ADVISORY SUPPORT FOR THE DEVELOPMENT OF THE BUDDHIST CIRCUIT IN SOUTH ASIA Strategy to Generate Economic and Job Opportunities for Local Communities JOB CREATION AND WOMEN’S PARTICIPATION IN TOURISM: MAIN CHALLENGES AND ENTRY POINTS FOR ACTION Final Draft, January 2018 Acknowledgements South Asian Buddhist heritage is indisputably some of the most important in the world. Several places in the region are directly linked to the historical Buddha’s life and the spread of his philosophy around the world. Despite the spiritual value of these places and their historical linkages, they have not been successfully developed, managed or promoted as an integrated whole in the way that other, similarly significant places around the world have.1 As a result, only a small fraction (0.005%) of the world’s estimated 490 million Buddhists visit the key Buddhist sites of South Asia each year. Recognizing this, South Asian countries are committed to developing their Buddhist heritage as a holistic and inclusive pilgrimage route and tourism product. To this end, countries across the region have requested the World Bank’s advisory and technical support based on its long experience in unlocking tourism for lasting poverty reduction and inclusive growth goals. In response, the World Bank, with the financial support of the Government of Australia, has formulated and is implementing a Program for the Development of the Buddhist Circuit in South Asia, which this study is part of. This report was prepared under the coordination of Stefania Abakerli (Coordinator, Program for the Development of the Buddhist Circuit in South Asia, World Bank) by a team of specialists from Emerging360 including Seth Fleisher (Project Leader, SME Expert), Dama Yarcia (Lead Economist), Muhammed Nahar (Tourism Lead), Marjorie van Strien (Value-Chains and MSME Tourism Lead) and Deepa Shakya (Gender Lead). Guidance throughout the research was also provided by Sanjay Saxena (TSCPL), Hiska Reyes and Vincent Palmade (World Bank). The team would also like to thank all community members, entrepreneurs, NGOs and government officials interviewed during local consultations and assessments. Your experience and insights were inspirational. Contents Introduction ..................................................................................... 1 1.1 Inclusive Economic Growth ......................................................... 1 1.2 The Tourism Sector in Sanchi ..................................................... 4 1.3 The Tourism Sector in Sarnath .................................................... 5 1.4 The Tourism Sector in Khajuraho ................................................ 6 Methodology.................................................................................... 9 2.1 Objectives of the Study ............................................................... 9 2.2 Destination Lifecycle ..................................................................11 2.3 Tourism Global Value Chain Framework ....................................12 Current Situation and Challenges .................................................13 3.1 Businesses / Self-Employed .......................................................14 3.2 Employees / Wage Earners ........................................................17 3.3 Unemployed ...............................................................................19 Tourism Value Chain Analysis ......................................................24 4.1 Market Segments .......................................................................24 4.2 Value Chain Mapping .................................................................26 4.3 Entrepreneurship and Employment in the Sub-Chains ...............27 4.4 Tourism Value Chain Analysis: Sanchi .......................................38 4.5 Tourism Value Chain Analysis: Sarnath .....................................40 4.6 Tourism Value Chain Analysis: Khajuraho..................................42 Gap Analysis ..................................................................................44 5.1 Gaps in Support Provision ..........................................................44 5.2 Models to Build On .....................................................................46 Entry Points for Change ................................................................53 6.1 Actionable Recommendations for Sanchi, Sarnath, and Khajuraho..................................................................................54 6.2 Additional Urgent Recommendations for Khajuraho ...................60 6.3 A Road Map for the Buddhist Circuit and Beyond .......................61 6.4 Potential Collaborators ...............................................................64 6.5 Key Potential Catalysts ..............................................................64 6.6 Next steps ..................................................................................67 Appendix ........................................................................................65 A. Schemes and Programs Consulted .............................................65 B. Government of India Budgetary Allocation (2017-18) Under Relevant Support Schemes...............................................68 C. Sample Storytelling Tags ............................................................69 Introduction Introduction India, according to forecasts of the World Travel and Tourism Council (WTTC), will be the fastest growing destination in the world for leisure-travel spending in the next decade, faster than Thailand or China. Among Indian States, Uttar Pradesh is one of the top destinations for foreign arrivals. In terms of domestic tourism, which comprises 98% of total tourist arrivals, Uttar Pradesh ranked 2nd and Madhya Pradesh 4th. Sarnath, Sanchi, and Khajuraho, the focal points for this research study, represent three distinct types of heritage tourism destinations across a spectrum in India. Khajuraho, while not a Buddhist Circuit destination per se, currently plays a role in providing the only direct point of air connectivity linkage between Sarnath and Sanchi. Furthermore, these three distinct destinations are seen as representative cases for many other sites along the Buddhist Circuit. 1.1 Inclusive Economic Growth With inclusive economic growth, we seek to advance equitable opportunities for economically active populations by ensuring sustainable income opportunities and by reaching the most vulnerable segments of local communities. Local people in this research study are defined as those living within 15 km of the cultural heritage sites, in the urban and surrounding rural areas. Within that population, our research focuses on opportunities for disadvantaged groups: women, youth, and those below the poverty line. The host communities (local people) of Sanchi, Sarnath and Khajuraho are generally interested in being involved in, and seek to benefit from, tourism--through both entrepreneurship and gainful employment. They are also an important asset to the uniqueness of the tourism destinations. However, they face a multitude of constraints to fully accessing the tourism industry. Women - A study in 2014 by the United Nations World Tourism Organization (UNWTO) and the International Labour Organization (ILO) confirms that tourism is a key job-generating sector with almost twice as many women employers as other sectors. And the tourism sector serves as an important entry point for those entering the labor market and those without opportunities in other sectors. In addition to creating opportunities for high-skilled workers, the industry plays a key role in creating opportunities for low-skilled workers, minorities, migrants, youth, the long-term unemployed, and women who prefer part-time work due to family responsibilities1. This is particularly relevant for our areas of study, as the incidence of poverty in the states of Madhya 1 World Tourism Organization (UNWTO) & the International Labour Organization (ILO), Measuring Employment in the Tourism Industries, 2014 as cited in WEF. 2017. The Travel & Tourism Competitiveness Report 2017. 1 Introduction Pradesh (31.65%) and Uttar Pradesh (29.43%) is well above the national level (21.92%)2. Women comprise almost half of the population in Madhya Pradesh (48.2%) and Uttar Pradesh (47.7%), and youth (ages 15-24), a high share of the population in Madhya Pradesh (20.65%) and Uttar Pradesh (21.36%) relative to the national average (19.1%)3. Overall, when it comes to participation in the labor force in India, women suffer from significant parity gaps. Figure 1: In India Women… Comprise only Are concentrated 23% of the in manual or labor force low-productivity sectors Have only Contribute only 66% of men’s 17% of GDP access to financial services Spend 10 times Suffer from a as many hours on severe Gender unpaid care work Parity gap in as men wage-setting Youth - The 2011 Census counted 563 million young people between the ages of 10 to 35 with about 70 per cent living in rural areas, which makes India home to the largest youth population in the world. India defines youth as those aged 15 to 30 in its 2014 National Youth Policy (Ministry of Youth and Sports), constituting 27.5% of the population. According to an ILO study of 2013, the unemployment rate is even higher among educated youth who are looking for better quality jobs4. In addition, a major long-term challenge in India is that many youth enter the labor market at an early age, because of poverty and poor human capital endowment. They cannot afford to remain unemployed for long and, as a result, pick up activities characterized by low productivity and low wages. According to 2013 ILO research, over 50% of young Indian urban males are working in the services sector (including tourism), and rural males are increasingly looking for non-farm opportunities. Young urban women tend to become self- employed, while among rural young women, low-wage agricultural employment is particularly widespread. 2 Reserve Bank of India. Handbook of Statistics on Indian Economy, Table 162. Number and Percentage of Population Below Poverty Line. 2011-12 (Based on MRP Consumption). 3 Census, 2011. 4 Mitra, A. and Verik, S.(2013) Youth employment and unemployment: an Indian perspective. ILO Asia-Pacific Working Paper Series. 2 Introduction Tourism is a labor-intensive service industry, covering a huge range of human services that vary significantly in the nature of the work and skills required. Within the context of the three destinations in this research study, specific opportunities have been identified to promote stronger, more direct involvement of local people through sustainable and inclusive entrepreneurship, as well as new and upgraded job opportunities. These will not only lead directly to improved livelihood opportunities for locals, but will also stimulate broader economic growth via the multiplier effect of tourists’ expenditure. For instance, money spent by a tourist in a hotel helps support that business as well as jobs within the hotel, but it also indirectly supports additional jobs elsewhere in the local economy through backward linkages with suppliers of raw food, furniture, amenities, etc. The more that local people are integrated into the tourism value chain through enterprises and jobs, the stronger this multiplier effect. The multiplier effect continues to amplify until the money originally spent eventually “leaks” out of the local economy, for instance, through purchase of goods and services outside the destination. Where possible, we have tried to seek interventions that will help keep expenditure within the destination for as long as possible. There is a related multiplier effect that can be achieved by extending the amount of time a tourist spends in a destination. For example, if the average length of stay for a tourist is increased by half a day through the provision of new, compelling local activities, tourists will spend additional money not just on those activities, but also on additional food and beverage purchases, transportation, shopping, and possibly even accommodation required or desired to support that extended stay. And a good portion of these extended services can potentially be provided by local women and youth. In fact, the tourism sector is uniquely positioned to help bring more women and youth into the labor force in India for several reasons. Figure 2: Opportunities for Women and Youth in the Tourism Sector Jobs often place less Greater flexibility Increased Focus on Tremendous emphasis on formal in terms of entrepreneurial inter-personal opportunities training and part-time and options that do and hospitality via the sharing education home-based work not require skills economy significant start- (e.g., women comprise up financing 55% of global Airbnb host community) Bridging the gender gap—primarily by achieving labor force participation parity—would increase GDP in India by over US$700 billion annually by 20255. 5 McKinsey & Co. (2015). The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth. McKinsey Global Institute. 3 Introduction 1.2 The Tourism Sector in Sanchi Sanchi is a Nagar Panchayat (town) in the Raisen district of Madhya Pradesh, consisting of 77 Gram Panchayats covering approximately 214 villages. The key attraction is the “Great Stupa” originally constructed under emperor Ashoka in the third century BCE, which was inscribed as a UNESCO World Heritage Site in 1989. Sanchi can be considered an emerging tourism destination. Access to Sanchi has become easier with the completion of highway connections with Bhopal and Vidisha in 2006, which expanded the visitor market significantly. Since then, domestic visitor numbers have been slowly increasing, a clear tourist season and key markets can be distinguished, and a handful of entrepreneurial locals have begun offering a few basic food and lodging facilities based on limited investment and understanding of the demand. Recognizing the potential for tourism to promote economic growth, various government departments have begun developing and investing in infrastructure. Recently, the main access road towards the Great Stupa has received walkways, streetlights and decorative statues, as well as a public toilet facility and waste bins. However, apart from this one road, other areas of town have yet to be integrated in the concept. More importantly, visitors have yet to be introduced to what Sanchi as a destination has to offer beyond the Great Stupa. Most visitors spend a few hours at the archaeological site and may stop at one of the local restaurants for a meal on their way out of town. Accommodation offerings are severely limited and of low quality, and with limited activities at the destination, the majority of overnight visitors stay at nearby Bhopal (the most important point of access to Sanchi). Local participation in the tourism value chain remains extremely limited, mainly through low- quality employment in hotels, restaurants and excursion sites that are owned and managed by people from out of town—the participation of women and youth appears negligible. However, visitors are decidedly interested in accessing more services and activities. Sanchi is the center of a region with a number of stupas, temples and other heritage remains that are rarely promoted and offer untapped potential to increase visitors’ length of stay. Perhaps Sanchi’s most unique selling point is its village-like feel. The main source of livelihood for the local population remains farming of grains (mainly rice) and vegetables, which are rotated in different seasons. Sri Lankan pilgrims and religious leaders, who have frequented Sanchi for many years, reported that Sanchi’s value “would be damaged if any artificial structures such as theme parks or shopping malls were to appear.” As such, we believe that proposed local initiatives such as the introduction of Buddhist theme parks and sound-and-light shows pose significant risks to the integrity of the destination and its appeal as a tourism site. There is, now, a great opportunity to build on Sanchi’s uniqueness in a way that will benefit the local people and convince visitors to spend more time at the destination. 4 Introduction “Tourists generally come to visit the Stupa and then they leave again. We don’t have much chance to interact with them.” -- Shopkeeper Table 1: Number of Visitors, Sanchi Footfall 2012 2013 2014 2015 2016 % change 2012-2016 Domestic 212,494 220,010 267,327 281,939 298,993 +41% International 6,789 6009 6123 4,949 5,429 -20% Source: Archeological Survey of India, 2017. 