innovations, formality versus informality, a ‘control’

orientation versus a ‘people’ orientation, and the like”. 56- By Peters and Waterman, 1982,

7.2 MANAGING CONTRADICTIONS

It is necessary to organize the strategic theme and relate activities to the expected results

of the tourism sector by adopting proposed strategic actions to convince all the stakeholders

including various government agencies, the local people, politicians, NGOs, employees unions,

56 By Paul Joyce & Adrian Wood ; Book: Essential Strategic Management, First Edition-1996, pp.228 ,

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women organizations, lessees of AIBR/BIR, and cruise ship operators of strategic action plan of

sustainable tourism.

“The implementation model must be widened in its scope. Consequently, implementation

may be requiring adjustments and changes in organizational leadership, culture and company

structure (McNamee 1992, 218).”57 The model shown in figure 7.1 found relevant and most

suitable for implementation of strategy for development of tourism in the Lakshadweep is

discussed below:

Organizational Leadership – The administrator is the constitutional head of the UT of

Lakshadweep; he is also Chairman of SPORTS and LDCL. The administrator has the biggest

influence on all aspects of operations: administrative, legislative, and the acceptance of strategic

action_by society in the Lakshadweep.

FIGURE 7.1 Factors in the Implementation Plan of Strategy

57 Essential Strategic Management p. 220 by Paul Joyce & Adrian Woods

Goal and Strategy - -Sustainable tourism.

Culture - SPORTS,

Sensitive Society

DOT/SPORTS to LTDCL - Corporate Governance to be Established

Resource - Rs 7540 plan fund

Functional Operations - Vested interest like Lessees & Some SPORTS Official

Leadership of Administrator/MD, LTDCL are strong &positive.

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The Administrator will also be the chairman of a newly constituted corporate body which

will be legally authorized to manage the tourism sector. It is likely for him to be more interested

in becoming Chairman of the LTDCL rather than SPORTS as the latter has no mandate to do

business due to its limited role, SPORTS being a registered society managed by DOT staff,

assisted by non-governmental staffs

Culture – The social system of the indigenous Muslim of Lakshadweep can be described

as “sensitive”. They have a closely-knit social group that can organize immediately when they

see that their rights are infringed. Consequently, there are chances of their being misled by few

vested interests like lessees and SPORTS officials where new development initiatives are

concerned, even if the proposed reforms stand to benefit the employees of SPORTS as well as

the people of Lakshadweep.

The employees of SPORTS are from the native populace so that the culture of society

and the employees is similar. Again, the leadership role of the Administrator is very crucial in

tackling socio-culture issues involving the employees and organization. Support the

implementation plan should be managed through the mobilization of influential social and

political groups constituted by the natives.

New Structure - the LTDCL will merge SPORTS and acquire tourism transport related

functions from LDCL for the effective utilization, coordination and proper alignment of the

resorts’ capacity, the tour package schedules according to the carrying capacity of the islands.

The LTDCL will also help prevent the degradation of marine ecology. Structural changes should

be managed effectively during the implantation process. Culture and leadership issues are

important in adopting the new structure.

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Resources - The Government of India has proposed a financial allocation of Rs7539.9

million under the XIth Plan for the tourism sector, excluding the salary of the DOT staff. .

Resources will not be a problem as seen in the Tenth Plan, where the budget allocation is double

the proposed allocation. A proportionate share for ecosystem preservation will also be allocated

from the Environment and Forest sector, which has an allocation of Rs1053.7 million under the

XIth Plan. Despite this, the total estimated investment and expenditure for tourism development

will be Rs6866.5 million which is given in ‘Logframe’ a tool can be used in the implementation

process. The said tool is explaining details of plan in table 7.1.

Functional operations – The management of the LTDCL will take charge of operations

which are currently being managed by SPORTS and the lessee in a fragmented manner, leading

to the ineffective utilization of resources. The new institutional arrangement will improve

financial performance, and LTDCL will be able to generate revenue for its future expansion and

operations as a business-like organization. The profit and overall economic benefits will also

rise, in general, through the development of the market for local products. Cruise ships will bring

a large number of tourists to the inhabited islands where local products will be on sale, thereby

increasing demand for these products. The functional operations of the tourism sector will bring

about a new, productive alliance.

7.3 IMPLEMENTATION OF STRATEGIES FOR THE XIth PLAN

The DOT is set to adopt corporate governance, so that it is important for top management

to know what this means – the end relationship of the development of anchor projects as per the

proposed strategy is to attain the targeted growth of the tourism sector. Therefore, there should

be vertical logic in the means-end relationship to achieve the objectives identified in the

Objective Tree. Vertical logic tests the soundness of the result chain derived from the Objective

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Tree. It checks if the inputs are sufficient to carry out the activities, which have to be sufficient to

produce the output. The Design and Monitoring Framework (DMF)58 also called the ‘Logframe’

is a management tool for project implementation; it has been found suitable to the present

scenario. It should be a convenient tool for top management in the process of implementation,

which includes showing the plan and time schedule for the development of tourism in

Lakshadweep. The Design Summary for the XIth Five-Year plan (2007-2012) of LTDC is given

in Table 7.1 using the DMF.

7.3.1 Financial Proposal for Implementation of Strategies

The proposed budget for the implementation of the XIth plan from 2007 to 2012 is Rs 7539.40

million. However, the actual allocation is set annually on the basis of the previous year’s

expenditure and development plan, as submitted to the government prior to the preparation of the

annual budget. Therefore, the yearly budget allocation should be made under the various

schemes mentioned in the plan. Activities mentioned in the Logframe for implementing

strategies are grouped as per plan schemes given in the XIth Plan for budget allocation from

2008 to 2012. Table 7.2 shows details of financing needed per year. Activities are grouped under

various schemes as shown in the Logframe. In addition to the financial allocation to the tourism

sector, a separate allocation of Rs1053.7 million for the preservation of the environment and

ecology of the islands is also available in the XIth plan. A strategy is suggested for a

coordinating mechanism for the effective utilization of such fund to preserve the ecology.

