CSR funds can breathe new life into Indian tourism

When the programme was first launched, it met with its fair share of controversy. And, while the programme has subsequently been successful in enabling the upkeep of our monuments, it has not been able to leverage CSR funding to create a vibrant tourist ecosystem.

CSR spending in India has more than doubled in the last decade. CSR spending specifically on the conservation of heritage sites went from ₹175 crore in FY19 to ₹362 crore in FY22, a year-on-year increase of 27%. This is still less than 3% of the total CSR spending leaving the bulk of funds untapped for tourism development. If planned better, “Adopt a Heritage 2.0″ can leverage these funds to create thriving tourist ecosystems across India, and those ecosystems are sorely needed.

It is no secret that the tourism potential of India is untapped, capturing less than 2% of the global tourism market. While we have been slowly building new attractions, our existing heritage sites are underutilised. Whether the forts of the Western Ghats or micro attractions like Char Minar, these sites hold true international appeal. However, due to insufficient prioritisation, we have been unable to leverage our heritage sites and transform them into global attractions.

Heritage Conservation efforts under Adopt a Heritage were supposed to have dual benefits. Firstly, they were supposed to help share the financial burden of heritage conservation. But more importantly, they were supposed to be catalysts for developing a tourism-focused economy. However, while CSR has done its part, it is critical to realize that tourism does not happen in a vacuum and the government needs to provide an enabling regulatory and governance ecosystem to catalyse tourism-related investment.

The first edition of the “Adopt a Heritage” scheme aimed to focus on the development, upgradation, and maintenance of amenities and facilities. However, it completely neglected other elements required for a thriving tourism industry. This limited approach can work where monuments are in existing tourist hubs but will not work where there is no supporting ecosystem.

Take for example the Lal Qila (Red Fort). The Dalmia Bharat Group transformed this once underserved national treasure by utilising their CSR funds. The result is that we now have best-in-class infrastructure and amenities at the Red Fort, paired with a world-class light and sound show. Given that the monument is part of the NCR region, it benefits from the existing infrastructure of the city. But heritage sites such as Ajanta Caves in interior Maharashtra need a more comprehensive approach.

One way to achieve this is by creating Destination Management Organizations (DMOs) that can adopt a holistic approach, looking at all aspects of local economic activity. Given the crosscutting mandate of destination development, the DMO should be headed by the administrative head of the district. It should have representation from key departments, CSR funders, and sectoral experts. Most importantly the DMOs must have a clear mandate for tourism development and be empowered to grant approvals.

For example, consider any fort in the Western Ghats that falls in an eco-sensitive region. Here any development presents its own set of unique challenges. In such situations, the DMO should be able to grant approvals needed at the state level. And for any central government approvals, it should actively support investors to obtain them within reasonable timelines.

As “Adopt a Heritage 2.0” builds on the success of the previous scheme, it needs to be supplemented with an enabling governance and regulatory ecosystem. Without doing this, we risk spending CSR funds without realizing the corresponding leveraged social benefits.

Ronak Pol is a Team Lead at the Foundation for Economic Development (FED) where he collaborates closely with governments to identify and implement strategic reforms