1.3 The Tourism Sector in Sarnath Sarnath is a Gram Panchayat, part of the Varanasi district in the state of Uttar Pradesh, and the site where the Buddha delivered his first sermon. The ward of Sarnath Municipal Corporation (no. 30) encompasses Sarnath Heritage zone and there are 2,089 households with an average of six persons in every family. Sarnath is of great importance as a pilgrimage site for Buddhists from all around the world and has been attracting large numbers of religious and secular visitors. A number of Buddhist- majority countries have established temples and monasteries in town. In addition, Sarnath’s proximity to Varanasi, a world-famous Hindu site, makes for a compelling offering whereby most tourists combine the two destinations on a single visit, though the overwhelming majority base in Varanasi and make just a fleeting stop in Sarnath to visit the heritage site. Sarnath is a maturing tourism destination, experiencing seasonal mass tourism from October till March. Local people have found ways to address their livelihood needs by engaging in tourism through micro and small entrepreneurship and employment, and a tangible and cohesive value chain has formed around the tourism industry. However, tourism has developed at a pace faster than the local governing bodies have been able to regulate, resulting in a disorganized site and neglected opportunities for maximizing benefits. To continue catering to the needs and wishes of a diversifying market, the destination requires more distinct accommodation and restaurant options, for instance to cater to middle and higher end tourists. There is a growing demand for larger and more elaborate development, which may 5 Introduction provoke an increasing influx of outside investors and entrepreneurs. While this presents opportunities, it is important to ensure that involvement of and benefit to local people is sustained. Tour operators and the Tourism Department describe Sarnath as an “escape from the hustle and bustle in the crowded places of Varanasi.” At the same time, uncontrolled sprawling and mushrooming development are now putting this unique selling proposition at risk. In addition, lack of adequate signage, educational guidance, pedestrian walkways, and safe, comfortable opportunities to interact with locals contribute to shorter tourist visits, fewer repeat visits, and relatively little income generated for the local community. Table 2: Number of Visitors, Sarnath Footfall 2012 2013 2014 2015 2016 % change 2012-2016 Domestic 696,359 730,804 791,233 798,130 824,737 18.4% International 298,077 286,066 298,200 301,544 318,579 6.9% Source: Uttar Pradesh State Tourism Department Corporation, 2017. Note that UPSTDC counts tourists from SAARC and BISMTEC countries as domestic tourists, leading to severe over-reporting of domestic numbers and under-reporting of international numbers. “Sarnath is much calmer and more peaceful than Varanasi. We prefer to base our tour groups here and make day trips to Varanasi.” -- Tour operator from Karnataka with group staying in SGT Plaza Hotel, Sarnath 1.4 The Tourism Sector in Khajuraho Khajuraho is a town of 22,000 inhabitants in the Chhatarpur district of Madhya Pradesh. Its most prominent feature is the Khajuraho Group of Monuments, a remarkable UNESCO heritage site constructed under the Chandela dynasty largely between 950 and 1050 CE. Contemporaneous with several of the great early temples in the Angkor complex in Cambodia, and in many cases even better preserved, the site consists of roughly 25 Hindu and Jain temples renowned for their nagara architectural style and erotic sculptures inspired by Indian tantric practices and the Kama Sutra. The new Khajuraho airport, which officially opened in 2016, is architecturally impressive and aesthetically world-class. Originally intended to serve as an international airport, instead it now hosts an average of only 1-2 incoming flights per day, all domestic. 6 Introduction Khajuraho is a destination in decline. Six years ago, when Jet Airways took over the primary air route, it reduced and eliminated service, and with a near-monopoly, radically increased prices, which now average Rs. 12,000 - 26,000 in the high season for the daily 45-minute, one- way trip from Varanasi to Khajuraho. In addition, frequency and connectivity of rail service, as well as necessary road maintenance, have not kept pace with the needs of a healthy tourism industry. Organized international mass tourists were historically the town’s primary customers, and artificial facilities grew up to supplant authentic experiences. But tourism numbers dropped dramatically as connectivity challenges increased cost and logistical complexity for both tour groups and free independent travelers (FITs). While ASI has recorded a drop of 33% in total footfalls to the UNESCO site between 2012 and 2015, the former GM of the now-closed Taj Chandela and the current GM of the Lalit in Khajuraho estimate that traffic to their hotels from international tour groups decreased by nearly 80% over this time period. There has been a similarly significant drop in international FITs. Fortunately, at the same time, traffic from Indian tourists has been gradually increasing, and low prices are attracting Indians from the region with the promise of inexpensive wedding facilities. Nevertheless, the impact of declining international tourism is currently felt at every level. Accommodation facilities from five-star hotels to guest houses have been shuttered, restaurants have laid off workers and closed, a glut of guides and rickshaws compete with each other for limited FITs each day, and shop owners estimate that by the end of this season, 50% of the current tourist-focused retail shops will have permanently closed. There is now significant under-utilization of tourism infrastructure in Khajuraho, and tourism businesses are degrading, decreasing staffing, and closing down. The destination can either continue to decline or improve connectivity, promotion, and offerings, and enter a phase of rejuvenation. There is an urgent need for innovation, revamping the destination, and implementation of new marketing strategies. There is also a unique opportunity to frame this change within the context of meaningful inclusive economic development. “Tourism in Khajuraho is in the ICU. Without adequate government support, tourism here is dying.” -- Licensed guide 7 Introduction Table 3: Number of Visitors, Khajuraho Footfall 2012 2013 2014 2015 2016 % change 2012-2016 Domestic 260,946 276,434 264,572 279,467 279,390 7.00% International 97,724 89,511 74,706 65,034 66,035 -32.40% Source: Archeological Survey of India, 2017. 8 Methodology Methodology 2.1 Objectives of the Study The World Bank has engaged Emerging360 to: 1. Provide an overview and strategic assessment of tourism-related value chains (VCs) along three Buddhist Circuit destinations, Sarnath (U.P.), Sanchi (M.P.), and Khajuraho (M.P.). 2. Identify constraints to local economic development, value chain upgrading, and challenges to increasing the participation of women and youth within the VCs, and 3. Conduct a gap analysis and develop a suite of actionable recommendations geared towards improving the overall competitiveness and development of these VCs, with a focus on women’s participation. Emerging360’s engagement has consisted, first and foremost, of a research study involving collection and analysis of both primary and secondary data, including: 1. Literature review: Review of relevant literature on women’s participation in the tourism and MSME sectors, government policies and programs, and donor and civil society initiatives relevant to the target markets, plus analysis of a range of available secondary data. 2. Analysis of survey data and published statistical reports: Our research team has analyzed a range of relevant datasets and published reports from government statistical offices, including the 2015/16 Survey on Unincorporated Non-agricultural Enterprises (except Construction), and online and offline datasets from the social, private, and public sectors, as well as databases of multilateral agencies. 3. Field-based community research: The team completed three scheduled intensive field studies— the first to all three sites, the second a deeper dive focused on Sarnath and Sanchi, and the third, again to all three. We’ve spent nearly 150 person-days in the field and engaged substantively with hundreds of stakeholders through: ● Expert interviews with relevant private sector, governmental and NGO stakeholders, local leaders, and experts at the state, municipal, and panchayat level to better understand initiatives and approaches that will help promote greater local community development at the three destinations. 9 Methodology ● Interactive focus groups with sector associations, self-help groups, and other community participants. ● Formal and informal community interviews with representatives from the target groups in hotels, restaurants, markets, on the streets, and in surrounding villages. The team successfully conducted more than a third of these interviews utilizing mobile devices for structured data collection. This anecdotal sampling of hundreds of businesses, self- employed individuals, and employees has helped flesh out a detailed picture of the tourism value chain at each destination, further reinforced by analysis of available survey data and statistical reports. Table 4: Community interactions: Sanchi, Sarnath, Khajuraho Study Areas Experts Interviews Focus Groups Community Interviews (participants) Conducted Conducted Sanchi 12 8 (80) 90+ Sarnath 16 10 (100) 130+ Khajuraho 12 5 (50) 130+ While in the field, the Emerging360 team has deployed Human-Centered Design (HCD) approaches to better understand the target population’s needs and constraints and to co-create actionable recommendations. These include: ● 7 core mindsets: Empathy, optimism, iteration, creative confidence, making, embracing ambiguity, and learning from failure. ● Meeting the target audience where they are—in their homes, businesses, temples, markets, etc. ● Working with the community first to determine what is desirable, then later exploring which parts are technically feasible and operationally viable. ● Facilitating deep, detailed conversations, prioritizing depth more than breadth. ● Synthesizing this data as the basis for our inspirations when developing recommendations. ● Striving to get tangible solutions prototypes into the audience’s hands as early and often as possible. These can be simple, such as maps, drawings, and even cardboard cutouts. We’ve utilized a variety of concrete solutions-generation activities with the target groups, including use cases, card sorting, simulations, etc. ● Testing and iterating on early concepts of our recommended solutions with the target audience and key stakeholders in an agile manner. Field findings have been compared with statistical information at the district level through the Survey on Unincorporated Non-Agricultural Enterprises (excluding construction). This nationwide sample survey of 209,113 enterprises conducted from July 2015-July 2016 offers a 10 Methodology view into the characteristics of unincorporated non-agricultural enterprises in India. The survey covers 28,792 enterprises in Uttar Pradesh, including 857 in the Varanasi district (which includes Sarnath), 17,434 enterprises in Madhya Pradesh, including 291 in the district of Raisen (which includes Sanchi), and 461 in the district of Chhatarpur (which includes Khajuraho). Responses from these enterprises can be extrapolated to infer characteristics of enterprises across the larger population, disaggregated by major activity and geographic location. This, in turn, provides a window into the landscape of tourism-related enterprises in the districts that comprise the target destinations for our study. 2.2 Destination Lifecycle Destinations are dynamic and change is inevitable. It is widely accepted that destinations generally follow a life cycle, the model of which is depicted below and can be used to shed light on development and the successive stages destinations go through over time. In reality, the life of a destination is more complex than the pattern depicted in the model, and at times, the characteristics displayed may span two or even three different stages. In addition, destinations can move through a series of cycles, and the model does not necessarily provide aid in predicting fluctuations in visitor numbers, as the conditions of a destination are conditioned by a dynamic interplay of actors, relations, policies and circumstances. However, the general message is that if destinations are not managed effectively and appropriately, they are likely to miss out on opportunities and fall into decline. The three destinations in this research study are currently at different stages in their life cycles. Generally, opportunities for local economic development--especially for disadvantaged men, women and youth--can grow as a destination transitions through its life cycle (unless it’s declining). However, to maximize benefits, growth needs to be facilitated and regulated. Figure 3: Destination Life Cycle6 Rejuvenation Reduced growth CRITICAL RANGE OF Stagnation ELEMENTS OF CAPACITY Stabilization Consolidation Number Decline of Tourist Immediate decline Development KHAJURAHO SARNATH Involvement SANCHI Exploration Time Source: Butler (1980) as adapted in Miller and Gallucci (2004) 6 As proposed by Butler, 1980 as Tourism Area Life Cycle (TALC) model and adapted by Miller and Gallucci, 2004 11 Methodology 2.3 Tourism Global Value Chain Framework Tourism is part of a global value chain that has benefited from profound changes in international trade relations, communications, transportation, and technology over the past three decades. Visitor groups from across the globe can be tapped as potential markets. For many countries, especially developing countries, achieving a thriving tourism industry will depend on their success in accessing these markets, competing successfully, and capturing gains in terms of economic development, capability building, and poverty reduction. At the same time, global tourism is becoming increasingly competitive. To take advantage of global market opportunities and cope with challenges, destination countries must continuously improve their competitiveness. Our tourism value chain analysis focuses on the relationships among the actors in the tourism sector, and on their implications for inclusive development, including sustainability and competitiveness. As part of our value chain analysis, Emerging360 has mapped the flow of money and distribution through the local economy, as much as possible via a gender lens. This has helped elucidate existing and potential cash flows to poor people from tourism (directly and indirectly). While calculations are approximate, they’ve helped us quantify and compare options. We then strengthened initial projections with our findings from the wider context surrounding the tourism value chain. To this end, we’ve examined five types of value chain interventions based on the Tourism Global Value Chain (GVC) framework, evaluating “horizontal” and “vertical” linkages as well as “supporting markets”7 at the Circuit level, while prioritizing the participation of the poor in value-chain analysis as well as the action planning and solutions development process: Economic Upgrading ● Functional upgrading: MSMEs add more services / capabilities ● Process upgrading: they introduce processes to increase efficiency ● Product upgrading: they move to higher-value products ● Chain upgrading: they connect to higher-level actors or enter VC from different sector/ sub- sector Social Upgrading: improve working conditions and create higher-skilled, better-paid jobs Figure 4: Five Pillars of Economic Value Chain Upgrading Functional Process Product Chain Social 3UPGRADING FUNCTIONAL CHAIN SOCIAL 5 UPGRADING PROCESS PRODUCT 1UPGRADING 2 UPGRADING 4 UPGRADING 7 Vertical linkages refer to relationships between enterprises that support them to effectively meet market demand and ensure the competitiveness of the value chain. Horizontal linkages refer to formal and informal cooperative arrangements between enterprises, such as member organizations, associations, clusters, societies, etc. Supporting markets offer products and services in support of a range of business functions, such as financial services, business consulting, advertising, etc. 12 Methodology Source: Humphrey and Schmitz (2002). 