58 Project Performance Management System; Guideline for Preparing a Design and Monitoring Framework, March 2006, Asian Development Bank.

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Table 7.1: Design and Monitoring Framework for the Sustainable Development of Tourism in Lakshadweep for XIth Plan Design Summary Performance Indicator /Targets Monitoring Mechanism Assumption and Risk

GOAL –To make economy self-reliant and reduce poverty to 10 percent by 2015.Growth of Sustainable development of tourism @ 7-9 percent per annum

1-Present poverty level is 27 percent;and almost equal percentage of labor force which will be reduced by providing jobs. for their income enhancement above the poverty line. 2 – Economic growth of 9 percent per annum by March 31, 2009 3-Decrease in WPR for males from 38.6 percent to 15 percent, and for females from 7.1 percent to zero.

1-National economic survey report. 2-Annual Reports of the Department of Planning and Statistics 3-Annual report of LTDCL

PURPOSE:

1-Sustainable development of tourism.

1-Increase level of employment opportunities in_all sectors_through private participation in market development related to other sectors like coconut-based products and value-added fisheries products by enhancing the growth of the handicraft and fish process industries to 10 percent per annum up to 2012. 2--To increase tourism growth from 2-3 percent to 7-9 percent. 3- 100 percent implementation of environment/ecology laws by January 30, 2011. 4- Obtain certification like Green Globe 21 as a result of compliance to social, economic and environment sustainability standards by January 30, 2012.

1-National economic survey report. 2-Annual Reports of the Department of Planning and Statistics. 3-Annual report of LTDCL 4 - World Tourism Organization Report.

Assumptions 1-Department of Agriculture and LDCL with the Department of Industries will take the necessary steps to promote value-added activities for producing products as per need of tourists. Risk- Increase in the number of value- addition activities may raise the level of polluting substances discharged and waste.

OUTPUTS:

1-Institutional strengthening through corporate governance and improvement of Human Resource Management.

1-Incorporation and establishment of the corporate body LTDCL by December 30, 2008. -Recruitment of Assistant Manager (34) and training of present staffs (50) upon the merger of SPORTS by June 30, 2009. - Merger and acquisition of SPORTS and transport equity from LDCL by March 30, 2009. - Development of local market in all inhabited islands by

1-Memorandum of Article (?) of registered corporate body, LTDC. 2-Quarterly or annual performance report of LTDC. 3- Annual Report of Lakshadweep

Assumption-1, Administrator will take the initiative for the establishment of LTDCL. Assumption2-Administator will mobilize politicians,

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2-Increase in level of effective utilization of resources and backward and forward linkages. 3-Expansion of tourism to uninhabited and inhabited islands. 4-Improvement of air/sea transport. 5-Improvement of marketing promotion.

December 30, 2009. - Diverting operations of Star Cruise from uninhabited islands to inhabited island by December 30, 2008 2-All resorts and resources to be put under the direct operational control of LTDCL by December 30, 2010 and increase ROI to 20 percent by March 31, 2011. 3- Development of tourism facilities at Thinkara and Cheriam Islands by December 30, 2009, and 5 inhabited islands, namely,Amini, Androth, Chetlat, Bitra, and Kiltan. Increase bed capacity of existing resorts from 184 to 600. 4-Increase number of passenger tourists to Lakshadweep from 5000 per year to 10,000 by December 30, 2010 except those taking the Star Cruise. - Deploy existing acquired ship/boats between existing resorts and the mainland by January 30, 2009, and purchase one passenger ship and one helicopter by December 30, 2010. -Allow private airliners to offer interisland air service by helicopter (with 20 seats) by December 30, 2009. 5- Launch publicity for distinct products and create a network of the establishments in the region and internationally (with big hotels) by December 30, 2009. Some 80 percent of the identified market segments should know about Lakshadweep tourism by December 2010.

Administration. 4- Record of LTDC like Booking, Works, Environmental Impact Assessment report and Transport records of LTDC.

social group by virtue of his position and influence. Assumption-3- Administrator will initiate the merger of SPORTS and the acquisition of transport ship for tourism from LDCL. Assumption-4- Water, energy, health services will be provided by the pertinent government department. Risk-1- Prolonged rough weather conditions during monsoon season may delay execution of strategy. Risk-2- Some influential lessees and SPORTS employees may misguide local natives about project developments and the formation of the LTDC.

SCHEMES/ACTIVITIES:

1. Human Resource 1.1-Registration of corporate body and establishment and takeover of assets from SPORTS/LDCL and miscellaneous expenses. by December 30, 2008. 1.2 Recruitment of new staff and completion of training for existing staff by June 30, 2009. 1.3- Completion of training of fresh recruits (1 year at ITDC) by June 30, 2010. 1.4- Giving of salaries, allowances/advances and other miscellaneous expenditures till 2012.

Civil Works and infrastructure 2.1- Construction of office building at Kavaratti by December 2009. Furnished by June 2010.

INPUTS:

1.1-Rs2 million plus Rs 200 million in paid-up capital 1.2 – Rs30 million. 1.3-Rs 40 million. 1.4-Rs 570million. .(Rs. 120 million per annum)

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2.2-Civil works related to construction of cottages/health clubs, etc. in existing resorts: Bangaram(20), Kavaratti (45), Kadmat (20), Minicoy (36), Agatti (40) and one health club per island, except in Bangaram by Dec. 30, 2009. 2.3- Furnishing and SWM, water sports equipments in uninhabited islands by June 30, 2010. 2.4-Acquisition of Land at Thinkara and Cheriam by Dec. 30, 2009. 2.5-Construction and furnishing of 50 cottages per island, health clubs, water sports facilities, etc. by June 2011. 2.6- Construction of road helipad and other structures during the 2009-2012 period in the uninhabited islands. 2.7- Approval from the National Government for Expansion to the inhabited islands by June 2009. 2.8- Land acquisition in inhabited islands, i.e.,Amini, Kiltan, Chetlat, Bitra and Androth for resorts and diving institutes by March. 30, 2010. Androth will have a conference-cum- auditorium for corporate houses (events?). 2.9-Civil works in inhabited island during the 2010-2011 period. (Amini-50, Androth-25, Kiltan -30, Chetlat-30, Bitra-20 double bed cottages , one health club and water sports facilities, including a deep compression chamber.) 2.10- Furnishing and installation of SWM, etc. in inhabited islands by December 2012. 2.11-Construction of road helipad and other structures in inhabited islands during the 2009-2012 period. 3. Water Sports Equipment

