Newstrack

MoT urges states to set up budget hotels through PPP

EH Staff - Kolkata

The Union Ministry of Tourism is urging state governments to set up budget hotels in their respective states through the public-private-partnership (PPP) route to solve the problem of shortage of budget hotel rooms in the country. Sultan Ahmed, Union minister of state for tourism said in Kolkata, "We are urging states, especially those in the North East, to set-up budget hotels through the PPP route. In such ventures, the state governments will offer land, while the private partners will pump in the money. Priority will be given to backward states with potential of being tourism destinations."

Ahmed, who was speaking on the sidelines of a business summit organised by the Indian Chamber of Commerce, said that the Union MoT had already chalked out a policy, which included special incentives and tax sops to the private players. Though he declined to elaborate on the scheme, he said that the implementation would be worked out on a case-by-case basis subsequent to receipt of proposals from the respective states. The minister added that, presently, there was a shortage of about 1.5 lakh rooms in the country and states with tourist spots need to partner with private firms to create adequate infrastructure for tourists.

Incidentally, the MoT has a scheme of assistance for large revenue generating projects, under which PPP projects are eligible for assistance. Under this scheme, subsidy can be provided up to Rs 50 crore, subject to a maximum of 25 per cent of the total project cost or 50 per cent of equity contribution of the promoters, whichever is lower.

Earlier, the minister had said tourism is likely to be accorded the status of an industry in the forthcoming budget. The Union finance ministry is examining the proposal, Ahmed added.