13 Current Situation and Challenges Current Situation and Challenges In this section, we identify constraints faced by three distinct groups relative to the tourism value chain: ● “Businesses” (those with one or more employees in addition to the owner) and “self-employed workers” (those with no employees) ● Wage workers in formal and informal (often home-based) employment, and ● Those who are unemployed, especially women and youth Most constraints are magnified by informality, which has implications for control of resources, protection under contracts, wage-setting, and capacity, and access to finance, materials and markets. 3.1 Businesses / Self-Employed According to the Survey on Unincorporated Non-Agricultural Enterprises, there are roughly 63.4 million unincorporated non-agricultural enterprises in India. Approximately 8.7 million or 13.8% of these are engaged in activities directly related to tourism, including accommodation, travel agencies, food and beverage service, transportation, creative, arts and entertainment activities. Own Account Enterprises (OAEs) or what we refer to as “self-employed” in this report comprise 86% of the estimated tourism-related enterprises in India, the rest are businesses. Predominance of self-employment (relative to business-ownership) in entrepreneurial activities is even more pronounced for females (96.4%) relative to males (83.9%). Common constraints Our field research, which is supported by analysis of the survey data, has identified six key constraints common across businesses and self-employed enterprises in the tourism sector in our target destinations. 14 Current Situation and Challenges Figure 5: Challenges for Businesses and Self-Employed in Our Destinations 1. Lack of demand Too few tourists stay for too little time, 4. Virtually no existing models spend too little in the community, of women-owned businesses seasonality to change social perceptions (Cited by 100% of artisans, restaurant (Women-owned businesses are owners & souvenir shops; 63% of nearly non-existent in target rickshaw drivers; 67% of homestays) areas) 5. Women face greater constraints to starting a 2. Local communities have limited business: education, skills, understanding of market or how to access to collateral/finance, innovate burden of caring for families (100% of souvenir shops report falling (Women considered unhireable in demand & difficulty making sales) lodging, restaurants & shops) 3. Lack of education, training, skills, knowledge of enterprise management, 6. Informality reduces access to customer service, hygiene, marketing, financing and credit; enforceability networking, etc. of contracts and collection of (Non-availability of skilled labor major receivables; & government support constraint for lodging and F&B) (Cited by 75% of bicycle rickshaw drivers, 29% of shop owners; potters don’t collect payment for 12 months) The main challenge entrepreneurs in our destinations are facing across the board is lack of demand. Tour operators and independent travelers do not spend more time and money in the target communities for a variety of reasons, as clarified in the following figure. 15 Current Situation and Challenges Figure 6: Reasons for the Demand Challenges Furthermore, although small enterprises are generally thought to be pro-poor, inclusive, labor- intensive models for economic growth, women’s participation in the sector is low. As of 2015-16, there are far fewer women entrepreneurs than male entrepreneurs in the tourism sector in India. This disparity is considerably more pronounced in Varanasi, Raisen, and Chhatarpur districts, where men comprise 84% to 89% of self-employed workers and where women-owned businesses constitute only 2% to 5% of the total, though women comprise nearly half the population in these areas according to the last national census. Gender disparity in business ownership in the target destinations is significantly worse than the national average, which is visualized in the tourism value chain map in chapter 4. 16 Current Situation and Challenges Figure 7: Enterprise Type by Ownership Major Tourism-related Activity (%), 2015/16 100.00 5.33 2.38 1.89 11.46 90.00 4.50 10.42 14.48 19.33 80.00 70.00 60.00 50.00 95.59 94.67 90.63 92.82 88.54 40.00 85.78 84.16 76.07 30.00 20.00 10.00 - Self Business Self Business Self Business Self Business Employed Enterprise Employed Enterprise Employed Enterprise Employed Enterprise Varanasi Raisen Chhatarpur India proprietary (male) proprietary (female) partnership others Note: Self Employed are Own Account Enterprises; Business Enterprise are Establishments. Source: Survey of Unincorporated Non-Agricultural Enterprises 2015/16. Figure 8: Nature of problems (most severe problem) faced in enterprise operations, 2015/16 Tourism-related activities, by Type of Enterprise 100.00 90.00 80.00 33.52 37.81 shrinkage /fall of demand 70.00 non-recovery of financial 60.00 16.81 dues 50.00 20.48 non-availability of labor as 12.18 0.69 40.00 and when needed 30.00 12.12 18.04 non-availability/high cost of 20.00 8.25 4.06 credit 10.00 17.12 18.91 - Business Self-Employed As highlighted by Delhi-based tour operators, there is significant scope for women service providers in the hospitality and tourism industry, based on demand from international tourists. To achieve this, strong women-owned business models are needed in all three destinations to set examples for the communities. 3.2 Employees / Wage Earners Tourism in India has developed as an instrument of income and employment generation, contributing 8.78% of total employment in the country8 for nearly 20 million people. But tourism 8 Iqbal BA and Sami S (2016) Global and India’s tourism scenario. Journal of Tourism and Hospitality 5(1): 193. 17 Current Situation and Challenges can only flourish if the industry can employ qualified staff via a sustainable workforce, as this is key to quality service delivery. In addition, the proportion of tourism jobs secured by local people is a major variable affecting the impact of tourism on local economies. Data indicates that the tourism sector currently contributes relatively little to employment- generation in these destinations, as self-employed enterprises--which constitute the largest number of tourism sector enterprises (around 89% to 93% in our 3 localities, higher than the national average of 86%)--operate without hiring any regular workers. This finding also has major implications for labor productivity, quality control, flow of income, and exposure to demand shocks for communities in these locations. In Madhya Pradesh, 53.6% of the total male population is employed full- or part-time, and approximately one-third of women is employed. Figures are lower for Sanchi and Khajuraho, where employment differences for female workers are considerably more pronounced. Figure 9: Percentage of Working Population – by Gender Madhya Pradesh 60.0% 53.6% 49.5% 48.4% 50.0% 43.5% 44.4% 41.4% 40.0% 32.6% 30.0% 20.3% 18.1% 15.5% 20.0% 14.3% 14.5% 7.9% 10.1% 8.1% 10.0% 4.8% 6.5% 4.1% 0.0% Worker (among Main worker Marginal worker Worker (among Main worker (among Marginal worker total population) (among workers) (among workers) total population) workers) (among workers) Female Male MP Khajuraho Sanchi Source: https://indikosh.com/ In Uttar Pradesh, 47.7% of men and 16.7% of women are working. However, Sarnath significantly lags state-level averages with only 44% of men and 7% of women working.9 Across India, the majority of wage earners is engaged in informal employment. In fact, from 2011-2012, it was estimated that 80-92% of the urban workforce was informally employed.10 One of the drivers of this trend is greater use of contract and other forms of casual labor (i.e. workers without access to social security). Interestingly, among casual labor workers, wages seem to be somewhat equalized across gender. Based on the National Sample Survey 2011- 2012, wages of women casual laborers aged 15-59 are beyond parity with males in urban areas, at a ratio of 1.64 for India, 1.24 in Uttar Pradesh and 1.33 in Madhya Pradesh. The reverse, of course, is true for regular wage/salaried employees, where women receive just 78% of men’s wages in urban areas and 63% in rural areas. This gender disparity in wages is even more pronounced in Madhya Pradesh (70% and 40% for urban and rural areas, respectively). In terms of sector, gender disparity is wider in manufacturing (with a wage ratio at 61% in urban 9 Source: https://indikosh.com 10 Chen, M.A. and Raveendran, G. (2014) Urban employment in India: Recent trends and patterns. Women in Informal Employment Globalizing and Organizing (WIEGO) Working Paper No 7 18 Current Situation and Challenges areas), compared to the trade sector with wages of women at 91% of men’s, and the services sector with wages at 76% (Women and Men in India, 2016). The following diagram represents the main employment opportunities in the tourism sector in our destinations and highlights those jobs where women employees can currently be found (♀) Figure 10: Wage Earners in Tourism Common constraints Key gender-specific challenges for women wage earners in our destinations include: ● Gender bias in assignment to positions and wage-setting ● Social stigma of hospitality-sector employment, which limits options for women ● Inability to work night and non-standard shifts due to household responsibilities, which limits opportunities for growth ● Curtailed advancement opportunities due to lack of transportation and childcare duties, and inadequacy of support services, for example, of formal childcare provision outside the house, which is simply not available to women in our destinations. 3.3 Unemployed Common constraints 19 Current Situation and Challenges In recent years, a decline in labor force participation of women has been observed across India11. Though willingness to work is found to be high among unemployed women in the target destinations, many of them are unable to overcome barriers. The most common constraints keeping women from entering the tourism-sector labor force in our destinations include: ● Unpaid household work, which occupies an excessive percentage of women’s time, particularly in cases where basic infrastructure (e.g., access to sanitation and water facilities) is inadequate. ● Safety and security issues, including the threat of violence and sexual assault ● Mothers-in-law tend to rule with an iron fist, keeping young women in the house as unpaid domestic servants ● Traditional cultural belief that it is not respectable for women to work in the hospitality sector ● Lack of childcare and lack of transportation ● Lack of education, skills, and English fluency These same issues are also reported by tourism-sector entrepreneurs looking for employees: Potential employers (including hoteliers, restaurant owners and shopkeepers) have the perception that women are unwilling to work, do not have the necessary skills, are not available during the hours they need them, and cannot focus sufficiently on work due to responsibilities of family / childcare. The figure below enumerates the key external and cultural constraints that unemployed women in our destinations face, along with enablers that can potentially support them in accessing the labor force. Figure 11: Challenges for unemployed women 11 Chen, M.A. and Raveendran, G. (2014) Urban employment in India: Recent trends and patterns. Women in Informal Employment Globalizing and Organizing (WIEGO) Working Paper No 7 20 Current Situation and Challenges Lack of gender- Educated women sensitive policies, often choose to stay incentives, schemes home Modern housing Household/ keeps women child care indoors responsibilities Family businesses Controlling offer jobs for mothers-in-law women Social networks = Lack of skills confidence Employers not sensitive to No access to flexible schedules, transport, & sanitation skills development women need Few jobs for women, Self-help Reduced demand for low wages groups traditional products empower Family Hospitality sector relationship considered inappropriate Lack of access with to finance, business Safety and security supplies, owner = market trust concerns Hotel staff Restaurant/ yoga center Enablers External Constraints Societal / Cultural Constraints India has the world’s largest youth population, with 354.4 million people aged 15 to 29, that is 27% of the population.12 Despite an increase in general education levels (for men as well as women), youth unemployment continues to pose a major challenge. Insufficient numbers of well-paying jobs are being created for this demographic, and fewer youth are willing to take low- paying jobs13. Local youth in the three destinations indicated that access to jobs is a key challenge for them. Many are compelled to take low-paying, unproductive jobs and often end up in the informal sector or on casual contracts without any social protection or job security (i.e., informal jobs in the formal sector).14 They believe their key constraints stem from: ● Lack of skills (especially vocational skills) work ethic, and English fluency ● Lack of information about job opportunities ● Lack of social networks ● Lack of work experience 12 India Labour Market Update, ILO Country Office for India, July 2016. 13 Chen, M.A. and Raveendran, G. (2014) Urban employment in India: Recent trends and patterns. Women in Informal Employment Globalizing and Organizing (WIEGO) Working Paper No 7 14 Sanghi, S. and Sensarma, K. (2014) Skill challenges of informal sector in India. Confederation of Indian Industry, focus of the month. 21 Current Situation and Challenges These key constraints were also highlighted by potential employers (including hotels, restaurants and shops), who cited lack of vocational skills as the single greatest challenge. The lack of preparedness for the workplace makes potential employers averse to employing young people, as they are anticipated to underperform. The figure below enumerates the external and cultural constraints that unemployed youth in our destinations face, along with enablers that can potentially support them in accessing the labor force. Figure 12: Challenges for unemployed youth 22 Current Situation and Challenges Access to family business / Migration natural/legal heir to family Oppressive employers property and business and laborious work schedules Expected to participate in Access to finance traditional Lack of jobs / (moneylenders / family business business government opportunities schemes) Large social network Limited / unaware among youth of access to finance Lack of business Expected to be the ‘Provider’ / skills financial responsibility for family Mobility Early marriage / Household/ Early parenthood child care responsibilities Safety & security Skills-based High competition training opportunities Families that have trust relationship with business owners External Constraints Societal / Cultural Constraints Enablers 23 Tourism Value Chain Analysis Tourism Value Chain Analysis Value chain analysis can help reveal the most promising areas for enhancing income opportunities for the poor and disadvantaged within the tourism and hospitality service sectors. Stakeholders along the value chain are highly interdependent, and the relationships between different stakeholders along the value chain are essential to achieving the goal of reaching the market in a competitive manner. 4.1 Market Segments Before diving into the supply side, we briefly explore existing and potential tourist market segments to help clarify the market potential of specific value chain upgrading opportunities. Drawing on results of other research under this World Bank project, nine market segments have been identified for the Buddhist Circuit destinations. According to this segmentation model, visitors have been categorized as high, middle, and low spending. The common denominators used for supporting this segmentation appear to include the type of accommodation where tourists stay and the price of tour packages that tourists travel on. However, our research indicates that these parameters do not necessarily reflect spending patterns at the destinations. For instance, a majority of Asian Buddhist pilgrims opt to stay at monasteries, regardless of their income level, as staying in a monastery is not only inexpensive but also provides an opportunity to live among and support the monks, which is believed to generate merit. As such, the fact that a pilgrim stays at a monastery is not necessarily predictive of their level of out-of-pocket expenditure at the destination. In addition, domestic Buddhist tour groups on so-called “low spending” tour packages have been observed to spend extravagantly at the local markets. Nevertheless, this segmentation model provides some structure for understanding the demand side of the tourism sector in our destinations. 