3.1- Purchase of modern water sports equipment. 4. Public and Private Sector Participation

4.1-Loan disbursement of Rs100,000 as 50 percent cost of shop for 80 people, out of which 50 percent will be women in the inhabited islands of Minicoy, Kavaratti, Kadmat and Agatti (20 each) by March 30, 2009. 4.2. Disbursement of loans to 100 persons every year starting from a newly inhabited island, similar to sr.no.4.1 till March 30, 2012 at 9 percent interest rate recoverable in monthly installment one year after loan disbursement. 5. Transport 5.1 - Purchase of one 20-seater helicopter, high-speed vessels and ships by Dec. 30, 2009-2010. 6. Marketing Promotion 6.1- Launching of an exclusive LTDCL website and a film for broadcasting in the Interational Geographic Channel and national channels for advertisement by June 30, 2009. 6.2 Establish a Cultural and Tourism Center at Lakshadweep, Bhawan Delhi by March 30, 2009 and also establish a network with all embassies in Delhi and five-star hotels in Delhi, Mumbai, Kerala, Goa and in European countries by October 30, 2010 for the promotion of distinct and unique marketing products. 6.3 Award of best practices to a resort for best environment /biodiversity preservation practices by December 30, 2009 and every year thereafter; launch of its advertisement in Website and TV channels as promotion marketing. Note-1- Total operating and maintenance cost for each resort will be approximately Rs 750million per

annum, All fund estimates are based on market trend and approximations, as per manual of public works

department.

2- Energy, water supply, health services and other basic services will be provided by concerned department

on payment of fixed commercial tariff.

2.1-100 million. 2.2-[(161 xRs 1500 per sq ft.x 500 sq ft.) + (5 x Rs 2.5 million)] =Rs. 133.25 million+ Rs. 15million as contingency fund. Total =Rs 148.25 million. 2.3-Rs 80 million. 2.4- Rs 60 million for 80 hectare land. 2.5- Rs 175 million. 2.6-Rs 350million. 2.7-Rs. 1 million 2.8-Rs150million. 2.9-Rs.335million+Rs. 30million+Rs.15 million as contingency=Rs380million. 2.10- Rs 100million. 2.11-Rs 600 million. 3.1- Rs. 50million. 4.1-Rs 8million. 4.2-Rs. 60million. 5.1-Rs 3000milion plus 6.1-Rs. 10million. 6.2-Rs.50 million. 6.3- Rs. 3 6million. Total=Rs 667.25million. Plus Rs.750million operating & maintenance cost for one year. Hence, Gross Total in XIth plan would be Rs6866.25million.

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The establishment of a new entity called “LTDCL” with paid-up capital of Rs200 million

has been proposed. The amount of the paid-up capital and related expenses are shown under

HRD. The actual budget can be higher as seen in the Xth Plan. However, the Government of

India disburses funds on receipt of yearly demand. Therefore, Plan implementation should be as

per details given in Table 7.2. Salary and administrative expenses and total operating and

maintenance costs amount to Rs125 million and Rs750 million for one year, respectively. Salary

expense is included till 2012, but operating and maintenance costs are for one year only. Total

plan outlay for the remaining duration of the XIth Plan is estimated at Rs6866.5 million. Salary,

administrative and operating costs are not included in table 7.2 which showing investment plan

under proposed schemes/activities.

Table 7.2: Proposed Financial for Implementation of Strategies (In Rs million)

Scheme 2008-09 2009-10 2010-11 2011-12 Total

HRD and Miscellaneous expenses

202.00 150.00 160.00 125.00 637.00

Tourism Marketing

2.00 30.00 13.00 7.00 52.00

Civil Works and Infrastructures

469.25 610.00 750.00 480 2309.25

Public Private participation in Tourism

5.00 28.00 20.00 10.00 63.00

Water Sports Equipment

5.00 10.00 20.00 20.00 55.00

Transport -- 1600.00 1000.00 400.00 3000.00

TOTAL 683.25 2428.00 1963.00 1042.00 6116.25

Allocation is not a problem because the actual amount is disbursed annually.

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CHAPTER 8

CONCLUSION AND RECOMMENDATIONS

The strategic location of the islands in the Arabian Sea closer to Maldives attracts the

attention of everyone. Wonderful marine life including live corals makes it a destination of

choice for nature-loving tourists. Protecting marine life and preserving the environment pose

major challenges to the sustainable development of Lakshadweep. The tourism sector has been

identified as the engine of growth through the people’s participation in creating a self-reliant

economy in Lakshadweep.

The XIth plan reflects the tourism sector’s goal of providing employment to the native

people, but organizational weaknesses and the functioning system’s lacking accountability

feature, disallow the use of resources in an efficient and effective manner in the course of

developing tourism. The management of resorts, tour packages and their marketing has several

lacunas because the DOT suffers from a lack of professionalism and a weak corporate culture. It

has, in fact, handed over the management of tourism infrastructure on a nominal lease/rent to

SPORTS. SPORTS, in turn, has handed the resorts to different lessees in exchange for lease

payments/rent, thereby hampering the career prospects of the employees and also hindered the

forging of backward and forward linkages with other sectors that could have otherwise promoted

employment and income for the native people.

It is true that the experience of SPORTS in tourism, especially in terms of hospitality

functions and environmental awareness among the locals, has been appreciable; but the business

strategy of SPORTS lacks legal teeth that would have allowed it to generate revenue

corresponding to the investment made in the tourism sector, for use in future expansion and to

facilitate self-reliance without any grant or subsidy from the government.

