Newstrack

Tourism ministry announces revised scheme of incentives

EH Staff - Mumbai

In order to encourage and stimulate the budget segment, the ministry of tourism has announced a revised scheme of incentives. The focus of the scheme is creating additional room capacity; hence the subsidy is on the basis of rooms created. The scheme is valid all over the country and includes hotel projects in the metro cities also, as the shortage of hotel rooms is more acute in such cities. In the earlier scheme, hotels in metro cities were not eligible. Also, the maximum amount to be claimed as subsidy has been enhanced in view of the increase in the cost of hotel projects. Additionally, the subsidy has no relation to the loan taken or interest paid as was in the earlier schemes, making it more entrepreneur friendly, reducing paperwork.

The following revised incentives are offered:

• The incentive to a one -star hotel will be Rs 2 lakh per room subject to a maximum of Rs 30 lakh.
• The incentive to a two -star hotel will be Rs 3 lakh per room subject to a maximum of Rs 75 lakh and
• The incentive to a three- star hotel and Heritage basic category will be Rs 3 lakh per room, subject to a maximum of Rs 100 lakh.

Previously, the interest subsidy paid by hotels on loans taken from designated financial Institutions was 3 per cent of the interest paid by them, the subsidy was higher at 5 per cent for identified tourist circuits and destinations. During the tenth year plan, a new scheme in the form of capital subsidy to one, two, three star and Heritage category (heritage hotels are those built in buildings constructed prior to 1950) of hotels had been administered. Under this scheme subsidy was given at 10 per cent of the loan taken subject to a maximum of Rs 25 lakh for one-star, Rs 50 lakh for a two-star and Rs 75 lakh for three-star and Heritage category of hotels.