24 Tourism Value Chain Analysis Table 5: Buddhist Circuit Market Segments15 International Buddhist International Non-Buddhist Domestic Travelers Pilgrims travelers High Spending Visitors Primary source countries Mainly independent High spending domestic for high spending pilgrims travelers from USA and visitors from various parts are Japan, South Korea, European countries of the country, both Singapore, Malaysia, travelling for leisure- spiritually-oriented and Indonesia, China, purposes. Along with leisure-oriented, visit Taiwan. Japanese and Buddhist sites, they tend Buddhist sites on Korean tourists cover 15- to visit other cultural organized package tours 20% of inbound tourists heritage destinations, and independently. on the Buddhist circuit, including Varanasi. majority older (50+), spend on average 7-8 days visiting various sites in different states, mostly on organized package tours, though a recent increase in independent travelers is observed. Latest trends indicate a marginal decline in arrivals from Japan and Korea, while Chinese visitors are increasing. Medium Spending Visitors Visitors from Thailand Travelers from European Domestic leisure and and Myanmar are countries with special experiential travelers visit considered medium interest in Buddhism, a variety of destinations. spending and spend 10- influenced by Tibetan 13 days on average in the monastic organizations in Circuit. Private tour Europe and elsewhere. operators and various monastic organizations coordinate their tours. Low Spending Visitors Travelers from Sri Lanka Backpackers and student Indian Buddhist pilgrims and Tibet generally fall groups especially from are taking low budget under the low-spending Western countries visits marked by tight category. They travel in combine their visits to travel schedules. larger groups and Buddhist destinations Local/regional tourists, normally cover various with other sites like weekend visitors and sites in India and Nepal Varanasi, etc. holiday travelers also visit on a single trip. They Buddhist sites on a low prefer low cost budget travel. Among all transportation and stay at travelers, the latter group monasteries or budget is the most likely to return accommodation. for repeat visits. However, we have observed multiple middle- class Sri Lankan tour groups staying at the most expensive hotel in Sarnath. 15 Based on Sarnath, Kushinagar and Nalanda: Market Analysis by Genesis Leisure Consulting, February, 2017 (Section - Assessment of Visitor profile). 25 Tourism Value Chain Analysis 4.2 Value Chain Mapping Tourism is a complex market system in which a variety of enterprises in different sub-sectors (hospitality, transportation, tour operations, etc.) trade products and services against (monetary) payment or other products and services to reach the end market: the tourist. The economic value of tourism arises entirely from the expenditures made by domestic and international visitors. In other words, the tourist is seen as the source of value--the value chain, in turn, includes the suppliers of all goods and services that create and deliver tourism-related products. Suppliers along the value chain are highly interdependent, some more powerful than others, and rely on each other to generate profits. Mapping the players in the sub-sectors within a destination aids in analyzing their relationships, the challenges they face, and their performance in the value chain. The tourism value chain maps for each of the three destinations in this research study look quite similar, with only minor differences in services offered and number of enterprises involved in each sub-chain. Figure 13: Tourism Value Chain and Backward Linkages 26 Tourism Value Chain Analysis Micro and small enterprises (MSEs) dominate the overall value chain, though medium and larger businesses such as hotels and tour operators (which are not displayed, as they are located outside of the destinations, primarily in Delhi and Mumbai) have a major influence due to their control over access to a large portion of the market. Transport services, vending, craft production and repair services are accessible sub-sectors for disadvantaged male entrepreneurs. Overall, there are remarkably few women entrepreneurs involved in the tourism sector in our destinations, and they are mainly self-employed individuals clustered in street vending, craft production, farming, and cosmetology services. 4.3 Entrepreneurship and Employment in the Sub-Chains Analysis of the tourism sub-chains reveals six categories of enterprises that offer the highest potential for rapid inclusive economic development. Criteria used for selecting these six include: (a) Extent of opportunity for people from the target groups who are currently involved in, or could become involved in, entrepreneurship or employment with potential for growth or advancement; (b) Extent of opportunity vis-a-vis tourist demand for introducing additional products/services, or for innovation with regard to existing products/services; and (c) extent of opportunity for extending tourists’ length of stay and/or increasing out-of-pocket expenditure. Guides Links: hotels/tour operators SANCHI SARNATH KHAJURAHO ● 140 guides ● 4-5 guides (half ● 2-3 guides in Sarnath (~50 ● 100% male unlicensed, half from active guides in Varanasi ● Avg 17,500 INR / month (fees are outside) working for hotels and tour fixed in MP at 1,380 INR/half day ● 100% male operators) but negotiable due to ● Avg 20,000 INR / ● 100% male competition) month (1,000 – 2,000 Avg 20,000 INR / month in ● 40% fall in profit in past 5 years per day) in season season (500-1000 INR from ● 100% registered Indian tourist and from There are approximately 140 guides Very few guides are active foreigners 1500-2000 INR) in Khajuraho, all male and loosely in Sanchi. Their main associated, who compete for rapidly linkage to clients is in and There are virtually no local guides diminishing business. The around the heritage site. available in Sarnath for independent government posts excessively high Many tourists travel on travelers, and this presents a substantial “fixed-price” tour rates for these organized packages that opportunity for local male and female guides, starting at Rs.1,400 for a include a guide. At the youth if guiding services are improved, two-hour session for a small group, same time, the growing monitored, and promoted. (In particular, but in reality, the guides are number of independent we envision an opportunity to rehabilitate compelled to reduce their rates in travelers offers an some of the smart, multilingual young order to compete. Furthermore, ASI emerging opportunity for touts in Sarnath who currently work on / Tourism Dept. policies have current as well as new sales commissions and train them as created significant animosity guides if guiding services qualified guides.) Approximately 50 between guides carrying different are improved, monitored, guides who are active in Varanasi also credentials, and a group of and promoted. lead tour groups in Sarnath. They mainly Khajuraho guides licensed at the work for tour operators and hotels on national level for the entire region 27 Tourism Value Chain Analysis organized tours. They are trained to has brought to the Supreme Court a explain the history of the sites at a basic suit to stop those licensed only at level and have only limited knowledge / the state level from guiding in understanding of the spiritual needs and Khajuraho. wishes of Buddhist pilgrims. Binding constraints Binding constraints Binding constraints ● Low demand / ● Low demand / seasonality ● Low demand / seasonality seasonality Unique issues Unique issues Unique issues ● Guides offer fairly low- ● Guides offer fairly low quality services ● Guides are high-quality but too quality services ● Licensing process can be lengthy, many guides with too few visitors ● Licensing process can costly, and require moving to another has created excessive be lengthy, costly, and competition, and diminishing area of India require moving to rates and incomes ● Limited knowledge / understanding of ● Licensing process can be another area of India the spiritual aspects lengthy, costly, and require ● No guides available on site at Sarnath moving to another area of India for FITs ● Multiple licensing processes (national / regional / site-specific) leads to confusion / animosity among guides Rickshaws Links: hotels/shops Sarnath Sanchi 100% 100% 100% 100% 100% 78% 100% 100% 67% 50% 56% 15% 11% -3% Formality (% -40% Gender (% male) Age (% youth) Owned registered) Change in profit in the past 5 years Sarnath Sanchi 13500 12000 5800 5500 290 20 100 Number of enterprises/self- Bicycle rickshaw Auto rickshaw employed Monthly turnover (INR) Note: only auto rickshaw drivers were interviewed in Sanchi and Khajuraho. Source: Emerging360 Field Survey data, July-November 2017. 28 Tourism Value Chain Analysis SANCHI SARNATH KHAJURAHO There is a small group of auto All drivers of bicycle and auto Tourist transportation in Khajuraho rickshaw drivers operating in rickshaws in Sarnath highlighted consists almost exclusively of Sanchi of which 50% is youth. that their work is unreliable, and autorickshaws and taxis. In many Some come from Sanchi town, both types of rickshaw drivers cases, taxi drivers are part-time, while the majority (60%) is from indicated that they regularly have informal employees of the car the surrounding villages. Auto days when they earn nothing owners, and with rapidly dwindling rickshaw driving is perceived as a (especially in the low season). To numbers of tourists, some drivers good opportunity in Sanchi; in compensate, some also engage report now earning as little as most cases people have sold their in labor work. 1,500 INR per month in the high farmland to purchase their season. Autorickshaws carry more vehicle. They drive passengers, The majority of bicycle rickshaws locals than tourists these days and including tourists, between work on the route from the Central often resort to supplementing their Raisen, Udaygiri, Vidisha and Institute of Higher Tibetan Studies incomes with additional work. other sites in the surrounding to the monasteries and the A particularly interesting case is area. Hotels occasionally refer heritage site, where they get work the dance troupe that performs customers to them. Several mostly from foreign clients. They nightly at the MP Tourism cultural drivers are under the impression appear to collaborate and take center. The talented troupe is that they would strongly benefit customers on a rotating basis. composed of approximately 12 from guide training and are more The bicycle rickshaw drivers autorickshaw drivers and half a capable of providing information expressed a desire to drive an dozen young women (otherwise to their passengers. auto, observing that passengers unemployed) all trained by a prefer auto-rickshaws and the master local dance instructor. higher fares would provide better Members of the troupe earn an income. However, they do not Rs.3,000/month, which have the capital necessary to supplements their regular daytime purchase an auto outright or the income, while promoting collateral necessary to finance a Bundelkhandi and regional dance purchase. Currently, 50% of traditions. bicycle rickshaw drivers spend roughly 25% of their monthly earnings to rent their vehicles and more still to maintain them. Binding constraints Binding constraints Binding constraints ● Seasonality ● Lack of demand / ● Lack of demand / seasonality ● Perceived lack of potential seasonality (Auto rickshaw) to advance or increase ● Perceived lack of potential income to advance or increase income ● No access to finance to purchase own vehicle or to upgrade vehicle is major problem 29 Tourism Value Chain Analysis Unique issues Unique issues Unique issues ● No proper stand / ● No proper stand / ● Poor alternative livelihood maintenance facilities maintenance facilities options ● Poor alternative livelihood ● Poor alternative livelihood ● Increasing competition during off season options during off season ● Increasing competition ● Age impacts ability to carry passengers (bicycle rickshaw) “Competition is the biggest challenge we face. Bicycle rickshaw drivers face competition from auto-drivers, while auto-drivers face competition from e-rickshaws and Ola cabs. People have too many choices.” – Auto rickshaw driver in Sarnath “I pay Rs. 1,500/month to rent this bicycle rickshaw—this is 25% of what I earn each month in high season.” – Bicycle rickshaw driver in Sarnath Homestays (potential) Links: rickshaws/tour operators Sarnath Khajuraho 100% 100% 100% 69% 67% 38% 20% 25% Change in profit in Gender of workers Age of workers Formality the past 5 years (%) (% Male) (% youth) (% registered) 30 Tourism Value Chain Analysis Sarnath Khajuraho 49 15 17.5 7 3 6.1 4.3 5.8 1 n/a Number of Monthly turnover (in Average number of Male Female enterprises/self- ‘000 INR) employees Average monthly wage of employees (‘000 employed INR) Note: No data on homestays for Sanchi. Source: Emerging360 Field Survey data, July-November 2017. SANCHI SARNATH KHAJURAHO There are no homestays in Sanchi There are 13-15 functioning In Khajuraho approximately 7 homestays in Sarnath. Under the “homestays” have been started in business concept “Paying Guest recent years and are operating House,” local people are able to with varying degrees of success as offer up to 5 rooms in their home a low-cost accommodation option. for overnight guests. This type of However, there are virtually no real business is making a difference for homestays in Khajuraho--instead some local people of Sarnath. local entrepreneurs have figured However, the execution of the out ways to skirt the rules of the paying guesthouse model is multiple competing government inconsistent. While good practice homestay schemes offered via MP examples - in line with the Tourism, the Dept. of Labour, and homestay model - exist, most the national B&B scheme, and with paying guest houses do not offer little monitoring, have in reality tourists an immersive cultural created tax-free budget hotels experience. Rather, the properties without any immersive, quality are operated as low-end hotels, experience for tourists. The few and in fact, they often combine a homestays that do offer an business license with their authentic local experience have homestay license to include 20+ been impressively successful with rooms in their facilities, leveraging consistently high occupancy rates the 5 homestay rooms simply as a and 97%+ ratings on Booking.com tax break. and TripAdvisor. Binding constraints Binding constraints Binding constraints N/A ● Seasonality, operating below ● Shrinking demand due to fall in capacity (30-60% during peak tourist arrivals in the destination season, 0-50% during low ● Limited market access, limited season;) understanding of market, poor ● Limited market access, limited marketing skills understanding of market, poor ● Poor quality of supply due to marketing skills limited investment for expansion ● Poor quality of supply due to or upgrade limited investment for expansion or upgrade 31 Tourism Value Chain Analysis Unique issues Unique issues Unique issues ● Households are not exposed to ● Various inconsistent tracks for ● Various inconsistent tracks for the homestay concept and licensing--confusion in the licensing--confusion in the opportunity market market ● Lack of high-quality immersive ● Lack of high-quality immersive cultural experience for tourists. cultural experience for tourists. “Although we are low-caste, the community better respects my family now that we host foreigners at our house.” – Homestay owner in Khajuraho Restaurants Links: vegetable vendors/groceries Sarnath Sanchi Khajuraho 96% 100% 100% 100% 80% 64% 60% 67% 50% -10% Gender (% male) Age (% youth) Formality (shops, -30% -25% % registered) Change in profit over the past 5 years Sarnath Sanchi Khajuraho 104 100 30 36 40 14 6 4 3 8.9 5.7 5.0 5 5.5 n/a Number of Monthly turnover (in Average number of Male Female* enterprises/self- ‘000 INR) employees Average monthly wage of employees (‘000 employed INR) *may be inflated because women workers are usually employed only by bigger establishments. 