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Problems and objectives analysis helped select the right combination of strategic options

to come up with doable strategies. The sustainable competitive advantage strategy is suitable for

the marketing of tourism products in the region and getting high value for them. The

differentiation strategy and maintaining a capability gap vis-à-vis major domestic tourist

destinations like Kerala, Goa, Bangalore and others are important to ensuring sustainable

tourism. The sustainable development of tourism requires that tourism practices conform with

the Global Code of Ethics as prescribed by the World Tourism Organization. Therefore, the

institutional design of the LTDCL of aligning various parts to make it an ‘organism type’ for

establishing corporate governance is essential to sustainability. The LTDCL will be able to

increase growth to 7-9 percent in this decade through the people's participation in the quest to

improve the quality of life of the native inhabitants of the Lakshadweep islands.

Therefore, it is recommended that the Lakshadweep Administration should implement

the proposed strategies relating to the concept of “High Value, Low Volume’ tourism. To this

end, the administration should first register the proposed organization LTDCL as a Public sector

entity. The administrator should then convene a meeting to discuss the proposed implementation

plan with all stakeholders in the Lakshadweep so as to gain their support for the action plan. An

interim committee should be set up under the Administrator for the timely implementation of the

plan. It is also recommended that the XIth Plan allocation should be budgeted as proposed in the

strategy and the strategy implemented within the XIth plan period (2008-20012) to ensure the

effective utilization of resources. The Government of India has allocated adequate resources

which should be utilized effectively and prudently through the implementation of the

recommended strategy within the prescribed time schedule for the sustainable development of

tourism in the Lakshadweep.

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BIBLIOGRAPHY

Asian Development Bank. National Ecotourism Strategy of the Philippines.

Asian Development Bank. Project Performance Management System: Guidelines for

Preparing a Design and Monitoring Framework. March 2006.

Dorairaj and R. Soundararajan. Status of Coral Reefs of Mahatma Gandhi Marine National

Park, Wandoor, Andamans.

Joyce, Paul and Adrian Woods. Essentials of Strategic Managemen Edition-1996. Kelkar, O.P. Ecotourism and Green Productivity in India.

Ministry of Tourism and Culture, Government of India. Kerala’s Approach to Tourism

Development: A Case Study-2004. Ramachandran, K.K. and Ajaykumar Varma. A Review of the Contribution of Centre for

Earth Science Studies (CESS) Towards Understanding the Totality of Environment of

Lakshadweep, India-2000.

Report of Registrar General of India. Census Giant Clams through a Community Reserve in the Lakshadweep Island. Sawkar, Kalidas, Ligia Noronha, Antonio Mascarenhas, O. S. Chauhan, and Simad Saeed.

Tourism and the Environment, Case Studies on Goa, India, and the Maldives-1998. Sin, H. S. Marine Protected Areas of India, Status of Coastal Wetland Conservation.

Thompsons, Strickland and Fulmer. Readings in Strategic Management. 2nd edition-1987. UNEP. Integrating Biodiversity into the Tourism Sector: A Guide to Best Practice. UNEP. Industry and Environment. October – December 1998/ Wafar, M. Carrying Capacity of Coral Reefs. National Institute of Oceanography, Dona

Paula P.O., Goa 403 00. World Travel & Tourism Council and International Hotel & Restaurant Association. The

Global Importance of Tourism. XIth Plan Document of Department Planning and Statistics, Lakshadweep Administration. Note: All internet sources are mentioned in footnote of relevant data and informations.

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ANNEXURES Page

ANNEX 1: THE LAND AND LAGOON AREA OF ISLANDS PROPOSED FOR 116

TOURISM DEVELOPMENT

ANNEX 2: POPULATIONS OF THE LAKSHADWEEP ISLANDS 117

ANNEX 3: POPULATIONS BY RELIGION OF NEIGHBORING STATE OF

LAKSHADWEEP 118

ANNEX 4: PROPOSED OUTLAY FOR XITH PLAN AT A GLANCE) FOR

ENVIRONMENT SECTOR IN LAKSHDWEEP 119

ANNEX 5: GEOGRAPHICAL FEATURES, ATTRACTIONS, AND FACILITIES OF TOURIST

DESTNATION OF LAKSHADWEEP 120

ANNEX 6: DISTRIBUTIONS AND AREA ESTIMATE OF CORAL REEFS IN INDIA 123

ANNEX 7: TARIFFS FOR AIBR AND BIR, AND COST OF PACKAGE TOURS 124

ANNEX 7A: BANGARAM ISLAND RESORT, LAKSHADWEEP 125

ANNEX 8: ORGANIZATIONAL CHARTS OF SPORTS. 126

ANNEX 9: XTH PLAN SCHEMES ACHIEEMNTS 127

ANNEX 10: TOURIST ARRIVALS, 1992-2002 128

ANNEX 11: ORGANIZATIONAL CHARTS FOR PROPOSED CORPORAT BODY;

LTDCL, LAKSHADWEEP 129

ANNEX 12: ESTIMATED INCOME STATEMENT OF LDCL FOR YEAR 2011-12 130

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ANNEX 1

THE LAND AND LAGOON AREA OF ISLANDS PROPOSED FOR TOURISM

DEVELOPMENT

NAME OF ISLAND AREA OF LAND

(sq. kms.)

AREA OF LAGOON

(sq. kms.)

Bangaram (Uninhabited) 0.465 Thinnakara(Uninhabited) 0.312 46.25 Cheriyam (Uninhabited) 0.4543 25.60 Suheli (Uninhabited) Valiyakara 0.4856 Cheriyakara 0.3308 78.96 Kadmat (inhabited) 3.12 37.50 Minicoy 4.8 30.60 Kalpeni 2.6 25.60 Kavaratti 3.7 4.96 Agatti 2.6 17.50 Androth 4.84 - Amini 2.59 1.5 Kiltan 1.63 1.76 Chetlath 1.04 1.60

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ANNEX 2: POPULATION OF THE LAKSHADWEEP ISLANDS

Bitra 0. 1 45. 61

Provisional Data Population Sheet

U. T. /C. D.

Block

Area*(in

Sq. Km.

