Prospective investors in tourism projects are beaming as the word is out that the new tourism policy framed by the State government is investor-friendly with a generous dose of incentives proposed to be doled out to those willing to set up projects.
Among many other advantages, the new policy envisages enabling a conducive environment for setting up and operating tourism infrastructure projects and services, incentives to encourage and promote private investments, ‘industry’ status for tourism Infrastructure projects for specified purposes, comprehensive skill development and capacity building and marketing and branding of the Sunrise State as a globally recognised tourist destination and facilitating investments through a dedicated Investment Promotion team. A plea to accord ‘industry’ status to the tourism sector has been pending for a long time. The new tourism policy scheduled to be released on June 16 had to be postponed in the wake of the MLC election code.
“Industry status to tourism sector is a positive move which is bound to provide the much-needed boost to the sector. Besides, reduction of land lease amount from 5 per cent to 2 per cent and reimbursement of VAT and luxury taxes is a step in the right direction,” says Muthavarapu Murali Krishna, president-elect, Andhra Pradesh Chamber of Commerce and Industry.
The final draft policy says tourism officials at the helm will work with the Centre to facilitate inclusion of Tourism Infrastructure projects to be eligible for availing loans on a par with industries. Special incentives like ‘accelerated depreciation’ which the Centre may provide to the new industries in Andhra Pradesh once the State gets ‘Special Status’, would be made available to new tourism infrastructure projects as well.
The policy envisages that a majority of new projects will be driven by private sector investment. A relatively smaller proportion of projects will be through Public-Private Partnership (PPP) and direct government investment.
“The new policy has all the ingredients to propel the State into top position. The beauty of it is that all stakeholders have been taken into confidence,” says K. Pattabhiram, Advisor to Hotels’ Association.
The Tourism Department also proposes to create a dedicated land bank and regularly update it for undertaking projects on PPP basis. The policy of land allotment on long lease for eligible Tourism Infrastructure Projects will be continued. The lease tenure can be up to a maximum period of 33 years at the first instance, unless specified otherwise for mega projects.
In the case of select projects undertaken by the government through a designated agency, the incentives and support would be based on internal government decisions on a case-to-case basis. All projects with investments above Rs. 200 crore, irrespective of their location, will be treated as mega projects and additional incentives and concessions may be granted.
The final draft policy says tourism officials will work with the Centre to facilitate inclusion of Tourism Infrastructure projects to be eligible for availing loans
