By IANS
New Delhi : The Indian government Tuesday announced enhanced subsidies ranging from Rs.200,000 to Rs.10 million per room for creating additional accommodation in different categories of hotels.
Under this, the incentive to one-star hotels will be Rs.200,000 per new room subject to a maximum of Rs.3 million, an official release said.
The incentive to two-star hotels will be Rs.300,000 per room subject to a maximum of Rs.7.5 million.
The incentive to three-star hotels and basic heritage categories will be Rs.300,000 per room with a maximum of Rs.10 million.
The incentive scheme is already operational and will also be applicable to hotels in the metros, the release said.
Interest subsidy has been paid to hotels for the last two decades to encourage and stimulate the growth of accommodation.
The interest subsidy is paid at three percent of the interest paid by the hotel on a loan taken from designated financial institutions. The subsidy was higher at five percent for identified tourist circuits and destinations.
A new scheme of capital subsidy to one, two and three star and heritage category hotels was introduced during the 10th Five-Year Plan period (2002-07).
Under this, subsidy was given at 10 percent of the loan taken subject to a maximum of Rs.2.5 million for one star, Rs.5 million for two star and Rs.7.5 million for three-star and heritage categories of hotels.
“To make the scheme more investor friendly, under the direction of Minister of Tourism and Culture Ambika Soni a fresh scheme with the focus on the rooms created has been prepared which will be offered to the entrepreneurs,” the release said.
The new subsidy has no relation to the loan taken or interest paid, as was the case in earlier schemes.
“This makes it more entrepreneur friendly as it envisages payment of subsidy directly to a hotel without going through a bank or financial institution, thus reducing paper work,” it added.