Population Population

of 0-6 age

group

Total

Literates

Growth

rate

19991-

2001

Density

(Per

Sq.

km)

Sex

Ratio

Literacy

rate**

Persons Male Females Persons Male Females Persons Male Females

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Lakshadweep 32. 00** 60595 31118 29477 8860 4488 4372 45281 24806 20475 17. 19 1894 947 87. 52

Chetlat 1. 14 2553 1341 1212 414 216 198 1837 1011 826 12. 17 2239 904 85. 88

Kiltan 1. 63 3664 1847 1817 655 344 311 2518 1337 1181 19. 54 2248 984 83. 68

Kadmat 3. 12 5319 2685 2634 848 411 437 4042 2143 1899 33. 48 1705 981 90. 4

Amini 2. 59 7340 3727 3613 1122 599 523 5239 2892 2347 13. 85 2834 969 84. 26

Agatti 3. 84 7072 3688 3384 1230 614 616 5170 2898 2272 23. 4 1842 918 88. 5

Kavaratti 4. 22 10113 5579 4534 1175 614 561 7889 4645 3244 16. 55 2396 813 88. 29

Androth 4. 84 10720 5356 5364 1731 860 871 7617 4162 3455 17. 52 2215 1001 84. 74

Kalpeni 2. 79 4319 2279 2040 556 259 297 3188 1863 1325 5. 75 1548 895 84. 72

Minicoy 4. 39 9495 4616 4879 1129 571 558 7781 3855 3926 14. 12 2163 1057 93. 01

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ANNEX 3

POPULATION BY RELIGION OF NEIGHBORING STATE OF

LAKSHADWEEP

Population by religious communities

S No. State / UT Religious Communities Persons Males Females 1 India All Religious Communities 1,028,610,328 532,156,772 496,453,556 2 India Hindu 827,578,868 428,678,554 398,900,314 3 India Muslim 138,188,240 71,374,134 66,814,106 4 India Christian 24,080,016 11,984,663 12,095,353 5 India Sikh 19,215,730 10,152,298 9,063,432 6 India Buddhist 7,955,207 4,074,155 3,881,052 7 India Jain 4,225,053 2,177,398 2,047,655 8 India Other Religious Communities 6,639,626 3,332,551 3,307,075 9 Karnataka Hindu 44,321,279 22,549,324 21,771,955 10 Karnataka Muslim 6,463,127 3,302,582 3,160,545 11 Karnataka Christian 1,009,164 497,205 511,959 12 Karnataka Sikh 15,326 8,811 6,515 13 Karnataka Buddhist 393,300 206,227 187,073 14 Karnataka Jain 412,659 214,244 198,415 15 Karnataka Other Religious Communities 115,460 58,715 56,745 16 Kerala All Religious Communities 31,841,374 15,468,614 16,372,760 17 Kerala Hindu 17,883,449 8,690,473 9,192,976 18 Kerala Muslim 7,863,842 3,776,371 4,087,471 19 Kerala Christian 6,057,427 2,981,790 3,075,637 20 Kerala Sikh 2,762 1,611 1,151 21 Kerala Buddhist 2,027 1,081 946 22 Kerala Jain 4,528 2,268 2,260 23 Kerala Other Religious Communities 2,256 1,153 1,103 24 Lakshadweep All Religious Communities 60,650 31,131 29,519 25 Lakshadweep Hindu 2,221 1,776 445 26 Lakshadweep Muslim 57,903 28,921 28,982 27 Lakshadweep Christian 509 422 87 28 Lakshadweep Sikh 6 6 0 29 Lakshadweep Buddhist 1 0 1 30 Lakshadweep Jain 0 0 0 31 Lakshadweep Other Religious Communities 0 0 0 Source: Census of India 2001

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ANNEX 4

PROPOSED OUTLAY FOR XITH PLAN AT A GLANCE) FOR

ENVIRONMENT SECTOR IN LAKSHDWEEP

Table 1 (Outlay in million)

SI

No.

Name of the Scheme 2007-

2008

2008-

2009

2009-

2010

2010-

2011

2011-

2012

Total

1 Environment Protection and Awareness

30.00 40.00 65.00 67.45 64.26 266.71

2 Scientific Management of Biodegradable and Non- biodegradable Waste

20.00 25.00 45.00 48.00 54.25 192.25

3 Corals, Wild Life and Lagoon Conservation

25.00 35.00 75.00 82.00 63.25 280.25

4 Civil Work 100.00 40.00 35.00 25.00 200.00 5 Social Forestry 18.00 22.00 23.00 25.00 26.50 114.50

Total 93.00 222.00 248.00 257.45 233.45 1,053.7

1

Table 2: Xth PLAN ALLOCATION OF TOURISM SECTOR FOR 2002-2007

(In millions)

Sr.No Scheme

2002-

03

2003-

04

2004-

05

2005-

06

2006-

07

TOTAL

1 Infrastructure and HRD

3.637 3.535 2.65 2.7 2.2 4.556

2 Tourism Marketing 49.5 1.4 1.066 2.7 2.5 12.616

3 Opening of more islands to international tourism

5.0 0.5 0.20 0.20 0.20 6.10

4 Equity Participation with LDCL

3.5 2.5 2.5 2.5 2.5 13.5

5 Tourist ship 0.20 31.889 150.0 100.0 100.0 432.08

6 Civil works 14.68 5.05 1.0 1.0 1.0 22.884

7 TOTAL 32.0 44.829 157.416 159.10 108.2 501.55

Source: Lakshadweep Administration http://lakshadweep.nic.in/Tourism.PDF

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ANNEX-5 Geographical features, attractions and facilities of Tourist Destinations of

Lakshadweep

1-Agatti

It is 459 km away from Kochi and 57 km away from the headquarters island of Kavaratti. On the horizon northwards can be seen the Bangaram, Thinnakara, Parali and Kalpitty islands. These islands are within a 20-km radius of each other, and tourists are allowed to visit all the islands in the group.

Tourists can avail of snorkeling, kayaking and canoeing facilities through which one can appreciate the wonderful marine life.