32 Tourism Value Chain Analysis Source: Emerging360 Field Survey data, July-November 2017. SANCHI SARNATH KHAJURAHO Among local enterprises in Sanchi, The restaurant sector is dominated Restaurants in Khajuraho are restaurants may be best by low-quality establishments that suffering from a significant decline connected to tourism, as the do not offer much variety in menu in FIT visitor arrivals. While a majority of visitors make use of selection and atmosphere. majority of restaurants are local food and beverage services. Hygiene standards are low. registered--employing on average However, the seasonality of Establishments in the vicinity of a few low-wage, part-time staff, a tourism significantly affects the heritage site are unsure of the number of restaurants are restaurant businesses, as there legality of their spaces, which managed and run exclusively by are few other customers. inhibits their willingness to invest. sole proprietors without staff and With limited exposure to hospitality However, a few more innovative report that they are barely services, it is challenging for restaurants and cafes can be breaking even and could not afford restaurants to find skilled labor found, especially towards the registration fees or tax obligations. among the local community. Some outskirts of Sarnath. This year, many restaurants are restaurants hire a few skilled or Skilled labor is mentioned as a key hosting just a single customer per semi-skilled staff from Vidisha or challenge for local restaurant day even in the high season, and Bhopal in addition to the largely entrepreneurs, and competition for we expect significant restaurant unskilled local staff. experienced staff among closures by the end of this season. restaurants in Varanasi is high. The most successful restaurants A growing local middle class is are Swiss, Dutch, and Italian starting to patronize the very few owned with better quality food, higher-end restaurants and cafes better service, higher traffic, higher in town, broadening the market for prices, and better margins than the these establishments. typical Khajuraho restaurant. Ironically, while it’s possible to order Italian pizza and Chinese dishes in numerous restaurants across town, it’s not possible to find a single restaurant that prepares authentic Bundelkhandi cuisine or desserts, and this represents a significant opportunity for local entrepreneurs. Binding constraints Binding constraints Binding constraints ● Non-availability of skilled ● Non-availability of skilled ● Non-availability of skilled labor as and when needed labor as and when needed labor as and when needed ● Seasonal demand ● Shrinking demand / difficulty ● Shrinking demand / difficulty making sales making sales Unique issues ● Reduced purchasing power of the Rupee with GST/demonetization Street Vendors and Shopkeepers Links: Craft producers, souvenir sellers (Sarnath); 33 Tourism Value Chain Analysis Wholesalers, delivery/transport, laborers (Sanchi) 83% * 100% 100% 100% 100% 100% 60% 50% 33% Gender (% male) Age (% youth) Formality (shops, % registered) -35% -30% -73% Sarnath Sanchi Khajuraho Change in profit over the past 5 years (souvenir shops) 0 312* Sarnath Sanchi Khajuraho 83 80 112.5 125 15* 5 8 37.5 0 0 2 1 45 45 29 Number of Street vendors Shops Street vendors Shops Male Female enterprises Monthly turnover (in 1000 INR) Average number of staff Average number monthly wage of /self- workers in shops (’00 INR) employed Note: street vendors include sit-in sellers and street stalls. Monthly turnover for Sarnath refers to income. No data for Sarnath on number of staff. Sources: Emerging360 Field Survey data, July-November 2017; (*) Total Synergy Consulting Field Survey data. In all three destinations, shopkeepers tend to hire male staff. When asked why they do not hire women, a shopkeeper clarifies: “they are hard to manage” as a result of their household duties. SANCHI SARNATH KHAJURAHO Street vendors can be found in the Street vending in Sarnath is The street vendors of Khajuraho main market and along the tolerated--however, formal stand or sit on the roads along the highway that runs through Sanchi. space is lacking. The Street market near the heritage site. Street Most of the street vendors have Vendors’ Association plays a vendors comprise souvenir sellers, semi-fixed establishments, though vibrant role in linking the food and tea sellers, and sit-in- they are unsure of their entitlement vendors horizontally. Being sellers. The roughly 10 street to their spaces. integrated with the larger Street vendors selling souvenirs neither Their main clientele consists of Vendors’ Association of support nor collaborate with each local people from Sanchi town and Varanasi, a body representing other. They sell products made by surrounding villages, which makes over 40,000 vendors, offers a artisans from around Madhya for a narrow market. The vendors strong layer of protection. Pradesh, Uttar Pradesh, and currently have limited connections Chhattisgarh state, as well as to the stream of tourists and Approximately 20-25 women Rajasthan, Kashmir, and Nepal. visitors that pass through town and are active as street vendors. Decline in international tourist have not yet developed an They are mainly involved in footfalls has significantly impacted understanding of the opportunity lower investment/turnover the street vending business. Street these potential customers offer. activities, selling raw and vendors also believe that the Among the vendors of the main packaged food products, though aggressive local young touts market a Street Vendors’ a few sell souvenirs or offer negatively influence tourists’ Association has been formed to services like mehndi painting. willingness to make souvenir 34 Tourism Value Chain Analysis communicate with local authorities According to the Street Sellers purchases. Touts bring tourists to regarding demands for better Association of Varanasi, shops and expect up to 40% market facilities (stalls, streets, approximately 20% of women commissions for any sales sewage, waste management, sellers own their own stalls subsequently made. sanitation facilities, etc.). Vendors (80% are renting) in comparison In addition, tour operators reportedly have expressed a strong desire to to the 70% of men who own patronize only four of the many learn about tourists as a potential their stalls, making the women shops in town, leaving the rest market and are willing to broaden more vulnerable to income solely reliant on dwindling numbers or adapt their wares and services fluctuations. In general, women of FITs. Several shopkeepers whom to attract them. sellers are forced to come out we surveyed estimated that 50% of and work due to extreme the current shops will permanently poverty and/or having a close by the end of this season. husband who does not work or The stalls of food and tea vendors earn sufficiently. are situated further away from the The head of the Street Vendor’s heritage site. Their clientele are Association in Sarnath noted: “If mostly domestic tourists and locals. the man of the family earns Sit-in-sellers primarily sell glass well, he would not want his wife bangles and other cosmetic to work. It’s a prestige issue, as accessories, such as bindi, lipsticks, it is generally perceived that a rubber bands, hairpins, etc. that working wife means the locals people purchase, especially husband is not able to earn during the wedding season. They enough.” make a reasonably good income but Street vendors in Sarnath are their business runs on credit. relatively well connected to tourism and many of them have developed an initial understanding of how to attract tourists as customers. However, vendors lack diversity in souvenir products, the majority of items are low quality, and they are unwilling to take risks with more promising unique products. Binding constraints Binding constraints Binding constraints ● Limited understanding of ● Limited understanding of ● Shrinking demand / difficulty market / not willing to take market / not willing to take making sales risk on new products risk on new products ● Limited understanding of market / not willing to take risk on new products Unique issues Unique issues Unique issues ● No formal location ● Street Vendors ● Don’t sell local or even Association plays major regional goods ● Limited access to market role in linking street ● No good, formal centralized vendors location ● No good, formal ● Touts require high centralized location commissions from ● Touts require shopkeepers commissions from shopkeepers 35 Tourism Value Chain Analysis “It would be better if we could set fixed prices. But we all stock the same souvenirs, so the sellers with inferior locations need to be able to sell at lower prices.” --Street vendor in Sarnath Craft Producers Sarnath Sanchi Khajuraho 70% 50% 50% 40% 30% 40% 30% Gender (% male) Age (% youth) -42% -75% Change in profit in the past 5 years 281 Sarnath Sanchi Khajuraho 120 105 50* 42.5 75 30 26 Number of Monthly turnover Male Female enterprises/self- (in ’00 INR) employed (*)-Monthly turnover for Sanchi refers to monthly income. Sources: Emerging360 Field Survey data, July-November 2017. Female participation in Sarnath appears high due to large number of informally, part-time employed, very low-wage bead workers, and in Khajuraho due to low number of craft producers and innovativeness of younger female craft producers there. SANCHI SARNATH KHAJURAHO The number of people in craft Numerous people are involved in a Within the radius of 20-25 kms production in and around Sanchi large variety of crafts in and around from Khajuraho, small groups of is falling, mainly due to shrinking Sarnath. Some of the more traditional craft producers, demand for traditional products traditional craft producers (potters, including potters, painters, and as cheaper machine-made weavers) are challenged by stone sculptors can be found. products are taking over their shrinking demand for their items, They periodically display their market. due to competition from machine- products in fairs conducted for A carpet production company made products. They are unable to tourists at the Shilpgram site. used to hire 120 weavers develop innovative new products There is a talented and well- 36 Tourism Value Chain Analysis (including 30 women) across the due to their lack of market known miniature-painter who villages around Sanchi, many knowledge and limitations in skills. owns a shop in the market where home-based workers. However, More than 100 informal women bead he sells higher-end paintings. He due to reduced demand and workers in Sarnath village string has trained his brothers and inability to run a profit, the beads for a single client/distributor at sons, and they are making a company was reduced to a small the rate of Rs. 4 for 12 strings, good living selling art to tourists, unit with 5 staff. earning a meager Rs.100-200 per despite the downturn in tourism At the same time, through the month for 2 hours of work per day. traffic. While he previously made stimulation of Self Help Groups, Younger women from this group most sales to international a growing number of women is expressed enthusiasm at the idea of tourists, due to the tourism becoming involved in production being trained to create more downturn and the aggressiveness of marketable crafts, including sophisticated beaded products for of local touts, he now sells almost tailoring and incense making. more money, and bypassing the exclusively to domestic tourists. Currently, they mostly produce intermediaries, as long as they can A loosely affiliated group of on-demand for a single still work part-time and from home. talented women, seamstresses, customer, though they are Potters from the Prajapati etc., has recently begun interested in exploring new community in Sultanpur, the largest designing and producing markets and direct sales potter community in the area, have prototypes of unique, handmade possibilities. traditionally mass-produced crafts utilizing traditional souvenirs from molds to be sold by techniques, including doormats Sarnath street sellers, in addition to made of recycled blue jeans, throwing pots. They have been local-style kurtas, and experimenting with more unique, fashionable handbags. While high quality products including they have no real market yet, we glazed, black pottery, but street see a great opportunity for sellers in Sarnath are not willing to formalizing their cooperation take a risk on new products. The horizontally and facilitating direct pottery families employ connections to international and approximately 15 women from domestic tourist markets. neighboring farms in part-time casting and finishing work--the women earn 40% of the value of the products they create, on average Rs. 3,000-4,000/month. However, the pottery families often can’t collect payment from the street vendors for up to 12 months, creating massive cash flow challenges. Having recently participated in government- organized MSME trainings in Varanasi on marketing, the enterprising potters have now established clients in Kathmandu who pay 8 times more for the same mass-produced clay Buddha heads. They are also developing clientele in Lumbini, Kushinagar, and Bodh Gaya, bypassing the low- and slow- paying Sarnath market. Binding constraints Binding constraints Binding constraints ● Seasonality; falling demand for ● Lack of demand/Seasonality ● Lack of/shrinking demand souvenirs 37 Tourism Value Chain Analysis ● Limited understanding of ● Limited understanding of their ● Limited understanding of market / not willing to take risk market market / not willing to take risk on new products on new products Unique issues Unique issues Unique issues ● GST demonetization ● Reduced demand for traditional ● Reduced demand for ● No permanent location products traditional products ● Street Vendors Association ● Difficulty in collecting payment ● Difficulty in collecting payment plays major role in linking ● No direct access to tourism ● Not enough access to finance street vendors market ● No direct access to tourism ● GST demonetization market ● Touts do not let tourists come in the shops ● Perceived lack of opportunity for expansion “We sell our pottery/sculptures to street sellers in Sarnath, who give us 50% upfront but often don't pay the other 50% for up to 12 months, which is very challenging for cash flow.” --Prajapati potters in Sarnath 4.4 Tourism Value Chain Analysis: Sanchi The tourism value chain in Sanchi is characterized by: ● Inadequate space for interactions between tourists and locals ● Limited understanding of (potential) market segments ● Slow investments in hospitality services ● Low quality, low priced products and services ● Untapped potential for excursions ● Limited collaboration between entrepreneurs at product level ● Limited vertical linkages The domestic market dominates tourism in Sanchi (98% of total visitors). Domestic tourists are mainly independent visitors from nearby places in Madhya Pradesh and surrounding states. Sri Lankan devotees lead international visitation with growing numbers of visitors from other Asian countries including Thailand, Singapore, China, and Vietnam, mostly travelling on organized packages in groups of 30 - 200. In the high season, some of these groups stay overnight in Sanchi. A small number of tourists from Europe and the Americas visit Sanchi as well, mainly on organized package tours. Some of them stay overnight, though the majority lodge in Bhopal. The current range of local services that form the tourism value chain in Sanchi is limited, and visitors have a short length of stay. Tourism is seasonal with the primary stream of visitors arriving from October – March. Little attention and investment have gone into connecting the 38 Tourism Value Chain Analysis site with opportunities for tourists to interact with local entrepreneurs. And with limited quality lodging options, it will take time to develop Sanchi into a full-fledged overnight destination and extend the length of stay to multiple days. In the short term, it is therefore recommended to focus on activities that will attract visitors to stay from a few extra hours up until one night. Quick wins can be achieved by linking existing entrepreneurs who are largely outside of the tourism value chain with the flow of tourists. As an emerging destination where local people have limited experience interacting with tourists, opportunities should be created