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Backgrounder
With the increase in tourist arrivals in the country, demand for hotel rooms specially budget hotel rooms is increasing. During the year 2003, a growth of 14.3% was registered in tourist arrivals. It further increased by 23.5% in 2004. The domestic tourism, which was about 308 million during the year 2003, registered increase of about 14% during 2004. Keeping in view the increasing trends in the coming years, the requirement of accommodation in budget category of hotels during the next five years is estimated at about one lakh hotel rooms.
Ministry of Tourism has requested all State Governments/UTs to allot maximum number of plots in their States for construction of hotels, especially budget hotels in all star categories. As land is a State Subject, the State Governments have to take initiatives to provide suitable plots with necessary incentives for setting up budget hotels in the country, specially, at the entry points at tourist centers. They have also been advised to sell the plots or offer them on long-term lease basis at reasonable prices with higher level of commercial utilization along with the higher FAR/FSI.
A proposal has been mooted for establishment of 100 hotels of 100 capacity each at specific railway stations, which are located at tourist centers for providing clean and inexpensive accommodation for the budget tourists. Construction of 100 hotels of 100 capacity each over a period of 3 years would add 10,000 rooms and would help significantly to reduce the gap between supply and demand for hotel rooms. Detailed technical and financial assessment for establishing budget hotels at Secunderabad, Bangalore, Madurai, Chandigarh, Bhopal and Seeldah (Kolkatta) has already been completed by Railways. This issue has been discussed in different forum including in the meeting of Group of Ministers on Tourism.
With a view to streamlining the scheme for grant of subsidy to budget category hotels, Ministry of Tourism, government of India has introduced a scheme ‘incentive to accommodation infrastructure’. Under this scheme ‘capital subsidy is granted to new approved hotel project in 1-star to 3-star and Heritage Basic categories in the country except the 4 metropolitan cities, Delhi, Mumbai, Kolkata and Chennai. The incentive is in the form of capital grant of 10% of the total principal loan taken from designated financial institutions or upto Rs. 25 lakh to 1-star, Rs. 50 lakh to 2-star, Rs. 75 lakh to 3-star and the Heritage Basic category project, whichever is less.
NCJ/DT
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