2-Kalpeni-The Beach Less Wonder Island59

Kalpeni is situated north east of Kavaratti, which is the second closest island to the mainland after Androth Island. Kalpeni is more known for its three satellite isles, namely, Tilakkam, Pitti, and Cheriyam. Kalpeni is 2.8 km in length and 1.2 km in width. To its north is Cheriyam Island, while southwest are Tilakkam and Pitti. Kalpeni has one of the largest lagoons in the Lakshadweep archipelago. Cheriyam Island is an important attraction for tourists visiting Kalpeni. Visiting Kalpeni during low tide means being able to walk all the way to Cheriyam Island over coral debris.

Tourists can visit the unexplored Moinnuddeen Mosque along the southernmost shore of Kalpeni. The architecture is Kerala style, its roof covered with old Mangalore tiles. There is a local handicraft store behind the Koomel resort which sells various wood work items. Lakshadweep tourism organizes shows featuring traditional Parichakkali and Kolkali dances. Kalpeni can be reached by taking Lakshadweep Tourism's Coral Reef Package.

3-Kadamat- Tracing Luxury on Golden Sands60

The island is 8 km long, 550 meters wide at its broadest point, and covers an area of around 3.20 sq km. The warm and clear water lagoons are perfect for swimming and scuba diving. whereas the silvery beaches are ideal for spending lazy and carefree hours under swaying palms. The shallow lagoons on the western side of the island are dotted with the most beautiful coral reefs in the archipelago. Without a doubt, the shores of Kadmat are one of the most irresistible in the entire Asia.

The diving school on the island is one of the best and most famous. It is the first and only certified or World Underwater Federation diving school in India. Scuba diving offers a view of the awesome spread of coral reefs on the sea bed. The Kadmat Resort also provides facilities for many water sports facilities like kayaking, and snorkeling. It 59 Source- http://www.indialine.com/travel/lakshadweep/kalpeni/ 60Lakshadweep Tourism web page of Indialine; http://www.indialine.com/travel/lakshadweep/kadamat/

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organizes excursions to nearby islands in a glass-bottomed boat, which allows one to see the colorful marine life in Lakshadweep islands.

The resort also offers such amenities as a cloak room, currency exchange, and a doctor on call, laundry service and a front desk. It also organizes cultural performances by the locals. The multi-cuisine restaurant of Kadmat resort is truly a delight for seafood lovers. The restaurant also serves Continental and Chinese cuisine, apart from famous Kerala dishes. Kadmat can be reached from Agatti by taking a cruise. It can also be reached by joining the Lakshadweep Tourism Department’s Marine Wealth and Scuba Diving packages.

4-Minicoy - Experiencing The Real Lakshadweep61

Minicoy, the southernmost island, is closer to Maldives than to any other Lakshadweep island. The nearest Lakshadweep island to Minicoy is Kalpeni, which is around 450 Km away; the nearest Maldives island Addu is just 139 Km away from Minicoy. Minicoy covers an area of approximately 4.22 sq km. It is the second largest island after Androth.

The most important attraction in Minicoy island has been the same for over a century. Built in 1885 by the British, the magnificent lighthouse has become a symbol of pride for Minicoy. It is one of the oldest surviving structures in the entire Lakshadweep. From the highest point of the lighthouse, one can enjoy the mesmerizing view of an unending sea and the lush green Minicoy islands.

One of the hobbies of the people here is wood craft which they paint in the most vibrant colors. Snorkeling is unbelievably refreshing and rewarding in the long and shallow lagoons. The Lakshadweep tourism office also organizes the presentation of traditional Minicoy Bandiya and Lava dances. Minicoy can be visited as part of Lakshadweep Tourism's Swaying Palms and Coral Reef package.

5-Kavaratti - Experiencing the Real Lakshadweep62

In the lagoons around Kavaratti, you can come face to face with starfish, anemones, sea cucumbers and innumerable fishes of different varieties and colors. Kavaratti, the centre of Lakshadweep islands, covers an area slightly over 4 square kilometers. The Ujra Mosque is one of the most important attractions in Kavaratti Island. Built by the Sheikh Mohammad Kasim in 17th century A. D., its main attractions are the intricately carved pillars and ceilings.

A few blocks away is an aquarium which is also a museum. The main attraction of the aquarium is a small shark. Watching a shark from up close is truly an amazing experience, especially when knows it can do no harm. Inside the large glass 61 Lakhadweep tourism web page of Indialine; http://www.indialine.com/travel/lakshadweep/minicoy/ 62 Lakshadweep Tourism Web Page of Indialine;http://www.indialine.com/travel/lakshadweep/kavaratti/

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compartment, the shark shares space with sea cucumbers, octopuses, schools of fishes and few anemones. The museum section holds different types of shells, splendid-looking corals and innumerable fishes preserved in glass jars. Right next to the museum is the Dolphin Dive Center.

The center offers different PADI programmes for amateur and professional divers. PADI (Professional Association of Diving Instructors) is the world's largest leisure diving organization. A glass-bottomed boat can be hired to view the marine life in Kavaratti lagoons. Kavaratti is part of the itinerary of two packages offered by Lakshadweep Tourism, namely the Coral Reef and Taratashi packages.

The Pitti island lies north, west of Kavaratti and 18 kms away. It accommodates a large concentration of birds, which is beautiful. The tourists can be taken to the island by boat for a distant view of these birds.

6-Bangaram-The Island of Golden White63

Bangaram island is situated some 10 kilometers north of Agatti. It can be reached by boat from the Agatti island. Helicopter service to Bangaram is available. Bangaram Island is famous for its teardrop shape, silvery beaches and breathtaking coral reefs. It is home to a breathtaking variety of underwater life alongside the colorful coral reefs. The divers from around the world visit Bangaram Island to experience and explore its one-of- a-kind underwater world. They get to swim by the side of sharks, mantarays, sea turtles, eels, and innumerable fishes. The resort employs certified tutors who offer instruction on diving. Snorkeling is another option for exploring the underwater life in the shallow lagoons. For people who are not too comfortable with diving but still wish to see the unbelievable sights, a glass-bottomed boat may be hired from the resort. In Bangaram islands, one can go deep-sea fishing.