to build these relationships. A market can provide a unique opportunity for authentic social interaction where local people can interface with tourists. Sanchi has a unique marketplace that is set up like a traditional market and conjures a traditional village feel. Most markets in India are located along busy roads with bus stops where vendors find the highest density of potential customers. This used to be the case in Sanchi until 1992 when the municipality designated an area inside the town and shifted shopkeepers there. This area now offers a unique location where villagers could interact with tourists if the market could be connected with tourist flows. A former municipal building located on the far end of the market was converted into small shops and rented out to shopkeepers on 99-year lease contracts. The rest of the market consists of makeshift stalls of a more informal status. Shopkeepers are of the opinion that with market beautification, regulation and oversight, and more and more tourist friendly products, the Sanchi market could attract tourists in a holistic matter. Shopkeepers are interested in participating in the market development as they believe this will attract more customers (including tourists) and rapidly improve their economic condition. Since the majority of tourists in Sanchi are domestic visitors, interaction will be easy for vendors to establish, as language and cultural differences will not pose major obstacles. In addition, shopkeepers understand that opportunities for interaction with international tourists would help them to better understand what products and services they could offer them most successfully. Shopkeepers are aware of the need to diversify their product lines, but they currently do not have exposure to these potential markets. The following table represents the goods that a typical tourism-facing souvenir shop in Sanchi stocks and demonstrates the vast potential opportunity for instead selling high-quality, unique, locally made goods. Table 6: Sanchi Craft Shop/Street Vendor Product Analysis Average Purchase Average Selling Typical Product Sourced From Price from Producer Price from Vendor (INR) (INR) Leather purses Kashmir 400-600 800-100 Leather Handbags Kashmir 700-1100 1300-1800 Woolen/pashmina clothing Kashmir 800-2800 1500-4000 39 Tourism Value Chain Analysis Buddha sculptures Kashmir/Chinese/UP 50-900 100-1500 Stone Jewelry Kashmir 100-250 180-400 White Cement Sanchi (self-manufactured) 5-50 20-400 figurines/sculptures Tourists mainly visit Sanchi for its cultural heritage and for leisure purposes, though a large number of excursion opportunities remain untapped, and several other cultural heritage sites are accessible by road. Collaboration among entrepreneurs in Sanchi’s tourism value chain is limited. The most structured form of collaboration can be found among the women of the 600 local Self Help Groups. Hospitality businesses do not benefit from any notable linkages to membership organizations at the state or national level. Vendors at the market are casually organized, which can help streamline their communication with the municipality to request upgrading of market facilities. “It would be a little difficult, but we will find a way to convince our husbands. You teach us anything, we will learn. Give us some kind of work that we can collectively do.” --Local women 4.5 Tourism Value Chain Analysis: Sarnath The tourism value chain in Sarnath is characterized by the following: ● Tourism is a major part of the economy and benefits accrue to local people ● Inadequate diversity of hospitality establishments ● Untapped potential for excursions and activities ● Short lengths of stay, averaging just a few hours ● Increasing degradation of surrounding area The majority of visitors to Sarnath are domestic tourists (approximately 80% of total visitors). They are mainly partial day visitors, who spend a few hours walking around the Buddhist heritage sites during their trip to Varanasi. A small percentage of the domestic market is returning visitors. International visitation comprises a diverse group, which includes many Buddhists from around the world. Buddhist pilgrims travel on group packages from Sri Lanka, Tibet and Southeast Asian countries, including Thailand, Myanmar, Vietnam, and Cambodia. Many stay in monasteries, accompanied by Buddhist monks from their origin countries, and join ceremonies in temples established by their respective countries. For most, the driving reason for 40 Tourism Value Chain Analysis staying in the monasteries is the opportunity to fully experience a spiritual pilgrimage, and not simply the low price point. Higher end tourists from Japan, Korea, Singapore and Malaysia travel in small, organized packages or independently. Many opt for good-quality hotels and therefore tend to stay in Varanasi, though increasingly some stay in Sarnath as well. A number of international visitors from beyond the Asian continent also visit Sarnath for secular or Buddhist religious purposes on organized package tours as well as independently, sometime staying a night at Sarnath. The tourism value chain of Sarnath is more advanced than in Sanchi, and there are more opportunities for interaction between locals and tourists. In fact, local participation in the tourism value chain is relatively high, though mostly through self-employed and informal wage work. Hence, the benefits remain limited and the flow of income unstable. A number of countries have established monasteries in Sarnath and offer lodging to pilgrims of their respective nationalities. Some monasteries indicate that they welcome visitors from other countries as well. Beyond these offerings, accommodation is limited and of low quality, so many overnight visitors stay at Varanasi. One recently opened hotel, SGT Plaza, is paving the way for better quality lodging options. As noted by other background research16, diversification of accommodation options will significantly change the dynamics of the destination. One type of accommodation with the potential to promote economic inclusion for the local people of Sarnath is the homestay. Under the business concept “Paying Guest House” local people are able to offer up to 5 rooms in their home for overnight guests, though without capacity-building support, regulation, or monitoring, very few such establishments resemble true, immersive homestays--instead, most are used for tax breaks, providing low-cost, impersonal, budget-hotel-style accommodation. Women’s engagement in the tourism value chain in Sarnath is restricted primarily to street vending and supporting work (preparatory and finishing) for handicrafts. Youth engagement in traditional occupations appears to be diminishing, and many youth end up in self-employment and labor jobs, or migrate elsewhere for better, more societally respectable, job opportunities. Roughly 80% of sarees sold in Sarnath shops and branded as hand-made Varanasi sarees are in fact low-quality power-loom products manufactured in Mau, U.P., with prices starting at an incredible Rs. 10,000 to mask the fact that they are fakes. Most Indian buyers are not able to tell the difference. A smaller number is manufactured in China from synthetic materials and sold at cut-rate prices. Real Varanasi silk sarees are few and far between starting at Rs. 15,000. The more than two hundred street vendors hawking souvenirs and handicrafts all generally offer the same basic range of products. They purchase inventory from craftspeople with 50% advance payment, and then pay the remainder in the future once they’ve sold their wares. As seen from the table below, most such goods are regionally-produced, and margins average 25- 50%. Table 7: Sarnath Street Vendor Product Analysis 16 Genesis Leisure Consulting, 2017, Design and support for the implementation of a plan to mobilize private investments in support of the development of sustainable and inclusive tourism along the Buddhist Circuit. Sarnath: mapping of the tourism value chain. 41 Tourism Value Chain Analysis Average Purchase Average Selling Price Typical Product Sourced From Price from Producer from Vendor (INR) (INR) Machine-made Varanasi- Varanasi suppliers 80 100 style handbags Wooden sculptures Producers in Latera and 120 180-200 Khojwa, UP Metal sculptures Moradabad, UP 700-800/kilo for low- 1000-1200 quality Large Himalayan singing Nepal 1700 2500 bowls Woven wall hangings Varanasi 280 350-400 Golden plaster of paris Sarnath 40 50-60 sculptures Wooden Buddha Bodh Gaya 420 mid-size (70/inch) 550-600 sculptures Woven ceiling hanging Varanasi village (made 120 200 ornaments by women) Carved stone elephants Ramnagar, UP 20-25 (mid-size) 40-50 Tibetan flags Sarnath (instructions 70 100-120 originally given to local producers by Tibetan monk) 4.6 Tourism Value Chain Analysis: Khajuraho The tourism value chain in Khajuraho is characterized by: ● Precipitously declining numbers of international tour groups and international FITs due to recently introduced connectivity challenges and bloated airfare pricing ● Gradually rising numbers of domestic tourists, especially families from the surrounding region seeking low-cost weddings in five-star hotels, as well as day-trippers ● A local community overwhelmingly dependent upon the tourism sector--the tourism crash is leading to economic devastation for local families ● Excessive supply and levels of competition among guides, shops, restaurants, budget hotels, etc. ● Potential for greater integration with excursions in surrounding areas, including Lost Gardens, Panna National Park, Panna Diamond Mine, Raneh Falls, Orchha, etc. Most visitors to Khajuraho are domestic tourists (approximately 74% of total visitors). While the number of Indian tourists continues to rise, most come from the surrounding areas, don’t stay overnight, spend little in the market, and bring their own provisions with them. In addition, as prices at the town’s five-star hotels continue to plummet, Khajuraho is witnessing an influx of families from the surrounding region seeking a picturesque location for inexpensive weddings. 42 Tourism Value Chain Analysis International tour groups stay almost exclusively in one of the six five-star hotels and eat all meals there as well, which leaves the town center, where all restaurants, shops, budget hotels, guides, and drivers are situated, almost entirely reliant on FITs, whose volume is unable to match the current supply even in the high season. Many of the town’s 140 guides are skilled, multi-lingual professionals, but competition for scarce tourists forces them to negotiate lower than the set prices and bid aggressively for business. Shops largely stock tourist wares from Kashmir, Rajasthan, and elsewhere, and there are few opportunities to purchase unique, locally-made crafts. The hotel association that previously existed has become moribund. And this year the Taj Chandela closed after 30 years. The former GM of the Taj estimates that traffic from international tour groups has dropped 80% in the last 6 years. Most hotels source food and other agricultural-based goods from Bhopal, Delhi, and the south, and local farmers have little connection to the tourism value chain. FITs report that they enjoy the small-town, quiet feel, and friendly ambience of Khajuraho, in addition to the magnificence of the heritage site. They also indicate that they would spend more time and money in Khajuraho if there were more opportunities to interact with locals, take part in authentic local experiences and activities, and purchase unique, locally made accessories. The Khajuraho Shilpgram in Khajuraho, one of only seven in the nation, is an impressive multi- acre complex with a number of structures intended to be used for artisan accommodation, artisan displays, and crafts festivals, etc. but it remains sadly underutilized with weeds growing waist-high for much of the year. The site presents a promising opportunity for introducing an authentic artisan village year-round, and with a sustainable business plan and funding model could help contribute to extended tourist stays in Khajuraho. PACE (Pratham Arora Centre for Education) Hospitality Training Center in Khajuraho does an impressive job training approximately 40 youth every two months in basic hospitality skills through its residential program. Many of the students come from Khajuraho and nearby villages, with approximately 1-2 young women in each cohort. However, wages at hotels in Khajuraho are for the most part significantly lower than in many metropolitan areas of India, and most PACE graduates opt to be placed elsewhere upon graduation. And many of the young women who complete the residential program return to their homes only to be told by their families that they may not leave Khajuraho, and the five-star hotels in Khajuraho claim that they generally can’t hire female PACE graduates because they still require more support and English-language training, so the female graduates often resign themselves to living locally and remaining unemployed. If they were provided with additional English-language training and job support after graduating from PACE, these young female graduates could become a great source of skilled employees for local hotels, which opine the difficulty of sourcing local candidates. 43 Gap analysis Gap Analysis 5.1 Gaps in Support Provision Various levels of government and other institutions in India offer a wide range of schemes and programs to promote the growth and development of entrepreneurship and MSMEs. Several of these schemes explicitly target women, youth, and the poor (WYP) as beneficiaries. Additional programs and schemes address the economic and social concerns of weavers, artisans, small business groups, potters, small scale vendors, etc. through financing, capacity building, marketing & promotion, enterprise development, cluster development, and more. The list of schemes and programs consulted for this study in Appendix A is indicative but not exhaustive, signaling the existence of significant numbers of potential supportive opportunities in India. Ultimately, the primary challenges in our destinations are not attributable to lack of schemes or funding--in fact, we estimate the total value of annual government schemes relevant to our target groups and destinations at approximately 33,000 crores INR. However, the sheer number of schemes and the lack of proactive coordination among them contribute to severe underutilization. Some schemes have been more successful than others in reaching their target groups. For example, the National Rural Livelihood Mission has reached 6600 women in Sanchi through Self Help Group schemes (there are 600 SHGs). They have also reached 1900 beneficiaries of kitchen gardens, 254 beneficiaries in horticulture, and others as well. Since 2015 they have reached approximately 90 youth under the Economic Welfare scheme. However, based on the survey of unincorporated enterprises nationwide, only 2.2% of enterprises in tourism-related and ancillary activities received any assistance from the government during last three years and barely 6% of respondents in our destinations have accessed any schemes at all. 44 Gap analysis Table 8: Gap Analysis of Schemes and Programs Barely 6% of respondents in our field work has ever accessed a government scheme. Local enterprises report the following reasons for scheme underutilization: Awareness / outreach Unaware of the existence of schemes relevant to them challenges Unequal distribution (not reaching out to women/youth explicitly) Institutional Lack of coordination between institutions and absence of convergence challenges among schemes, resulting in duplication and confusion among beneficiaries Limited loans for service sector, comprising 78% of women-owned enterprises in India In MP, 3 different tracks for homestay licensing with different guidelines and standards Technological and Respondents say applications are not sufficiently accessible application challenges Schemes require cumbersome procedures, discouraging beneficiaries from accessing them Requirements are difficult to meet (collateral, formal enterprise, guarantee of male family member, high transaction costs, loan only extended to group, etc.) Implementation Despite Government subsidies and guarantees, banks insist on additional challenges requirements for releasing loans, such as collateral or group-based lending Lack of women loan officers and lack of male loan officers sensitized to gender issues in lending discourage women from applying Schemes are not well-designed & targeted: e.g., most of our target beneficiaries need skills training whereas schemes are often limited to financing and subsidies It’s important to note that most government schemes provide support in the form of financial assistance, which does not directly address the major operational problems faced by enterprises in our target locations. This points to the need to improve the types, design, targeting, and most importantly, coordination and outreach of assistance schemes if they are to be leveraged to benefit the local communities in substantive ways. For example, based on the survey data, women entrepreneurs in manufacturing of wearing apparel cite lack of availability of skilled labor as a major constraint in their operations. Targeted assistance could help address this constraint. 