India earns more than estimated from overseas tourists
Saturday, 29 December 2007, 01:41 IST
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New Delhi: Even as India's earning through overseas visitors has been growing at an impressive rate, the tourism ministry Wednesday said the country could be underestimating such proceeds to the extent of 36 percent. "The basic anomaly is because of the methodology adopted by the Reserve Bank of India (RBI) in calculating foreign exchange earnings from overseas visitors," Tourism Secretary S. Banerjee said. "We have evaluated the methodology and have now decided to calculate such earnings using a new formula. Clearly, our earnings are far more than we have been reporting in the past," he said. One of the main reasons for the anomaly has been the use of wholesale price index for calculating the inflation rate to arrive at the real exchange rate. "It is the consumer price index which includes certain services like transport, communications, recreation, amusement and housing, which is more relevant and a better index for arriving at the foreign exchange earning ratio," Banerjee added. The new estimate of foreign exchange earnings is $7.49 billion and $8.93 billion in 2005-06 and 2006-07 respectively against $5.73 billion and $6.57 billion based on the previous methodology. For 2007, the estimate till November is $9.16 billion in place of $6.32 billion. "The adoption of new methodology will reduce the variation in the tourism ministry's advance estimate and the RBI figures to the extent of five percent, in place of the existing divergence of 30-40 percent," Banerjee said.
Source: IANS
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