The Bangaram resort offers Ayurvedic massage in separate facilities for men and women. The resort serves both local and international cuisines and has a well-stocked bar. Dance theatre, indoor games, library, internet, television, and landline as well as mobile communications are available.

63 Lakshadweep Web Page of India line; http://www.indialine.com/travel/lakshadweep/bangaram/

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ANNEX 6

DISTRIBUTION AND AREA ESTIMATE OF CORAL REEFS IN INDIA

Table: Area (in sq. kms.)

GUJARAT TAMIL

NADU

LAKSHADWEEP ANDAMAN

& NICOBAR

Reef flat

148.4

64.9

136.5

795.7

Sand over reef

11.8 12.0 7.3 73.3

Mud over reef

117.1 - - 8.4

Coraline shelf

- - 230.9 45.0

Coral heads - - 6.8 17.5 Live coral platform

- - 43.3 -

Algae 53.8 0.4 0.4 -

Seaweeds - - 0.7 - Sea grass - - 10.9 - Reef vegetation

112.1 13.3 - 8.9

Vegetation over sand

17.0 3.6 0.4 10.5

Lagoon

0.1 322.8 -

Sandy substrate

- - (67.4) -

Reef patch - - (13.4) -

Deep - - (98.5) - Uncertain - - (143.5) - Total 460.2

94.3 816.1 959.3

Source: Shailesh Naik (1997), Space Application Centre (ISRO).

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ANNEX 764

1. Tariffs of Cottages in AIBR as Fixed by Lessee

Single bed Double Bed Rate In USD INR USD INR Type of Cottages Standard Non A.C. 125 4950 180 7150 Standard A.C. 190 7425 255 10175 Deluxe non A. C. 235 9350 300 12100

2. Tour Package : Royal Island Packages AIBR 3 Night/4days

Double Bed Extra Child 5-12 years

Extra Person above 12 year

Type of Cottages 17,000 4,250 5,950 Standard Non A/C 24,700 6,175 8,645 Standard A.C 19,800 4,950 6,930 Deluxe Non A.C. 26,800 6,700 9,380 Deluxe A.C. 26,800 6,700 9,380 Inclusion -Transfers to and from the Agatti Airport. • Welcome Drink on arrival • All taxes • All meals (3 time buffet +morning & evening tea)* • Usage of Health Club & Indoor Games •

3. Ship-Based Tour Packages: All Packages Inclusive of: Transport cost, Tour cost, Day sightseeing tours, Boarding and lodging. Additional Charges: 5% service charge, 5% service tax

Ships Tour Package On board Tariffs in Rupees Room Tariff per night

Coral Reef Packages

Delux Ac

First Class

Touist Class

Single A.C.

Double AC

Single Non A.C.

Double Non A.C.

Marine Wealth

Awareness Program 15,000 14,260 9040 2,500 4,000 2,000 3,000

Week End Package 4,000 -

Taratashi package 7,000 6,000 3,500 - - 1,500 3,000

Swaying Palm 7,000 6,000 3,500 2,500 4,000 2,000 3,000

Scuba Diving* 7,000 6,000 3,500 1,000 *PADI Course Fee: Rs 15,000 extra Plus Rs. 1,000 for accommodation and local transport.

64 Travel Keral Web Page_Lakshadweep; http://www.travelskerala.com/lakshadweep_tour_packages.htm

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ANNEX-7A

BANGARAM ISLAND RESORT, LAKSHADWEEP

e-mail: cghwinterusd@nivalink. com

CGH GROUP OF HOTELS - Valid from 1st Oct 2007 to April 2008

High Season 01 Oct - 20 Dec & 11 Jan - 31 Jan &01 Mar - 30 Apr,

Peak Season 01 Feb - 28 Feb & 21 Dec - 10 Jan

Rates in USD HIGH SEASON PEAK SEASON EXTRA

PAX

TAX in

percent

SGL DBL SGL DBL

Casino Hotel (CP)

Standard Room 110 120 110 120 50 15

Brunton Boatyard (CP)

Standard Seafacing 345 345 375 375 50 15

Deluxe Seafacing 480 480 550 550 50 15

Coconut Lagoon (CP)

Bungalow 235 235 270 270 50 15

Mansion 295 295 330 330 50 15

Private Pool Villa 470 470 550 550 50 15

Spice Village (CP)

Standard Villa 235 235 270 270 50 15

Deluxe Villa 365 365 395 395 50 15

Marari Beach (CP) Long Stay Offer (Subject To Minimum 07 Nights

Garden Villa 230 230 255 255 50 15

Garden Pool Villa 400 400 470 470 50 15

Deluxe Pool Villa 470 470 530 530 50 15

Marari Beach (CP)

Garden Villa 270 270 295 295 50 15

Garden Pool Villa 470 470 550 550 50 15

Deluxe Pool Villa 550 550 620 620 50 15

Spice Coast Cruises (AP)

01 Bed Room (Sleeps 02) Air

Conditioned 350 350 460 460 - 4. 9

02 Bed Room (Sleeps 04) Air

Conditioned 570 570 650 650 - 4. 9

Bangaram Island (AP) (Subject To Minimum 10 Nights)

Standard Hut 320 320 390 390 150 -

Deluxe (Sleeps 4) 580 580 640 640 150 -

Bangaram Island (AP)

Standard Hut 355 355 430 430 150 -

Deluxe (Sleeps 4) 645 645 715 7150 150 -

SwaSwara,Gokarna (CP)

Garden Villa 300 300 375 375 50 12

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ANNEX 8 : ORGANIZATIONAL CHART OF SPORTS.

Board of Directors General Body

Managing Director

General Manager

DY. General Manager

AGM Kadmat

AGM Head Qtr.