45 Gap analysis Figure 14: Nature of Problem Faced by Tourism-Related Enterprise in Last Year and Share of Government Assistance Received in Past 3 years (%), 2015/16 100.00 1.60 - - - - 2.26 5.14 - 9.41 - 10.29 9.31 11.21 15.40 11.88 0.09 90.00 - 0.06 8.69 0.31 0.55 4.55 - 0.84 4.98 3.65 80.00 27.08 70.00 51.56 60.00 50.00 100.00 96.14 89.71 82.72 85.49 40.00 79.15 81.11 30.00 62.91 20.00 39.04 10.00 - Erratic power Shrinkage/fall of Non-recovery of Non-availability of skilled Others supply/power cuts demand financial dues labor as and when needed financial subsidy machinery skills development marketing raw materials others 5.2 Models to Build On Non-recovery of Emerging360 has researched and identified a number of success stories and relevant cases financial dues that have tackled similar challenges and have contributed to substantive progress for similar communities. 46 Gap analysis Increase demand by designing unique, local products, skilling artisans, and creating new market hubs Lack of demand. Lack of skills. Lack of markets. Lack of unique, Lack of unique, local products local crafts Mijwan Welfare Society, U.P., India Artisans D’Angkor, Cambodia ● Trained 400 girls / women in U.P. ● Social business creating steady job in embroidery. opportunities & vocational training for 800 young people / ● 75% of trainees are employed, families in rural areas, while earning Rs. 6000+ / month. reviving traditional craftsmanship. ● ~13% self-employed in home- ● Tours to the artisan villages and based businesses. retail shops have become key ● 48% contribute toward higher tourism activity. education. ● Free health care, fair wages, ● 28% contribute to children’s maternity leave, childcare education. ● 98.3% of artisans’ children enrolled in school. Increase demand by providing more robust opportunities to learn about the destination Abraham Path Initiative, West Bank ● World Bank Group’s State and Peacebuilding Fund invested $2.3 million ● Trained 25 wilderness tour guides and certified another 15 ● Thriving business opportunities for 53 communities 47 along the path’s mostly rural corridor ● Altogether, just under 300 members of the community Gap analysis Increase demand by reducing road chaos and making it easier and more pleasant for FITs to get around, and providing A2F for rickshaw drivers Dastkari Haat Samiti Rickshaw Rising & INTACH Challenge, Pune, Bangalore, and Chennai ● Developed prototypes for bicycle rickshaws in Varanasi, plans for ● EMBARQ India and Shell prototyping other types Foundation mentored 3 early- stage businesses to deliver ● Local artisans hand-painted the improvements in auto-rickshaw new rickshaws ecosystem ● Free health care, fair wages, ● Enable drivers to set their own maternity leave, childcare schedules ● Achieved goal of making them ● 98.3% of artisans’ children comfortable and attractive, enrolled in school. spreading a message of hygiene ● Smartphone apps transform ● Rickshaw drivers display wooden expectations re: hailing, paying, toys on their vehicle for sale service levels, and quality ratings ● Replace more manual processes with technology solutions to improve margins 48 Gap analysis Increase demand by creating new, quality, hygienic F&B establishments and models for women-owned businesses Lack of quality F&B. Lack of quality F&B. Lack of models of Lack of models of women-run business women-run business Lawaki bakery in Tailevu, Fiji The Village Cafes, Nepal ● Community-owned & ● 3 cafes owned & operated by 6 female bakers operated by Sabah ● Government investment of Nepal, a social US$38,122 -- community enterprise of 2586 invested US$9,646 home-based women ● Bakery selling US$482 /day workers. within one year, supplying ● Cafes employ 30 local schools, businesses, women ● Created value chain to etc. maximize women’s income at each stage. ● Also run 6 retail outlets for handicrafts, clothes, accessories. 49 Gap analysis Increase demand by creating new quality accommodation and local experiences; plus training, financing, and homestay business opportunities for women and families Lack of quality Lack of experiential accommodation. Lack of quality accommodation local activities Lack of authentic, experiences “Friends of Orchha” and SGT Plaza, Sarnath Stay another day, Cambodia Kerala Homestays ● Opened essentially the only high-quality hotel in ● Promote alternative ● NGO oversees 6 true family sustainable excursions & Sarnath. homestays. activities (besides temples) ● Marketing to Indian & S. / ● Centralized booking, S.E. Asian inbound tour ● Kingdom of Wonder branding marketing, capital, capacity- operators. building. ● Monthly turnover of Rs. ● 51 initiatives represented 8,000,000. (vendors pay a fee for ● Annual turnover of Rs. ● Profit +50%, employees participation) 1,200,000 +20%. ● Hosts groups that base in ● Received 40% more visitors ● Have hosted 900+ tourists. Sarnath and make day and up to 70% more ● Rated Excellent on excursions to Varanasi donations TripAdvisor for 5 yrs rather than vice versa, ● “Green” guesthouses capitalizing on small-town ● Homestay families become feel. received 50% more guests. self-sufficient in 4 years. . ● In Kerala, 900+ homestays. STDC oversees quality, In Kerala, 900+ homestays. training on design & service, STDC oversees quality, training proactive follow-up, on design & service, proactive 50 follow-up, financing, financing, marketing, and 3 tiers of recognition. marketing, and 3 tiers of recognition. Gap analysis Increase employment opportunities for women and youth by improving access to skills Lack of skills, lack of access to Lack of skills, lack of access to employment, lack of employment, lack of confidence, lack of emotional confidence, lack of support emotional support Empowerment of Adolescent Girls, Liberia High Impact Tourism Training, Benin, Ghana, ● Training for girls on Mali, Mozambique, business, job, and life skills Cambodia, Nepal, Vietnam to reduce youth / female unemployment ● Behavioral changes for ● Training organized around trainers = practical, market girls’ schedules oriented training for ● Participation incentivized beneficiaries through stipends and ● Women trainees increased completion bonus. income by 54% ● Increased employment by ● Youth trainees increased 47% & weekly income 80%. income by 139% ● Graduates show increased ● Low-skilled workers with no 51 formal education increased confidence in professional and personal lives. income by 75% ● The proportion of extreme poor adult male workers Gap analysis 52 Gap analysis Entry Points for Change Changes in the operation of the tourism value chain can benefit the target groups in three ways17: 1. Increased access to the tourism value chain for more people from the target groups (thus creating new entrants) 2. Increased income of existing participants in tourism from the target groups 3. Increased net non-financial benefits to households of the target groups As discussed in the project methodology, these benefits can be achieved by economic value chain upgrading (functional, process, product, chain) and social upgrading. Sanchi has yet to be framed as a destination, which offers a unique opportunity to ensure strong integration of the local community. By focusing on actions towards extending the length of stay of current visitors from a few hours to one night, strong and immediate impact will be felt by the local target groups. The local market could bring local people and tourists together and enhance local economic opportunities through a set of integrated interventions. With very few women involved in the tourism value chain, the destination will benefit from women-owned business models that will appeal to tourists as well as local customers – to ensure a broader client-base. Sarnath is a maturing destination and can benefit from some of the same types of recommendations, but would also benefit from more intensive interventions and deeper opportunities for facilitating connections between locals and tourists to extend tourists’ length of stay. Khajuraho is a destination in rapid decline and the most urgent recommendations have little to do with value chain upgrading. While we present our top recommendations for value chain upgrading and inclusive economic development in Khajuraho below, we also highlight the opportunities most likely to halt visitor decline and to start growing tourism once again. 17 Ashley and Mitchell (2008) Doing the right thing approximately, not the wrong thing precisely: Challenges of monitoring impacts of pro-poor interventions in tourism value chains. Working paper 291, Overseas Development Institute, SNV and IFC 53 Gap analysis 6.1 Actionable Recommendations for Sanchi, Sarnath, and Khajuraho Increase demand by designing unique, local products, skilling artisans, creating new market hubs and experiential activities Proposed Intervention: Sarnath 1. Create Women’s Center Hub for Crafts and Activities Hub for classes on cooking, jewelry, pottery, dance, yoga 2. Training Center in local Proposed government village to supply crafts intervention ● “Made in Sarnath” storytelling Incubation for: Est. Impact tags for locally-produced items. ● Center for production of ●Boutique designer Jobs: +63 Buddhist-Circuit ●Promotion Wages: +6,120,000 merchandise: cotton and silk, ●Expert product designers all sourced locally. / trainers INR/yr ● Well-designed t-shirts for men ●HR trainers and women, vegetable-color ●Equipment dyed and embroidered ● Clay and wooden refrigerator magnets ● Jute/cotton yoga mats ● Youth trained in digital printing 3.Onsite model artisan village Proposed Intervention: Sanchi 1. Upgrade Local Market Proposed govt •Lights & artwork, waste intervention management, attractive signage, Incubation for: fixed prices. ●Refurbishment of market •Free access to clean toilets, ●Toilets, drinking water, Est. Impact water & showers for local MSEs showers Jobs: +28 2. Women-owned and operated ●Equipment and Wages: +2,772,000 handicrafts shop and skills marketing/promotion training center ●Handicrafts shop and INR/yr 3. Safe, quality cycling routes skills training center with mobile app past heritage ●Creation and sites into villages. Improved maintenance of cycling cycling rental options. routes and mobile app 54 Gap analysis Proposed Intervention: Khajuraho 1. Create Women’s Center Hub for Crafts and Activities ●Training Center to supply crafts, Bundelkhandi sweets, pickles, etc. ● “Made in Khajuraho” storytelling tags for locally- produced items. ●Hub for classes on cooking, jewelry, pottery, dance, yoga. Proposed govt 2. Create model artisan village at intervention Shilpgram site with rotating Incubation for: artisans in residence ●Boutique designer representing traditions of ●Promotion different areas of MP ●Expert product designers / trainers 3. Create safe, well-marked and ●HR trainers maintained Lost Gardens bike ●Equipment Est. Impact route with self-guided mobile Jobs: +46 app and spurs to different Develop and implement gardens, building on INTACH’s Wages: +4,164,000 sustainable business new bike route design model for Shilpgram INR/yr artisan village ●Developed and maintained by local, trained youth Develop and maintain bike ●Self-guided mobile app narrates route and mobile app history of places and provides key stops and directions Develop new high-quality, boating center on local ●Demonstrations at key gardens lake on organic farming ●Chance to work the fields ●Buy locally-made organic products 4. Create new high-quality, well- marketed water activities / boating opportunities on local lakes 55 Gap analysis Increase demand by providing more robust opportunities to learn about the destination Proposed Intervention: Sarnath Train 20 local guides (10 local Proposed government Est. Impact young, multilingual touts and 10 intervention young women) on Sarnath ●Gov’t authorizes BHU Jobs: +20 guiding in tie-up with Benares and sponsors tuition and Income: +4,800100 Hindu University Department of costs for Sarnath guide INR/yr Tourism. trainees. Proposed Intervention: Sanchi Train 5+ new local guides (at Proposed gov't Est. Impact least 40% young women) on intervention ● Gov't authorizes IHTM Jobs: +5 Sanchi guiding in tie-up with MP Institute of Hospitality and sponsors tuition and Wages: +1,200,000 Training Management cost for Sanchi guide INR/yr trainees. 56 Gap analysis Increase demand by reducing road chaos and making it easier and more pleasant for FITs to get around, and providing A2F for rickshaw drivers Proposed Intervention: Sarnath Upgrade autorickshaws to fixed price, electric, BC-branded, Hop- Proposed govt on Hop-off mini-buses, hand- intervention painted by local artisans Enable: Upgraded, hand-painted bicycle ● Drivers to purchase Est. Impact rickshaws (new chassis, shocks, vehicles Wages: +2,462,500 etc.) to carry / sell fixed-price ● Artisans to paint BC- INR/yr local crafts and offer fixed-price branded rickshaws excursions to nearby temples, ● Designated work space sites, new artisan village and parking with Drivers wear BC t- facilities shirts/uniforms. Increase demand by creating new, quality, hygienic F&B establishments and models for women-owned businesses Proposed Intervention: Sarnath and Sanchi 57 Gap analysis Develop women-owned and run bakery selling directly to Proposed gov’t consumers, and delivering to intervention Est. Impact hotels, restaurants, etc. Incubation: Jobs: +13 (e.g. through SHGs) ● Training ● Equipment Wages: +1,248,000 INR/yr Develop women-owned and run ● Design cafe with outdoor seating space ● Support through SHGs Increase demand by creating new quality accommodation and local experiences; plus training, financing, and homestay business opportunities for women and families Proposed Intervention: Sarnath, Sanchi, and Khajuraho Proposed govt Create 15 new, quality, in-house intervention homestays in each destination, ● Single, centralized Provide: process for licensing, ● Outreach for families / supporting & women to create quality monitoring homestays Est. Impact / homestays Location ● Alternately partner with ● Training on standards & AirBnB or similar for Businesses: +30 design training Turnover: ● Marketing & financial ● Subsidized scheme for +8,640,000 support creating / refurbishing INR/yr ● Monitoring and follow-up property ● Background checks & ● Partner w/ NRLM: customer feedback channel staffed association to ● Social / Environmental centralize bookings, designations etc. in Sanchi 58 Gap analysis Increase employment opportunities for women and youth by creating access to skills Proposed Intervention: Sanchi, Sarnath, and Khajuraho Proposed govt intervention ● Bring relevant skills training to the Est. Impact Per destination level to Location ensure access for local Enhance access to vocational Jobs: +20 youth skills training for youth ● Collaborate Wages: +1,680,000 with/incentivize private INR/yr sector to host traineeships and provide inclusive, decent job. Proposed Intervention: Khajuraho 1. Provide follow-on skills support, English language instruction, and local hotel placement for local young women and men graduating Proposed govt from PACE intervention •Work with five-star hotels to Skills development and Est. Impact place them and provide follow- language instruction Jobs: +25 on support Linkages with hotels Wages: +2,088,000 Support for creation of INR/yr 2. Train women to produce women’s organic farming paper bags, branded jute bags, NGO toiletries bags, and cow dung- based paper products, and link to hotels 59 Gap analysis 3. Link women farmers horizontally with NGO and link vertically to hotels to sell organic pulses directly without intermediaries (then later, poultry, eggs, milk, goats) Increase employment opportunities for women and youth by motivating gender-friendly work environment Proposed Intervention: Sanchi, Sarnath, and Khajuraho Proposed govt intervention: ● Train owners and managers in higher-end hotels on gender- Est. Impact Per Promote, guide and support friendly management Location gender-friendly business ● Provide incentives for management among tourism Jobs: +20 business owners business (incl. hotels, moving towards restaurants, shops). E.g. family- Wages: +1,680,000 inclusive decent INR/yr friendly work schedule employment ● Initiate transportation for local female staff ● Subsidize local day care facility 6.2 Additional Urgent Recommendations for Khajuraho 1. Air connectivity: a. Introduce a low-cost airline to run the Varanasi-Khajuraho route daily at significantly lower cost than Jet Airways, preferably regulated to under Rs. 5,000 one-way. b. Re-introduce daily non-stop air route from Agra, and introduce routes from Delhi, Mumbai, Kolkata, and Lucknow. 