NEW DELHI, SEPT 15
The Tourism Ministry has brought two reliefs to the credit-starved hotel industry, first the external commercial borrowings (ECB) permitted up to US$ 100 million in the current financial year and now the Reserve Bank (RBI) removing hotels from the classification as commercial real estate.
The twin moves will make larger credit available to the capital-intensive hospitality industry at lower rates of interest, thus bringing down the high cost of the hotel projects.
The ministry sources said it would continue to pursue further with RBI to accord infrastructure state to hotel projects as that will further dip the interest rate to single digit.
They said yet another proposal of the ministry pending with RBI is to provide fiscal amenities for creation of additional hotel room capacity to meet the surge in demand in the tourism sector.
The ministry has been canvassing that the hotel segment of the tourism industry is highly capital-intensive in nature and has a long gestation period and India is already facing shortage of good quality accommodation for both the international as well as domestic tourists.
With the delinking of hotels from commercial real estates, the promoters will be able to seek capital loans from banks and ease out the liquidity issues particularly to the new hotel projects, the sources added.