AGM Kochi

Manager Kavaratti

Manager-Minicoy

Manager Kalpeni

Chairman (Administrator), Vice – chairman (Collector)

General Manager (Director, DOT), Deputy General Manager (Tourism officer)

Asst General Managers, Managers

Asst Manager (water sports) Asst Manager (Housekeeping)

Water sports Assistants

CHAIRMAN

- 127 -

ANNEX 9

XTH PLAN SCHEMES ACHIEEMNTS (Rs. In 000’s)

10th

Plan ( 2002-03 to 2006, January) Break up for 2006-07

Target Achievement Target

Sl

No

Scheme

Financial

(Outlay)

Physical Financial

(Exp up

to

Jan 06)

Physical Financial Physical

1 2 3 4 5 6 7 8

1 Infrastructure and HRD Posting of Staff Training of Personnel Proc of W/S equipts Proc of Furnish items Grant in Aid Minor Works Scheme Total

24 1948 2850 1555 1516 498 8391

6

325 65 5 0 9

410

2

1898 2450 1980

0 398

6728

0 144 25 10 0 8

187

2 1000 700 300

0 298 2300

2 50 6 5 0 5 68

2 Tourism Marketing Printing Pub Materials A/V Equipt/ CD/film Fairs and Festivals Office Autom’n TIC Scheme Total

4500 2500 4853 1252

13102

100000

9 18 3

100030

4090 3000 3930 1100 12120

45000

12 23 8

45043

1200 700 600 100 2600

30000

2 10 1

30013

3 Opening of More Islands for Intl Tourism Lease Rent Scheme Total

5800 5800

7 7

5600 5600

13 13

200 200

5 5

4 Equity Participation with LDCL Grant/Share Capital Scheme Total

6000 6000

60000 60000

0 0

0 0

0 0

0 0

5 Tourist Ship Feas’lity Study T Ship Aquis’n of SpeedBoat Scheme Total

400

30225 30625

1 3 4

300

32500 32800

0 0 0

300

15000 15300

1 1 2

6 Civil Work under Tourism Con’n HC/DiveCenter Scheme Total

25800 25800

35 35

23640 23640

26 26

5000 5000

5 5

TOTAL 89718

160482 80888 45269 25400 30093

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ANNEX 10

TOURIST ARRIVALS, 1992-2002

Source:Lakshadweep Administration http://lakshadweep.nic.in/Tourism

Tourist Arrivals, 1992-2002

Number of Tourists Year Indian Foreign Total

1992 – 1993 2,287 1,150 3,437 1993 – 1994 2,965 408 3,373 1994 – 1995 3,166 1,059 4,225 1995 – 1996 3,470 1,210 4,680 1996 – 1997 3,502 1,359 4,861 1997 – 1998 2,900

1,223 4,123

1998 – 1999 1,999 736 2,735 1999 – 2000 1,379 741 2,120 2000 – 2001 2,992 871 3,863 2001 – 2002 3,259 539 3,798

- 129 -

ANNEX 11

ORGANIZATIONAL CHART FOR PROPOSED CORPORATE BODY ;LTDCL, LAKSHADWEEP

- 130 -

ANNEX-12 INCOME STATEMENT OF LTDCL FOR 2011-12

Total no. of cottages(double bed) on inhabited islands=525, uninhabited islands=150 Water sports like scuba diving charges as per Annex 7=US$ 65 per day Cottage Tariffs for uninhabited island(BIR) per day for double bed Average=US $470 Cottage Tariffs for inhabited island(AIBR) per day for double bed Average=US $240 Fair for Ship from mainland to Lakshadweep Rs 3000 to Rs 7000(To and Fro), Average=Rs.5000 No of ships 2 passenger-cum-cargo of 250 seats and 100tons each, and 150 seat high speed z (Assuming that budget of cruise ship utilized for above 2 ships in March 2008) vessels(3) Total seats will be 500+450=950 seats Assumption : Operating and Maintenance cost for Resorts/cottages=50 percent of gross revenue

Operating and Maintenance cost for ships =25 percent of gross revenue Occupancy of cottages =60 percent Helicopter occupancy= 50 percent Occupancy of seats in ship =50 percent Helicopter Operating and Maintenance=20 percent of gross revenue Total no days in season for traveling=250 days Water sports O & M=20 percent Freight Tariff =Rs 3000 per ton Capacity utilization 50% of gross revenue Total Investment and operating and maintenance in the beginning year i.e.2011-12 Life of all assets =30 years Rs 6886.5 million=US $160.16 million Total Assets=Rs 4523 million= US $ 105.19 million Salvage Value of ships/hel 10 percent Total no of average to and fro trips by a ship =83 Rs 300million=US $ 6.98 million Total no tourists traveling by ships=39425 1US$=Rs. 43 as on23/5/2008 INCOME STATEMENT OF LTDCL FOR 2011-12 IN US DOLLAR Year 2009-10 2010-11 2011-12 A-Gross Revenue In million

Revenue from uninhabited resorts 10575000 11209500 11.88 Revenue from inhabited resorts 18900000 20034000 21.24 Revenue from Ships from tourists 4584302.3 4859360.5 5.15 Revenue from Ships from 200 tons Cargo 579069.77 613813.95 0.65 Revenue from Helicopter 300daysx 4 interisland trips @$125 1500000 1590000 1.69 Revenue from water sports,assuming 25 percent travelers will avail facilities 640656.25 679095.63 0.72

Total 36779028 38985770 41.32 B-Salary and Administrative Expenses 2441860.5 2588372.1 2.74 C-Operating and Maintenance Cost

Inhabited and uninhabited resorts cost 14737500 15621750 16.56 Ships 1146075.6 1214840.1 1.29 Helicopter 300000 318000 0.34 Water sports 128131.25 135819.13 0.14

Total 16311707 17290409 18.33 Gross Total( B+C) 18753567 19878781 21.07 Gross Profit A-(B+C) 18025461 19106989 20.25

In million 18.03 19.11 20.25 Depreciation 3.27 3.27 3.27 Profit before tax 14.75 15.83 16.98

30 % tax 4.43 4.75 5.09 Net Profit 10.33 11.08 11.89

Payback period, if growth is @7 percent will be less than 10 years NET PROFIT MARGIN IN 2011-12=Net income/Gross RevenueX100= 28.78

NOTE: Inflation is assumed at 6 percent in deriving calculation for 2011-2012, and straight-line method of deprecation is used. ROA= Net Income/Total Assets= 0.1130336 ROA=11.4 percent