2. Train connectivity: a. Add a larger, second daily train on the Delhi-Khajuraho route with more sleepers/upper- class seats. b. Add more frequent trains from Bhopal, Orchha, and Varanasi, as well as from the south to handle logistics of bringing supplies to Khajuraho 60 Gap analysis 3. Road connectivity: a. Improve roads from Agra, Orchha, Bhopal, Varanasi, and elsewhere 4. Add street lighting throughout central Khajuraho--currently, no roads are adequately lit after dark. 5. Add public waste bins per modern standards--currently, there are none. 6. Add female police officers / female tourist police officers 6.3 A Road Map for the Buddhist Circuit and Beyond Our recommended road map for the Buddhist Circuit destinations as well as Khajuraho can be understood by mapping each high-priority recommendation against the estimated time it may take to implement and the potential economic impact. Figure 15: Roadmap for Sarnath 61 Gap analysis Figure 16: Roadmap for Sanchi Figure 17: Roadmap for Khajuraho 62 Gap analysis 63 Gap analysis 6.4 Potential Collaborators Emerging360 has researched and met with a number of high-value potential collaborators who could potentially bring expertise, capacity-building, business models, and networks to help implement particular recommended interventions. 6.5 Key Potential Catalysts In each destination, we’ve also identified potential catalysts who we believe could potentially play an important role in helping to coordinate, drive, or assist with some of the recommendations above. Destination: Sarnath Name: Neiha Gupta, Advocate 64 Gap analysis Contact Info: n.gupta014@gmail.com Potential application: A dynamic, high-powered, young, woman entrepreneur with 2 acres of prime land in the heart of Sarnath and a shared vision, she has already begun to create space for a retail shop of textiles locally made by women in Sarai Mohana village, a café, artisan village, meditation, yoga, and other activities. She and her property would be an ideal match for the Women’s Retail Center Hub concept and she is eager to collaborate. She will benefit from linkages with and support from high-end product designers, boutique designers, skills development trainers, and marketers. Destination: Khajuraho Name: Narayan Singh Bhayal Contact Info: +91 96850 09999 Potential application: Narayan Singh is the ex-GM of the Taj Chandela and is recognized as the grandfather of the Khajuraho-area hospitality sector. While he is about to start a 3-year stint as the GM of the new Bundela Hotel, his true passion is the organic farming training center that he’s hoping to start up with a particular focus on local-area women farmers. He’s keen to collaborate with our initiatives to train and vertically link women farmers to Khajuraho hotels. He’s also closely connected with Ritu Singh of INTACH, who is pioneering a number of sustainable farming- related initiatives in the area, including the Lost Gardens projects and design of a new bike path. Destination: Khajuraho Name: Dr. Ritu Singh, Director, Programmes, Natural Heritage Division, INTACH Contact Info: +91 96850 09999 Potential application: 65 Gap analysis Based at INTACH in Delhi, Ritu manages INTACH’s work in Khajuraho, where she is pioneering a number of sustainable farming-related initiatives in the area with Narayan Singh and others, including the Lost Gardens projects, and is championing design of a new bike path. Destination: Khajuraho Name: Mukesh Rajak Contact Info: mukesh.rajak@prathamhotels.com +91 96301 75757 Potential application: The current head of the PACE hospitality training center and hotel (and former employee of Narayan Singh Bhayal’s at the Taj), Mukesh has been instrumental in coordinating for us across town, and he is eager to help build PACE’s role within the BC inclusive jobs focus. Destination: Khajuraho Name: Vio Meena Soni Contact Info: violettoulli@gmail.com (+91) 7566728634 Potential application: Originally from France, Vio is fluent in Hindi, married to a local, and owns/manages a high- quality local homestay, as well as the “Friends in Khajuraho” Association (http://www.friends- in-khajuraho.org), which provides an English-language school and coordinates various craft production activities with local women, including an initiative to produce cloth bags for shops to replace plastic. She is well-known, well-connected, has a global perspective, and is keen to help reshape Khajuraho in a more inclusive way particularly through craft production for local women. She could be a strong catalyst for the Women’s Retail Center Hub and Training Center in Khajuraho. Destination: Sanchi 66 Gap analysis Name: Madhur Anand Contact Info: madhuranand@live.in Potential application: Madhur is a young entrepreneur who has created SEHATVAN (www.sehatvan.in), an innovative experiential nature lodge located between Sanchi and Bhopal that focuses on eco- living, particularly for Indian tourists. He is dedicated to inclusive jobs creation and has a strong understanding of the promise of homestays, as well as a global perspective, and could be instrumental in helping to coordinate a number of interventions in Sanchi. 6.6 Next steps This research study has resulted in the enumeration of a series of important actionable recommendations with the potential to make a significant difference in creating jobs and increasing revenue for local communities, while igniting inclusive economic growth. Many of these recommendations could have additional positive secondary and tertiary multiplier effects as well. We have also identified key potential individual catalysts in each destination as well as a range of promising potential collaborators who could provide important forms of expertise and implementation support. We believe that well-conceived public-private partnerships (PPPs) may be the most promising route for advancing many of the recommendations. Next steps for ensuring successful implementation of the recommended interventions are as follows: 1) Now that this research study is complete with recommendations enumerated, World Bank and other stakeholders to select and prioritize which recommended interventions should be thoroughly elaborated in a subsequent detailed project design phase. The Bank and stakeholders should also specify preferences for potential collaborators, catalysts, and other integration points. 2) Next, one or more consultants should conduct a well-planned and executed Project Design Phase to elaborate detailed plans for each recommendation that the Bank designates for potential implementation. We estimate that the project design phase would likely span a period of 12-16 weeks. For each selected recommendation, the project design phase should include the following activities: a) Convene follow-on meetings with key stakeholders (public, social, and private sector) to determine the best and preferred detailed approaches to project oversight, project management, resourcing, implementation, budgeting/cost-sharing, etc. b) Solicit project proposals from selected potential collaborators / experts, including proposed budgets, timelines, etc. c) Solicit project proposals from selected potential catalysts, including proposed budgets, timelines, etc. 67 Gap analysis d) Elaborate sustainable, revenue-generating business models where applicable for selected recommendations, including incorporation of additional market research learnings for demand forecasting e) Based on the above inputs, develop detailed project design documents, including: business models; project oversight, project management, and implementation details; resourcing and expertise sourcing; costing, budgeting, and cost-sharing components; timelines; etc. f) Validate the detailed project design plans for each intervention with women, youth, and men in the local communities g) Re-convene with key stakeholders to agree on and finalize detailed project designs and next steps. 3) Next, implement the detailed project designs for selected interventions in coordination with key stakeholders, collaborators, and catalysts and in collaboration with local communities. Strong, on-the-ground project management in each destination will be crucial to effective implementation. We believe that a full-time, skilled project manager would be needed on the ground in each destination to implement multiple, multi-stakeholder recommendations successfully. We have provided high-level estimates for project implementation periods for each destination in the Roadmap figures above. 4) Lastly, these recommendations cannot simply be implemented and then forgotten. It will take time to cultivate the new enterprises and actors, and providing ongoing, post-implementation support, follow-up, and monitoring over a period of several years will be essential for success. 68 Gap analysis Appendix A. Schemes and Programs Consulted Scheme: Prime Minister's Employment Generation Programme (PMEGP) Assistance: Financial assistance for establishment of micro-enterprises in rural and urban areas Support INR 25 lakhs for manufacturing projects & INR 10 lakhs for service sector projects provision: Potential SANCHI, SARNATH - In rural villages of Sanchi, assist women/youth to application: establish/upgrade micro enterprises on hospitality/service sector. KHAJURAHO - Aid in establishing microenterprises like craft making center, laundry facility, tourist shop (to sell locally made crafts, food products, souvenirs, etc.) Scheme: ASPIRE (Promotion of innovation, Rural Industry and Entrepreneurship) Assistance: Setting up incubation center, enterprise building, financial support, start up promotion, etc. Support provision: Potential SANCHI, SARNATH-KHAJURAHO - Setting up incubation cum enterprise building application: unit where various tourism & hospitality related micro enterprises can incubate and avail required support (technical, financial & marketing) during the initial 2-3 years. SANCHI: Enable youth to start agro-based enterprises, including dairy farming, vegetable farming, floriculture, etc. Scheme: Micro & Small Enterprises-Cluster Development Programme Assistance: Support for Soft intervention (diagnostic studies, DPR, capacity building, etc.) Hard interventions (creation of Common Facility Centre (CFC), infrastructure and facilities). Support ● Mostly in the form of GoI grants provision: ○ INR 2.50 lakh for diagnostic study ○ INR 5.00 lakh for DPR ○ CFC - 70-90% grant on INR 15.00 crore(max limit) project cost Infrastructure - 60-80% of project cost INR 10.00 crore (max limit) Potential SANCHI - For upgrading local market application: SARNATH - Cluster development of pottery makers of Sultanpur village 69 Gap analysis Scheme: Credit Enhancement Guarantee Scheme for the Scheduled Castes Assistance: Credit guarantee assistance Support Maximum credit cover of INR 5.00 crore provision: Potential SANCHI: Women SHGs in the region can access loans to set up enterprises application: focused on candle-making, paper products, jewelry production, etc. Scheme: Entrepreneurial Schemes for Backward Classes Assistance: Loans, technical upgrading, microfinance, vendors, etc. Support Term Loan/Microfinance provision: ● New Swarnima for women - Loan up to INR 1.00 lakh (5% interest rate) ● Saksham - Loan up to INR 10.00 lakh (6-8% interest rate) ● Shilp Sampada (for craftsmen) up to INR 10.00 lakh (6-8% interest rate) ● Mahila Samriddhi - Women individual loan up to INR 50000 ● Krishi Sampada - Farmer Individual loan up to INR 50000 Potential SANCHI and SARNATH: Support to individuals and groups belonging to SC category application: to start restaurants, bakeries, toiletries production, souvenir making, craft making, cafeterias, vegetable growers, etc. Scheme: Schemes for Handloom & Handicraft Segments Assistance: Loans, product development, technical assistance, creation of infrastructure, promotion and marketing, etc. Design & development support, direct benefits, infrastructure support, marketing support, etc. Support provision: Potential SARNATH: Support to selected weavers for product development & marketing application: SARNATH: Support to build capacity of stone sculpture artisans, pottery village of Sultanpur Scheme: National Rural Livelihoods Mission (AAJEEVIKA) 70 Gap analysis Assistance: Entrepreneurship enhancement scheme especially for poor women- Assistance for skills, funds, etc. Support Assistance through SHG network. Financial Assistance provision: ● Revolving Fund (INR 10000 - 15000 per SHG), ● Vulnerability Reduction Fund Community Investment Support Fund (INR 3000 per SHG member) Potential SANCHI and KHAJURAHO: Organize SHG’s which can specialize on application: ● Making tourism friendly products - packaged food items (local snacks, jam, pickle, papad, etc.), bakery, textile products, toiletries, etc. ● Offering tourism /hospitality services- Cafeteria, making products out of waste materials, catering service, guiding, etc. Scheme: Mukhyamantri Yuva Udyami Yojana (MMYUY), Govt of MP Assistance: Entrepreneurship development scheme for youth- Loan, lesser interest & margin money Support Talented youth may get loan amount of INR 10 lakhs to 1 Crore provision: Potential SANCHI & KHAJURAHO: Support for creative self-employed enterprises involved in application: organizing creative tours, manufacturing souvenirs, cultural shows etc. Scheme: Uttar Pradesh Skill Development Mission Assistance: Aligning skills for empowerment and training the youth for secure, sustainable employment and entrepreneurship. Support Through private training partners to conduct short term modular skill development provision: programs with placement. Potential SARNATH: To instill or improve youth skills, enhance access to vocational skill training application: in specific areas like Garment making, Art jewelry designing, Beauty culture, fashion designing, handicrafts, tourism & hospitality, etc. Scheme: Hunar Se Rozgar Tak capacity building program by Ministry of Tourism 71 Gap analysis Assistance: Professional training to youth to take up jobs as Heritage Tour Guides/Tour Guides by IITTM. Training as per the standards set by Tourism & Hospitality Skill Council. Support Training with stipend and free lodging & boarding. provision: Potential SANCHI, KHAJURAHO & SARNATH: Capacity building to local youth (both male & application: female) to become certified Heritage Tour Guide & Tour Guide. Scheme: Entrepreneurship Development Scheme under Ministry of Skill Development & Entrepreneurship Assistance: Support to young entrepreneurship among marginalized groups, women, etc; Setting up Incubation Center/ Entrepreneurship Hubs (E-Hubs). Support Support for capacity building, peer assistance, Incubation centers, etc. provision: Potential SANCHI, KHAJURAHO & SARNATH: Support to set up Entrepreneurship hubs for application: women and youth, where various crafts, and other sellable items (sweets, crafts, pickles, etc.). B. Government of India Budgetary Allocation (2017-18) Under Relevant Support Schemes ALLOCATION SPONSORING SCHEME (approx. INR AGENCY in crores) PRIME MINISTER'S EMPLOYMENT GENERATION PROGRAMME Govt of India 4026.49 (PMEGP) A SCHEME FOR PROMOTION OF INNOVATION, Govt of India 250 ENTREPRENEURSHIP AND AGRO INDUSTRY (ASPIRE) PRADHAN MANTRI KAUSHAL VIKAS YOJANA Govt of India 2924.26 EMPLOYMENT GENERATION PROGRAMS UNDER MINISTRY Govt of India 1164.90 OF LABOR SCHEMES FOR VULNERABLE GROUPS (UNDER DIFFERENT Govt of India 11579.99 SCHEMES) SCHEMES FOR SCHEDULED CASTE AND SCHEDULED TRIBES Govt of India 8509.04 NATIONAL LIVELIHOOD MISSION - AAJEEVIKA Govt of India 4849 TOTAL 33,302.78 crores 72 Gap analysis C. Sample Storytelling Tags 73