In Kerala beaches and waterfalls are emerging as major tourist attractions. Statistics reveal that eco-tourism is now a popular option. Newer areas are also now emerging as tourist destinations and the government is now able to earn much in foreign exchange. The travel account, however, indicates as to how much foreign exchange could be earned on the travel account. It does not indicate the outflow (also known as ‘leakage in Keynesian economics) of foreign exchange, on account of attempts made to attract the tourists.

The balance of payments on travel account and on the total current account for India from 1951-52 to 1981-82 is rather phenomenal. Kerala state was a major contributor to the national income mainly due to its earnings from the travel and tourism trade. The credit side of the travel account (or the receipts from the foreign tourist in India) registered a rise from just 9 crore rupees in 1951-52 to more than 1063 crore rupees in 1980-81. Recent statistics show that the current annual earnings from tourism have more than tripled.

Thus, in the process of economic change that India is undergoing in now particularly after the liberalization of the Indian economy, international trade especially in invisible items, is assuming greater importance than ever before. Given the chronic gap in our balance of payments arising out of developmental expenditure, one of the easiest methods suggested to close this gap is to promote a rapid growth in the tourism industry. The obvious reason for this suggestion is that unlike other industries, tourism development does not entail much technological sophistication.

The tourism industry in India and particularly in a state like Kerala needs to grow more in quality and in quantity to generate more income. Even though states like Kerala and the metro cities could attract more international tourists, the present income from tourism is nothing when compared to that earned by the tourism industry in the developed world. Recent statistics showed that in the previous decade, nearly a quarter million tourists visited Kerala in a particular year. Compare that with the city of Paris that attracted an average of more than 6 million foreign tourists in a year. Promotional activities must be given more importance to attract more people.