Special Correspondent

Need for 20,000 more hotel rooms

  • A great incentive, say hotel operators
  • Move would encourage entrepreneurs, real estate owners

    NEW DELHI: Recognising the need for 20,000 more hotel rooms for the Commonwealth Games to be held here in 2010, Union Finance Minister P. Chidambaram on Wednesday proposed a five-year holiday from income tax for new star hotels and convention centres with a seating capacity of not less than 3,000 persons.

    Presenting the budget for 2007-08, Mr. Chidambaram said the work on the new two, three or four-star hotels as well as the convention centres should be completed and begin operations in Delhi or in the adjacent districts of Faridabad, Gurgaon, Ghaziabad or Gautam Budh Nagar between April 2007 and March 31, 2010.

    Noting that India bid for and won for Delhi the Commonwealth Games 2010, Mr. Chidambaram recalled that the country had successfully hosted the 1982 Asian Games.

    He said: ``We owe it to our people to make the Commonwealth Games an equally memorable event. I propose to provide in 2007-08, Rs. 150 crore to the Ministry of Youth Affairs and Sports and Rs. 350 crore to the Delhi Government for the Games. Similarly, I propose to provide Rs. 50 crore for the Commonwealth Youth Games 2008 to be held in Pune.''

    Mr. Chidambaram also proposed to increase the provision for tourist infrastructure from Rs. 423 crore to Rs. 520 crore. The provision relates to the expenditure on creation of infrastructure for construction of budget hotels, tourist complexes, wayside amenities, tourist reception centres, refurbishment of monuments, special tourism projects, and improvement of surroundings and signages.

    The proposal for the tax holiday evoked a positive reaction from the hotel operators who described it as a ``great incentive for developers to expedite setting up of economy and first class hotels.''

    K. B. Kachru, Executive Vice-President, Carlson Hospitality Asia-Pacific and Vilas Pawar, CEO of Choice Hotels India, said the move would encourage entrepreneurs and real estate owners.