Tourism min looks to cover FEE lag

NEW DELHI: In order to bring more accuracy in estimating the foreign exchange earning (FEE) from tourism industry, the government has moved to a new methodology based on consumer price index (CPI). This is expected to reduce the wide variation between the tourism ministry’s early estimate of foreign exchange flow and the Reserve Bank of India’s data which comes with a time lag of three months.

The ministry from now on will adopt Consumer Price Index-Urban Non-Manual Employees(CPI-UNME) as index of earning, instead of the existing Wholesale Price Index (WPI) as measure of earnings, in conformity with the RBI practice.

While WPI is essentially used for commodities and not services, CPI-UNME takes into account the heads such transport and communications, housing, and recreation and amusement pertaining to the tourism sector, tourism secretary S Banarjee said.

"The items covered under these categories may not correspond exactly with the services consumed by tourists, it is certainly a better index vis-a-vis the WPI for inflating the ratio of foreign exchanges earned per tourist," Mr Banarjee added.

Accordingly, the ministry said its actual earning this year till November stood at $9.16 billion instead of $6.32 billion as projected earlier. The revised figures for 2006 will be $8.93 billion in place of $6.57 billion.